Market closes with modest gains

Key benchmark indices closed the session with modest gains amid positive sentiment in Asian bourses and record closing on the Wall Street last week. The barometer index, the S&P BSE Sensex rose 205.49 points or 0.63% at 32,638.18, as per the provisional closing data. The Nifty 50 index advanced 65.65 points or 0.65% at 10,233.10, as per the provisional closing data.

Both the Sensex and the Nifty had hit record high in early trade as positive trade data and encouraging comments from the IMF chief on the outlook for Indian economy cheered investors. Also, market sentiment was buoyant in a truncated trading week ahead of Diwali. Later, indices trimmed gains to trade with small gains only to show recovery from afternoon trade. Key indices staged an impressive intraday recovery in mid-afternoon trade before closing the session with modest gains.

The Sensex advanced 254.63 points or 0.78% at the day's high of 32,687.32 in early trade, its record high. The index rose 12.74 points or 0.03% at the day's low of 32,445.43 in mid-morning trade. The Nifty advanced 75.50 points or 0.74% at the day's high of 10,242.95 in early trade, its record high. The index rose 7.65 points or 0.07% at the day's low of 10,175.10 in mid-morning trade.

Among the secondary indices, the S&P BSE Mid-Cap index provisionally rose 0.52%. The S&P BSE Small-Cap index provisionally advanced 0.32%. Both the indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was negative. On the BSE, 1,406 shares declined and 1,308 shares rose. A total of 130 shares were unchanged.

The total turnover on BSE amounted to Rs 3448.19 crore, lower than turnover of Rs 4246.32 crore registered during the previous trading session.

Telecom stocks gained. Idea Cellular (up 5.39%) and Bharti Infratel (up 4.01%) advanced. Reliance Communications (down 0.29%) edged lower.

Bharti Airtel jumped 5.42% at Rs 455 after the company and Millicom International Cellular S.A. (Millicom), through their respective subsidiaries, announced the closure of the deal to combine their operations in Ghana. Under the joint agreement, Airtel and Millicom will have equal ownership (50:50) and governance rights in the combined entity, which will have revenue of approximately $300 million. The announcement was made during market hours today, 16 October 2017.

Index heavyweight and FMCG major Hindustan Unilever (HUL) was up 2.84% at Rs 1,282. The company announced that Srinivas Phatak, presently, Vice President, Finance Services, Unilever, will succeed P.B. Balaji as Executive Director, Finance & IT and CFO of the company with effect from 1 December 2017. He will join the board of directors of HUL and will be part of the Management Committee of HUL. The announcement was made after market hours on Friday, 13 October 2017.

Federal Bank gained 6.83% at Rs 125.20 after net profit rose 31.03% to Rs 263.70 crore on 14.04% rise in total income to Rs 2666.82 crore in Q2 September 2017 over Q2 September 2016. The result was announced during market hours today, 16 October 2017.

The bank's gross non-performing assets (NPAs) rose to Rs 1948.97 crore as on 30 September 2017 as against Rs 1867.94 crore as on 30 June 2017 and Rs 1819.72 crore as on 30 September 2016. The ratio of gross NPAs to gross advances slipped to 2.39% as on 30 September 2017 as against 2.42% as on 30 June 2017 and 2.78% as on 30 September 2016. The ratio of net NPAs to net advances dropped to 1.32% as on 30 September 2017 as against 1.39% as on 30 June 2017 and 1.61% as on 30 September 2016. The bank's provisions and contingencies rose 4.97% to Rs 176.77 crore in Q2 September 2017 over Q2 September 2016.

Visa Steel was locked at 20% upper circuit at Rs 21.50 after the Reserve Bank of India (RBI) hiked foreign investment limit in the company to 74% from 24%. Further, it is notified that the NRI investment limit under Portfolio Investment Scheme in the company has increased from 10% to 24% of its paid up capital.

Meanwhile, Visa Steel after market hours on Friday, 13 October 2017 said that the scheme of amalgamation of Visa BAO with Visa Steel has been approved by the National Company Law Tribunal, Kolkata Bench, vide order dated 12 October 2017.

On the macro front, the annual rate of inflation, based on monthly wholesale price index (WPI), stood at 2.6% (provisional) for the month of September 2017 as compared to 3.24% (provisional) for the previous month and 1.36% during the corresponding month of the previous year. The data was released by the government during market hours today, 16 October 2017.

India's merchandise exports rose by 25.67% to $28.61 billion in September 2017 over September 2016, helping the trade deficit narrow to $8.98 billion, the data released by the government after market hours on Friday, 13 October 2017 showed.

The International Monetary Fund (IMF) Chief Christine Lagarde reportedly said that the Indian economy is on a solid growth track in the medium and long term due to the structural reforms undertaken by the government, and the current slowdown due to implementation of the goods & services tax (GST) and demonetisation is short term. The IMF has last week lowered India's growth forecast for 2017-18 to 6.7% from its earlier estimate of 7.2%, citing lingering impact of demonetisation and transition cost to GST.

Overseas, European shares were mixed as investors monitored the latest in political news coming out of the UK. Reports suggested that British leader Theresa May will head to Brussels today, 16 October 2017 for talks with European Union leaders amid reports that she has personally urged Angela Merkel to end the Brexit stand-off. The meeting comes days after Jean-Claude Juncker, the President of the EU Commission, and Michel Barnier, the EU's chief negotiator reportedly said talks about Britain leaving the EU in March 2019 were deadlocked.

Asian stocks edged higher as investors digested the release of China inflation data. China's consumer price index rose 1.6% in September from a year ago. The producer price index rose 6.9% in the same period.

US stocks reached record highs on Friday, 13 October 2017 as investors bet on another strong earnings season. US Federal Reserve Chair Janet Yellen on Sunday, 15 October 2017 sketched a bright outlook for the US economy and for inflation prospects in coming months suggesting that the central bank will soon resume raising interest rates to reflect the strengthening economy. Most economists foresee the next rate hike -- the third this year -- coming in December.

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