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Post Session: Quick Review
Dec-05-2019

Indian benchmark indices ended a highly volatile day on negative note on Thursday, as investors remained jittery after the Reserve Bank of India (RBI) kept the key policy rate unchanged at 5.15% and decided to continue with its accommodative stance to support the economy. Initially, domestic bourses made a positive start and traded on a firm note, as traders took some support with a report that Union Cabinet approved the launch of an exchange-traded fund (ETF) for bonds to create an additional source of funding for Central Public Sector Enterprises (CPSEs) and state-owned financial institutions. Finance Minister Nirmala Sitharaman has said that with the creation and launch of umbrella ETF the government hopes to diversify investor base. Some comfort also came with a private report indicating that India's gross domestic product (GDP) to grow at 5.8 percent for the financial year 2019-20. After that, markets turned choppy and traded marginally in red as traders turned cautious with a report that the RBI sharply lowered the growth forecast for the current financial year to 5 percent from the earlier estimate of 6.1 percent on account weak domestic and external demand.

Selling further crept in the final hour of the trade as traders turned negative with World Bank’s statement that India faces twin threats to its income from global trade which makes up 48 per cent of India’s GDP - rise of protectionism and trade wars and technological change. Market participants also remain on side lines as RBI revised CPI inflation projection upwards to 5.1-4.7% for H2:2019-20 and 4.0-3.8% for H1:2020-21, with risks broadly balanced. The MPC noted that the upsurge in prices of vegetables is likely to continue in immediate months. Also, incipient price pressures seen in other food items such as milk, pulses, and sugar are likely to be sustained, with implications for the trajectory of food inflation.

On the global front, European markets were trading mostly in red, amid mixed signals on US -China ‘phase-one’ trade deal. Meanwhile, Germany's manufacturing new orders declined in October, defying expectations for further increase. Asian markets ended in mostly in green, on signs the United States and China were on track for a preliminary trade deal.

The BSE Sensex ended at 40731.56, down by 118.73 points or 0.29% after trading in a range of 40720.17 and 41002.41. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index slipped 0.35%, while Small cap index was up by 0.01%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.05%, Consumer Durables up by 0.67%, TECK up by 0.64%, Capital Goods up by 0.62% and FMCG was up by 0.24%, while Telecom down by 2.72%, Metal down by 2.55%, PSU down by 1.30%, Basic Materials down by 1.25% and Oil & Gas was down by 1.12% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.75%, Larsen & Toubro up by 1.62%, ITC up by 1.36%, Infosys up by 0.82% and Tech Mahindra was up by 0.47%.  (Provisional)

On the flip side, Bharti Airtel down by 2.84%, Tata Steel down by 2.32%, Tata Motors - DVR down by 1.99%, Tata Motors down by 1.95% and Hero MotoCorp was down by 1.89% were the top losers. (Provisional)

Meanwhile, Fertiliser Minister Sadananda Gowda has said that the government is seriously considering options for decontrolling urea by either fixing a nutrient-based subsidy (NBS) rate or making direct payment of subsidy to farmers' account. In 2010, the government had launched the NBS programme under which a fixed amount of subsidy, decided on an annual basis, is provided on each grade of subsidised phosphatic and potassic (P&K) fertilizers, except for urea, based on the nutrient content present in them.

Gowda further said that the government is actively pursuing the issue of revision of fixed cost under urea policy. He also said that any change in policy should protect the interest of farmers, industry and help conserve resources. He stated that currently, urea is the only controlled fertilizer and is sold at a statutory notified uniform sale price and it is the most commonly used fertiliser because it is highly subsidised. Noting that the government is aware of the challenges faced by the industry, he said, however there are no short cut solutions to the structural problems but the government is working very hard to find possible way out.

The minister further said that as far as fertilizer policies and payments are concerned, the government is in continuous dialogue with all the stakeholders and various wings of the government. However, he said there is a need to keep in mind the government's fiscal limitation in order to balance sometimes the conflicting requirement and meet the expectation of all stakeholders. He also urged the industry to redefine the role of fertilisers industry by introducing newer forms of fertilisers and lauded efforts of cooperative fertiliser firm IFFCO in developing 'Nano fertilisers'.

The CNX Nifty ended at 12007.90, down by 35.30 points or 0.29% after trading in a range of 11998.75 and 12081.20. There were 10 stocks advancing against 40 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 6.13%, TCS up by 2.08%, ITC up by 1.58%, Larsen & Toubro up by 1.25% and Britannia was up by 1.17%. (Provisional)

On the flip side, JSW Steel down by 3.52%, Coal India down by 3.35%, Bharti Airtel down by 2.79%, Tata Steel down by 2.53% and IndusInd Bank was down by 2.30% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 11.80 points or 0.16% to 7,176.70 and Germany’s DAX was down by 17.63 points or 0.13% to 13,122.94. On the other France’s CAC was up by 20.51 points or 0.35% to 5,820.19.

Asian markets ended mostly higher on Thursday after reports showed that US and Chinese negotiators are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase one trade deal. Chinese shares closed higher after US President Donald Trump said trade talks with China were going very well, sounding more positive than, when he said a trade deal might have to wait until after the 2020 US presidential election. Moreover, Japanese shares ended up after Prime Minister Shinzo Abe announced a $120 billion fiscal package to support stalling growth in the world's third-largest economy.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,899.47
21.35
0.74

Hang Seng

26,217.04
154.48
0.59

Jakarta Composite

6,152.12
39.24
0.64

KLSE Composite

1,563.58

2.65

0.17

Nikkei 225

23,300.09
164.86
0.71

Straits Times

3,174.19
14.40
0.46

KOSPI Composite

2,060.74
-8.15
-0.39

Taiwan Weighted

11,594.65
84.18
0.73
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