Weak manufacturing PMI drags the market further low

Indian markets continue to trade lower, the weakness that had gripped the markets in very start has deepened further with the announcement of a weaker manufacturing PMI data. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index, showing a weakest rise in output in current 24-month, posted a 22-month low of 50.7 in October against 51.2 in September. The global cues too were pressurizing the sentiments with most of the Asian markets trading in red, though the Chinese market was showing signs of recovery on stimulus hopes after the official Manufacturing PMI figure showed contraction for a third consecutive month. Back home, banking sector that had made a good start after international ratings agency Moody’s Investor Services said it has revised its outlook on the Indian banking system to stable from negative, owing to the changing operating environment of local banks, too have lost their momentum and were trading lower. Auto stocks were in the limelight on announcing their October sales numbers, while Tata Motors and M&M gained on higher sales Bajaj Auto fell around 5 per cent as October sales were below estimates. Among broader markets, BSE Midcap and Smallcap indices too were trading lower by about a quarter percent.

The BSE Sensex is currently trading at 26516.71, down by 140.12 points or 0.53% after trading in a range of 26499.02 and 26824.30. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.11%, while Small cap index lost 0.30%.

The gaining sectoral indices on the BSE were Realty up by 0.74%, Auto up by 0.41%, Consumer Durables up by 0.32% while, Capital Goods down by 1.35%, Metal down by 1.03%, PSU down by 0.53%, Power down by 0.53%, IT down by 0.47% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.49%, Tata Motors up by 1.29%, ICICI Bank up by 1.12%, Maruti Suzuki up by 0.84% and Coal India up by 0.44%. On the flip side, Bajaj Auto down by 4.48%, Hindalco down by 2.62%, Lupin down by 2.53%, Tata Steel down by 2.37% and Larsen & Toubro down by 2.23% were the top losers.

Meanwhile, India’s fiscal situation was retained well within the control and showed improvement in April-September period over the year ago, despite spending heavily on public investments. As per the data released by the Controller General of Accounts, the fiscal deficit for the first half of the current fiscal year stood at Rs 3.78 lakh crore or 68.1 percent of the Budget estimate (BE) for the whole year pegged  at Rs 5.55 lakh crore or 3.9 percent of GDP. The fiscal situation showed improvement for the six months of the current fiscal year over the year ago as the deficit then stood at 82.6 percent of the Budget estimate of 2014-15.

The data further highlighted that the revenue collections picked up pace during the first six months at Rs 5.31 lakh crore or 45 percent as against 35.1 percent the same period last fiscal. Total receipts from revenue and non-debt capital of the government during the first six months read Rs 5,31,982 crore or 43.5 percent. The government estimates Rs 12.21 lakh crore receipts at end-March 2016.

On the other side, the total expenditure touched Rs 9.10 lakh crore or 51.2 percent as against the government's estimate for the current fiscal at Rs 17.77 lakh crore. Plan expenditure jumped to Rs 2.53 lakh crore or 54.6 percent of the full-year budget estimate as against 42.8 per cent of the BE in the same period a year ago. The drinking water and sanitation, coal, civil aviation, heavy industries, petroleum and natural gas and road transport and highways ministries registered heavy plan spending. Meanwhile, the non plan expenditure during April-September of 2015-16 was at Rs 6.56 lakh crore or 50 percent which is half of the budget target for this fiscal year.

As per the data released by the Controller General of Accounts, tax revenue in the first half of the fiscal year amounted to Rs 3.69 lakh crore, or 40.2 percent, of the full year budget estimate of Rs 9.19 lakh crore, as against 33.1 per cent of the estimates a year ago. Tax revenues have been helped by good indirect tax collections, providing some cushion to a likely shortfall in direct tax collections and lower than estimated disinvestment receipts. Collections of both excise and customs duties crossed the Rs 1-lakh-crore mark in the first six months of the fiscal year as against Rs 60,547 crore and Rs 87,408 crore, respectively, on September 30, 2014.

The revenue deficit during the six months period stood at 2.69 lakh crore, or 68.2 percent, of BE for 2015-16. This data will give comfort to the Finance Ministry, which has been concerned about a shortfall in disinvestment proceeds this fiscal year. Recently, Finance Minister Arun Jaitley had said that the fiscal deficit target of 3.9 per cent of GDP for 2015-16 would be met.

The CNX Nifty is currently trading at 8028.90, down by 36.90 points or 0.46% after trading in a range of 8019.35 and 8060.65. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.50%, ICICI Bank up by 1.23%, Tata Motors up by 1.19%, Zee Entertainment up by 1.09% and Maruti Suzuki up by 0.83%. On the flip side, Bajaj Auto down by 4.42%, Hindalco down by 2.80%, Lupin down by 2.75%, Tata Steel down by 2.31% and Larsen & Toubro down by 2.06% were the top losers.

Most of the Asian markets were trading in red, barring KOSPI Index which was up by 3.87 points or 0.19% to 2,033.34 and Taiwan Weighted which increased by 35.41 points or 0.41% to 8,589.72.

On the other hand, Nikkei 225 plunged by 385.5 points or 2.02% to 18,697.60, Hang Seng lost 148.28 points or 0.65% to 22,491.76, Shanghai Composite declined by 9.86 points or 0.29% to 3,372.70, Jakarta Composite lost 6.3 points or 0.14% to 4,448.88 and FTSE Bursa Malaysia KLCI was lower by 2.56 points or 0.15% to 1,663.15.