HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Post Session: Quick Review
Dec-04-2019

Oscillating between positive and negative terrain, key equity benchmarks witnessed a relief rally in dying hour of trade which helped to close the session near intraday high levels on Wednesday. Markets rebound from previous day fall, with Sensex and Nifty settling above their crucial 40,800 and 12,000 levels, respectively. Domestic indices made negative start but soon gained traction to turn positive as traders found some support with Economic Affairs Secretary Atanu Chakraborty’s statement that global rating agency S&P has reaffirmed sovereign rating of India with a stable outlook. S&P has reaffirmed sovereign rating of India at ‘BBB-’ with a stable outlook and it said that India's economy continues to achieve impressive long-term growth rates despite a recent deceleration. Some positivism also came with a monthly survey report which showed that Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 52.7 in November from 49.2 in October, above the 50-mark separating contraction from growth on a monthly basis. However, market failed to protect gains and again entered into negative territory as traders turned anxious with a private report that India’s GDP growth estimate to 5.3% from 6% amid a rash of similar actions, especially after the September quarter growth slowed to a 26-quarter low of 4.5%.

However, key indices pared all of their losses and staged smart recovery in the last leg of trade, as investors found some solace with a report that income-tax department has processed refunds worth Rs 1.46 lakh crore till November 28 this fiscal, a growth of nearly 23% compared with the same period a year ago. This involved 2.1 crore refunds compared with 1.75 crore a year ago. Market participants also took note of global credit rating agency Standard & Poor’s report that it has reaffirmed India’s sovereign rating at ‘BBB-’ with stable outlook. Domestic sentiments were buoyed on private report that, it has predicted an 8.5% gains in equity indices next year despite elevated valuations. Meanwhile, Commerce Minister Piyush Goyal said that the FDI inflow into India has increased in the last fiscal in comparison to previous years with $62 billion foreign investments in 2018-19. In 2017-18, the total FDI inflow was $60.97 billion.

On the global front, Asian markets ended in red amid fresh US tariffs on Argentina and Brazil, as well as threatened duties on French goods. However, European markets were trading in green, even as trade worries deepened after US President Donald Trump and Commerce Secretary Wilbur Ross suggested the US-China trade deal might have to wait longer until after the 2020 presidential elections.

The BSE Sensex ended at 40849.93, up by 174.48 points or 0.43% after trading in a range of 40475.83 and 40886.87. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.56%, while Small cap index was up by 0.32%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.58%, Consumer Durables up by 1.56%, BANKEX up by 1.40%, IT up by 1.36% and TECK was up by 1.27%, while Capital Goods down by 1.37%, Energy down by 1.11%, Oil & Gas down by 0.27% and Industrials was down by 0.14% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 6.99%, Yes Bank up by 6.05%, Tata Motors - DVR up by 5.24%, ICICI Bank up by 3.82% and Vedanta was up by 3.33%.  (Provisional)

On the flip side, Larsen & Toubro down by 2.17%, Reliance Industries down by 1.65%, Maruti Suzuki down by 0.98%, Asian Paints down by 0.87% and Power Grid was down by 0.63% were the top losers. (Provisional)

Meanwhile, global rating agency, Fitch Ratings in its latest report has said that Indian banks will require an additional $7 billion (Rs 50,000 crore) equity by FY21 (2020-21) in order to support loan growth, achieve 75 percent non-performing loan (NPL) cover, and build a buffer over the minimum Basel III capital standards. It also said that slowdown in economy could worsen asset-quality tensions for a sector which is already struggling with weak recoveries and ageing provisions.

According to the report, public sector banks (PSBs) need most of this capital as the $10 billion being injected into banks in 2019-20 will go mainly towards bridging regulatory capital gaps, providing for ageing impaired loans, and absorbing the costs of merging 10 state banks into four by April 2020. It noted that the improvement in the impaired-loans ratio in 2018-19 is unlikely to be sustained if stresses on non-banks, real estate and SMEs remain unresolved, due to both tight liquidity and the macroeconomic slowdown.

Rating agency further said that net interest margins (NIMs) are expected to face pressure as floating-rate loans have to be linked to external benchmarks in a bid to ensure effective monetary transmission. It also pointed out that this will cause a further narrowing in state banks' income buffers which have declined in recent years due to poor asset quality and lower growth, leaving both earnings and equity vulnerable to higher-than-expected credit costs. It added that the systemic stress across non-banks would deal a significant setback to recovery in the banking sector, reversing recent improvements in performance, and posing solvency risks to banks with the thinnest buffers.

The CNX Nifty ended at 12037.30, up by 43.10 points or 0.36% after trading in a range of 11935.30 and 12054.70. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 7.11%, Yes Bank up by 5.88%, ICICI Bank up by 3.82%, Vedanta up by 2.93% and Hindalco was up by 2.60%.  (Provisional)

On the flip side, Larsen & Toubro down by 2.26%, Reliance Industries down by 1.55%, Coal India down by 1.51%, Indian Oil Corporation down by 1.13% and Bajaj Finserv was down by 1.06% were the top losers. (Provisional)

European markets were trading in green, UK’s FTSE 100 increased 13.27 points or 0.19% to 7,172.03, France’s CAC increased 67.52 points or 1.18% to 5,794.74 and Germany’s DAX was up by 139.86 points or 1.08% to 13,129.15.

Asian markets ended lower on Wednesday amid prolonged uncertainties from Sino-US trade tensions after US President Donald Trump and Commerce Secretary Wilbur Ross suggested the trade deal might have to wait longer until after the 2020 presidential elections. Further, Japanese shares ended lower as Donald Trump raised fresh doubts on when the trade dispute might end, while exporters were hit hard as the yen held gains against the US dollar. Meanwhile, the services sector in Japan returned to modest growth in November, albeit barely, the latest survey from Jibun Bank showed today with a PMI score of 50.3, up from 49.8 in the previous month.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,878.12
-6.58
-0.23

Hang Seng

26,062.56
-328.74
-1.25

Jakarta Composite

6,112.88
-21.02
-0.34

KLSE Composite

1,560.93

-1.34

-0.09

Nikkei 225

23,135.23
-244.58
-1.05

Straits Times

3,159.79
-13.29
-0.42

KOSPI Composite

2,068.89
-15.18
-0.73

Taiwan Weighted

11,510.47
-21.11
-0.18


  RELATED NEWS >>