Markets extend southward journey for fourth straight session

Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday and after a cautious start extended their southward journey to close with a cut of around three fourth of a percent. Final hour of trade proved to be the curse for the markets and bourses settled below their crucial 26,900 (Sensex) and 8,150 (Nifty) bastions. Sentiments remained downbeat after US Fed in a direct reference put in play a rate hike at its next policy meeting in December.

Traders failed to draw any sense of relief from Finance Minister Arun Jaitley’s statement who after India jumped 12 positions to rank 130th in the world on ease of doing business said that the improvement in ranking does not fully reflect the reforms initiated and the position will improve further next year.

Selling got extended with European counters making weak opening. Meanwhile, UK house-price growth picked up slightly in October to the fastest in six months. Asian markets ended the session mostly in red on Thursday, however the Japanese market was higher despite the yen climbing with Japanese bond yields after a surprise jump in industrial production, dimming speculation over an increase in BOJ stimulus.

Back home, depreciation in Indian rupee against dollar too weighed down sentiments. The rupee was trading at 65.20 at the time of equity markets closing versus its previous close of 64.76. On the earning front, Yes Bank rose 2% after reporting a 26.5% rise in net profit for the September quarter due to lower provisions and higher net interest income and other income. However, Just Dial slumped over 11% after its quarterly earnings adjusted for other income missed estimates.

Selling continued in banking counter for second day in the row. The PSU oil marketing companies also remained under pressure after the international crude prices surged overnight, though there was some decline in today’s trade in prices after Pemex, the national oil company of Mexico, said it received permission to swap crude oil with the US, possibly ending the US ban on exporting crude. Stocks related to infrastructure space too suffered a sharp cut despite the National Highways Authority of India (NHAI) deciding to carry out detailed risk assessment of each stretch for which the tenders would be floated. Government has set up a target to push the award of highway projects to 12,000 km annually for the next four to five years from 8000 km at present.

NSE’s 50-share broadly followed index, Nifty declined by around sixty points to end below the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex slipped by over two hundred points to end below its psychological 26,900 mark. Broader markets too witnessed selling during the trade and ended the session with a cut of around half a percent. The market breadth remained in favour of decliners, as there were 1,224 shares on the gaining side against 1,438 shares on the losing side while 188 shares remain unchanged.

Finally, the BSE Sensex plunged by 201.62 points or 0.75% to 26838.14, while the CNX Nifty declined by 59.45 points or 0.73% to 8111.75.

The BSE Sensex touched a high and a low 27099.11 and 26794.10, respectively. The BSE Mid cap index was up by 0.44%, while Small cap index was up by 0.42%. 

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.39% and Auto up by 0.04%, while PSU down by 1.39%, Power down by 1.11%, Bankex down by 1.10%, Capital Goods down by 1.09% and FMCG down by 0.98% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.59%, Vedanta up by 1.71%, Tata Motors up by 1.36%, Lupin up by 0.53% and Reliance Industries up by 0.46%. On the flip side, BHEL down by 4.38%, Axis Bank down by 2.81%, Sun Pharma down by 2.36%, Coal India down by 2.30% and SBI down by 2.02% were the top losers.

Meanwhile, commerce Minister Nirmala Sitharaman has said that India is looking at the feasibility for providing easy and cost effective credit facilities, in order to built capacities in the developing nations, particularly in Africa. On the other side, she has asked the African countries to leverage 'Duty Free Tariff Preferences' (DFTP) offered by India.

Under DFTP scheme India provides duty free market access on over 95 per cent of tariff lines to least developed countries. Sitharaman has said that businesses in India and Africa could leverage the benefits offered by the DFTP while exploring each other's markets. Moreover, She added that not many countries have offered such overarching reduction in tariffs for least developed countries (LDCs), including those in Africa.

Sitharaman has advised the financial institutions and think tank in Africa and India to popularize the advantages of the scheme. She pointed out that India has been encouraging services cooperation with African nations. she further said that 'Africa has the potential for development of Tourism, Healthcare, Hospitality and ICT sectors. The Government of India supported Pan-Africa E-Network has contributed significantly to the Africa's skill development and healthcare delivery'.

The CNX Nifty touched a high and low 8179.60 and 8098.00 respectively.

The top gainers on Nifty were Yes Bank up by 2.25%, Dr. Reddys Lab up by 2.22%, Vedanta up by 2.14%, Lupin up by 0.87% and Ultratech Cement up by 0.84%. On the flip side, BHEL down by 4.43%, BPCL down by 3.40%, Axis Bank down by 3.12%, Coal India down by 2.85% and GAIL down by 2.44% were the top losers.

European Markets were trading in the red; France’s CAC was down by 0.72%, UK's FTSE was down by 0.85% and Germany’s DAX was down by 0.25%.

The Asian equity markets ended in red on Thursday, barring Shanghai Composite and Nikkei 225 which closed with marginal gains. Chinese leaders are meeting in Beijing to decide on an economic growth target for the next five years. China’s Premier Li Keqiang stated that China requires annual growth of at least 6.53 percent over the next five years. China’s most recent annual GDP target for 2015 stood at around 7 percent. The economy grew 6.9 percent in the third quarter from a year earlier. The Bank of Japan is expected to hold monetary policy steady on Friday even while diluting its rosy inflation forecasts, clinging to the hope a tightening job market will underpin consumption and help the economy emerge from a soft patch. Some BOJ policymakers have worried that sluggish demand in emerging Asian markets could hurt output and corporate sentiment enough to delay planned capital investment and wage hikes. The BOJ is also expected to maintain its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen ($663 billion) through aggressive asset purchases. Japan’s industrial production rose to a seasonally adjusted 1.0%, from -1.2% in the preceding month.