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Major headlines

·         Banks do not have to deposit enhaced CRR any more

·         Stock markets slump after RBI holds rate, lowers growth forecast

·         India’s central bank keeps key lending rates unchanged

Indian Indices: Indian equity benchmarks which traded in green for most part of the day snapped the session in red on Wednesday. Equity benchmarks fell sharply after RBI kept all policy rates unchanged. The outcome came in as a shocker for the market which was anticipating a cut in the repo rate in the backdrop of easing inflation and rising concerns over a slowdown in the economy. The market made a modestly positive start in early deals on expectation of rate cut and as positive cues from global markets aided sentiment. Some support came with Asian Development Bank’s (ADB’s) report, indicating that the largest economies of Asia - India and China - will help maintain the growth rate of the region at 5.7% in 2016 and 2017. The report also mentioned that India’s growth prospects have got a boost from the acceptance of the 7th pay panel recommendations and likely implementation of the Goods and Services Tax (GST) regime next year. Separately, Fitch Ratings in its latest report titled ‘2017 Outlook: Emerging Asia Sovereigns’ said that there is scope for monetary easing in India as retail inflation is holding below the 5 percent target.

The BSE Sensex ended at 26268.07, down by 124.69 points or 0.47% after trading in a range of 26164.82 and 26540.83. There were 11 stocks advancing against 19 stocks declining on the index. The broader indices ended mixed; the BSE Mid cap index was up by 0.05%, while Small cap index was down by 0.39%. The CNX Nifty ended at 8114.05, down by 29.10 points or 0.36% after trading in a range of 8077.50 and 8190.45. There were 15 stocks advancing against 36 stocks declining on the index.

Market Sentiment:  

The market breadth on BSE was positive in the ratio of 1190: 1397, while 159 scrips remained unchanged.

Crporate Front:

Almost 12 lakh crore demonetised Rs 500 and Rs 1,000 notes have been deposited by the public since the November 8 announcement, R. Gandhi, Deputy Governor, Reserve Bank of India (RBI), said here on Wednesday.

Macroeconomic front:

The Indian rupee were trading higher against the US dollar, albeit pared most of early gains, for the sixth straight session at the Interbank Foreign Exchange on Tuesday amid sustained selling of dollars by banks and exporters, tracking firmness in equity market. At the Interbank Foreign Exchange Market, the local currency was trading up by 5 paise to 67.98 per dollar from a previous close of 68.03 per dollar at 14:00 hours.

On the global front:

On the global front, Asian markets ended mostly in green, while China stocks snapped a three-day streak of losses, helped by a rally in resources shares. A broad rally in commodities, in particular in coke, coking coal, iron ore and rebar, boosted share prices in steelmakers, coal miners and other resources companies. European markets were trading in green as investors look ahead to Thursday’s highly-anticipated European Central Bank (ECB) policy meeting.

Commodity Updates:

Top Sectoral & Stock Screening:   The top gaining sectoral indices on the BSE were Oil & Gas up by 0.82%, Auto up by 0.42% and PSU up by 0.14%, while Bankex down by 1.00%, Realty down by 0.98%, IT down by 0.45%, TECK down by 0.42% and Power down by 0.35% were the losing indices on BSE.

Top Nifty Movers:    The top gainers on Nifty were Eicher Motors up by 3.26%, BPCL up by 2.08%, HDFC up by 1.58%, Adani Ports & SEZ up by 1.29% and Tata Motors up by 0.97%. On the flip side, Sun Pharma down by 6.19%, Bank Of Baroda down by 2.34%, Tech Mahindra down by 2.09%, Axis Bank down by 1.80% and Indusind Bank down by 1.78% were the top losers.  

Global Signals:

Asian markets were trading mostly in green; KOSPI Index rose 2.03 points or 0.1% to 1,991.89, FTSE Bursa Malaysia KLCI increased 2.29 points or 0.14% to 1,632.02, Taiwan Weighted advanced 13.12 points or 0.14% to 9,263.89, Shanghai Composite surged 22.6 points or 0.71% to 3,222.24, Hang Seng jumped 125.77 points or 0.55% to 22,800.92 and Nikkei 225 was up by 136.15 points or 0.74% to 18,496.69, while Jakarta Composite was down by 14.01 points or 0.27% to 5,258.95.

All the European markets were trading in green; France’s CAC gained 44.16 points or 0.95% to 4,676.10, UK’s FTSE 100 increased 60.98 points or 0.9% to 6,840.82 and Germany’s DAX was up by 121.12 points or 1.12% to 10,896.44.