Markets end lower ahead of Bihar exit poll results

Thursday turned out to be a disappointing session for the Indian equity indices which got pounded by around a percentage point, as investors remained concerned ahead of the exit poll results after the completion of the final phase of the elections in Bihar. The fifth and final round of voting for 57 seats across nine districts in the Bihar Assembly poll takes place today. After a negative opening, the domestic bourses never looked in recovery mood and ended the trade at one month closing lows, breaching their crucial support levels of 26,250 (Sensex) and 8,000 (Nifty). Selling was both brutal and wide-based as none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included realty, healthcare and banking.

Sentiments remained dampened since beginning of the trade tailing the weakness in most of the Asian peers after Federal Reserve Chair Janet Yellen hinted a December interest rate hike in the United States. Traders failed to draw any sense of relief with Finance Minister Arun Jaitley’s statement that first tranche of corporate tax reduction will be made when the next Finance Bill comes. He also hinted at a possible consensus on land acquisition bill and said the government is making efforts in that direction so that it could be taken up in the upcoming Winter Session.

On the global front, European counters were trading mostly in green in early deals ahead of the Bank of England announcement of its rate decision. However, Asian counters ended mostly in red on Thursday after Federal Reserve Chair Janet Yellen signaled a possible interest rates increase next month.

Back home, depreciation in Indian rupee too dampened the sentiments. The rupee was at 65.75 per dollar at the time of equity markets closing as compared to 65.48 per dollar level on Wednesday. Meanwhile, Prime Minister Narendra Modi launched three ambitious schemes to reduce the physical demand for gold and fish out 20,000 tonnes of the precious metal worth $800 billion lying idle with households. However, PC Jewellers, Tribhuvandas Bhimji Zaveri, Rajesh Exports all finished lower between 0.2-2%.

Banking and financial shares too remained under pressure on a possible Fed rate hike announcement. Power stocks too ended lower despite the Finance Minister stating that the government in the next couple of days will announce a major policy for the stressed power sector, which has been reeling under high debt.

The NSE’s 50-share broadly followed index Nifty tumbled by over eighty points to end below the psychological 8,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around two hundred and fifty points to finish below its psychological 36,400 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around one and a half percentage points. The market breadth remained in favor of decliners, as there were 900 shares on the gaining side against 1,798 shares on the losing side while 118 shares remain unchanged.

Finally, the BSE Sensex plunged by 248.72 points or 0.94% to 26304.20, while the CNX Nifty declined by 84.75 points or 1.05% to 7955.45. 

The BSE Sensex touched a high and a low 26557.80 and 26243.20, respectively. The BSE Mid cap index was down by 1.47%, while Small cap index was down by 1.59%.  

The top losing sectoral indices on the BSE were Realty down by 2.63%, Healthcare down by 2.07%, Bankex down by 1.47%, TECK down by 1.41% and IT down by 1.22%, while there were no gainers on the sectoral index.

The top gainers on the Sensex were Coal India up by 2.13%, NTPC up by 0.97%, Hero MotoCorp up by 0.93%, ITC up by 0.60% and Mahindra & Mahindra up by 0.50%. On the flip side, Vedanta down by 4.66%, Tata Steel down by 4.33%, Sun Pharma down by 4.28%, BHEL down by 3.31% and Bharti Airtel down by 2.82% were the top losers.

Meanwhile, in a bid to relieve power sector from stress which has been reeling under high debt, the government will soon announce a major policy in the next couple of days. Finance Minister Arun Jaitley has said that once this happens, the private sector will also start participating.

Jaitley said ”The big problem area for us is the power sector. I think that is an infrastructure issue which we are going to be addressing literally in the next couple of days. We have almost finalised an approach in that direction”. Power sector is one area of infrastructure which has remained unaddressed for so many years. He said “I think it needs to be tackled immediately and our current focus is literally on this area”.

Jaitley stated that though India is generating more power than it needs and having surplus resource, the generation companies are in difficulty because there are no takers of power. The Cabinet at its next meeting may consider recasting Rs 4.3 lakh crore of loans of nine power distribution companies subject to states agreeing to cut down commercial losses, improve operational efficiency and raise electricity tariff over a period of time. Four states -- Tamil Nadu, Rajasthan, Uttar Pradesh and Haryana -- account for nearly 70% of the accumulated debt in the power sector, which has hurt public sector banks.

The CNX Nifty touched a high and low 8031.20 and 7944.10 respectively.

The top gainers on Nifty were Coal India up by 1.53%, NTPC up by 0.63%, Hero MotoCorp up by 0.61%, Asian Paints up by 0.47% and BPCL up by 0.23%. On the flip side, Sun Pharma down by 4.79%, Vedanta down by 4.66%, Tata Steel down by 4.61%, BHEL down by 3.90% and Bharti Airtel down by 3.35% were the top losers. European Markets were trading mostly in the green; France’s CAC was up by 0.57% and Germany’s DAX was up by 0.54%, while UK’s FTSE was down by 0.46%.

The Asian markets made a mixed closing on Thursday after Federal Reserve Chair Yellen said the US was ready for higher interest rates if upcoming economic data justified them. She said that a December interest rate would be a 'live possibility' if the incoming economic data supports such a move. Indonesia's economy grew slightly less than estimated in the third quarter. Gross domestic product expanded 4.73 percent in the third quarter from a year ago compared to second quarter's 4.67 percent growth. Meanwhile, Chinese shares extended the rally mood ahead of a high-stakes meeting between Chinese President Xi Jinping and Taiwanese President Ma Ying-jeou this Saturday. Telecom stocks remained in limelight on hint that further reorganization is in store for the nation’s state-run telecommunications industry. The Japanese market too ended higher, as the yen weakened against the US dollar and boosted exporters' stocks.