Markets despite some recovery continue to trade weak

The aftershocks of the Bihar state assembly election results are still persisting in the markets and the major averages were down in dumps despite recovering from the initial sharp fall. The BSE Sensex which opened over 2% or 600 points lower, was still trading below the psychologically important 26,000-mark and the CNX Nifty was way below 7900 mark. The humiliating defeat for the BJP-led led NDA in the Bihar assembly election has made the markets worried about increased political opposition for key reforms such as the Goods and Services Tax (GST). However, there was some recovery, with finance minister Arun Jaitley’s statement who attributing the NDA's defeat in Bihar assembly elections to 'huge index of opposition unity',  said that it will not impact the economic reforms process. He also said that he hope that Bihar, which is a consuming state, would support the legislation the pending  GST bill in the parliament. Though, there is not much movement but traders were picking up selective fundamentally sound stocks amid the rout that has helped the markets recover from the lows of the day. Festivity mood was keeping the consumer durables and auto stocks in high spirit, otherwise all other sectoral indices were trading in red. Some upmove was seen in the PSU oil marketing companies too, as the minister of state for petroleum and natural gas Dharmendra Pradhan said that government is considering a proposal to remove cooking gas subsidy for those earning above a certain threshold. HPCL and BPCL were trading up by around half a percent.

The BSE Sensex is currently trading at 25954.66, down by 310.58 points or 1.18% after trading in a range of 25656.90 and 26007.44. There were just 4 stocks advancing against 26 stocks declining on the index.

The broader indices were showing a mixed trend; the BSE Mid cap index was down by 0.05%, while Small cap index was up by 0.13%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.87%, Auto up by 0.34%, FMCG up by 0.26% , while Realty down by 2.09%, Power down by 1.28%, TECK down by 1.25%, Metal down by 1.22%, Bankex down by 1.13% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.46%, Maruti Suzuki up by 1.80%, SBI up by 0.35% and ITC up by 0.21%. On the flip side, Sun Pharma Inds. down by 5.49%, Dr. Reddys Lab down by 4.12%, BHEL down by 2.84%, ICICI Bank down by 2.37% and Wipro down by 2.36% were the top losers.

Meanwhile, amid slump in global demand, India’s exports of the top five sectors which include engineering, petroleum, gems and jewelery, textiles and pharmaceuticals declined by 31 percent to $13.6 billion in the month of September . In September last year, exports of these sectors stood at $19.7 billion. As per data compiled by Commerce Ministry, engineering exports growth turned negative (-) 22.81 per cent, petroleum - 60.35 per cent, textiles -12 per cent and gems and jewellery -18.81 per cent in September. However, pharmaceuticals sector managed to register a growth of 9 per cent in September.

In the last financial year, these five sectors accounted 65 per cent of the total merchandise exports and stood at $202.15 billion while the total exports were $310.5 billion. Federation of Indian Export Organisations (FIEO), while expressing concerns over continuous dip in exports has said that the government should immediately announce steps like extending interest subsidy benefits to contain the dip in exports.

Decline in exports has been instrumental in dragging down India's overall merchandise exports. Indian exports contracting for the 10th month in a row, dipped 24.33 per cent in September to $21.84 billion. The significant fall in country's exports was mainly due to steep fall in shipments of petroleum products, iron ore, and engineering goods amid tepid global demand. The continuous decline in exports is expected to impact jobs and put pressure on the current account deficit.

The Parliamentary Consultative Committee of the Ministry of Commerce and Industry held a meeting in Goa recently to review India's exports performance and to discuss issues related to continuous dip in exports and ways to boost the country’s exports. Further, Commerce Minister Nirmala Sitharaman highlighted the concern that China has been making efforts to stall India's exports through non-tariff barriers such as phytosanitary stipulations and standardisation issues.

The CNX Nifty is currently trading at 7860.00, down by 94.30 points or 1.19% after trading in a range of 7771.70 and 7874.30. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.51%, Bank Of Baroda up by 1.95%, Maruti Suzuki up by 1.87%, PNB up by 1.69% and Asian Paints up by 0.95%. On the flip side, Sun Pharma Inds. down by 5.53%, Idea Cellular down by 4.16%, Dr. Reddys Lab down by 4.10%, Cairn India down by 3.51% and BHEL down by 2.74% were the top losers.

On the other hand, Jakarta Composite lost 73.23 points or 1.6% to 4,493.32, Taiwan Weighted declined by 51.09 points or 0.59% to 8,642.48, KOSPI Index was lower by 15.37 points or 0.75% to 2,025.70, Hang Seng was down by12.75 points or 0.06% to 22,854.58 and FTSE Bursa Malaysia KLCI decreased by 3.29 points or 0.2% to 1,682.4.