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EQUITY
Bourses stage sharp recovery; Sensex garners 175 points
Dec-04-2019

Indian equity benchmarks staged sharp recovery to end Wednesday’s trading session in green terrain. After a negative start, indices altered between green and red terrain, amid 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%. In noon deals, losses got extended, even though India’s services sector activity returned to growth in the month of November. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index bounced back to 52.7 in November from 49.2 in October. 

However, indices managed to come back in green terrain in the last hour of the trade. Sentiments got relief, after 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. Adding more comfort, India ranked 73rd out of 152 countries in the United Nations Conference on Trade and Development’s Business-to-Consumer (B2C) E-commerce Index 2019 that measures an economy’s preparedness to support online shopping, moving seven places up in the list.

On the global front, European markets were trading in green terrain, as Russia's service sector expanded for the fifth consecutive month in November. The survey data from IHS Markit showed that the services Purchasing Managers' Index stood at 55.6 in November from 55.8 in October. Asian markets ended in red terrain, after Hong Kong's private sector continued to contract in November, with a 16-year low PMI score of 38.5. That's down from 39.3 in October and it moves further beneath the boom-or-bust line that separates expansion from contraction.

Back home, infra sector stocks remained in watch, after Union Minister Rao Inderjit Singh said that as many as 355 infrastructure projects are showing cost overrun, with the overall cost overrun being Rs 3.88 lakh crore. Further, banking stocks also remained in focus, amid reports that public sector banks disbursed Rs 2.39 lakh crore to micro, small and medium enterprises, non-banking finance companies, corporates, retail and agriculture sector borrowers in November, raising the total disbursement since the launch of their customer outreach in October to Rs 4.91 lakh crore.

Finally, the BSE Sensex gained 174.84 points or 0.43% to 40,850.29, while the CNX Nifty was up by 49.00 points or 0.41% to 12,043.20.

The BSE Sensex touched high and low of 40,886.87 and 40,475.83, respectively and there were 21 stocks advancing against 10 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.52%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Metal up by 1.61%, Bankex up by 1.40%, IT up by 1.37%, Consumer Durables up by 1.33% and TECK up by 1.30%, while Capital Goods down by 1.33%, Energy down by 1.12%, Oil & Gas down by 0.26%, Industrials down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 7.11%, Yes Bank up by 5.97%, Tata Motors - DVR up by 5.09%, ICICI Bank up by 4.00% and Vedanta up by 3.15%. On the flip side, Larsen & Toubro down by 2.16%, Reliance Industries down by 1.67%, Asian Paints down by 0.95%, Maruti Suzuki down by 0.93% and Bajaj Auto down by 0.56% were the top losers.

Meanwhile, amid states demanding release of pending GST compensation, the GST Council may discuss the revenue position in its upcoming meeting. With an aim to deliberate on a host of issues, including raising cess on some more products to meet the growing need of compensation cess, the meeting of all powerful GST Council is expected to take place in the second half of this month.

The discussion is quite critical as lower GST and compensation cess collections have been a matter of concern in the last few months. The compensation requirements have increased significantly and are unlikely to be met from the compensation cess being collected. The Council has sought suggestions, inputs or proposals as regards measures, on compliance as well as rates which would help in augmenting revenue.

Specific suggestions may please be provided on following review of items currently under exemptions, GST and compensation cess rates on various items, rate calibrations for addressing the inverted duty structure, compliance measures other than those currently under implementation and any other measure to augment revenue. The suggestions made will be placed before the committee for urgent examination.

The CNX Nifty traded in a range of 12,054.70 and 11,935.30. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 7.02%, Yes Bank up by 5.88%, ICICI Bank up by 3.82%, Vedanta up by 3.01% and Hindalco up by 2.60%. 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 down by 1.06% were the top losers.

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
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