Markets end lower amid weak global cues; Nifty breaches 7,800 mark

Tuesday turned out to be a disappointing session for the Indian equity indices which got pounded by around one and half a percentage point, on account of sustained selling in frontline line blue-chip stocks amid weak Asian markets on worries about the likely US rate hike. The domestic benchmarks traded range bound for most part of the session but a sharp wave of selling, which emerged in last leg of trade, dragged the key gauges below their crucial support levels of 25,750 (Sensex) and 7,800 (Nifty). After a lower opening, the domestic bourses never looked in recovery mood. Further, weak global markets sentiment and the loss of the NDA in the Bihar elections also created uncertainty among the investors, as the poll debacle is perceived as a major challenge for the government to push the key economic reform initiatives.

Investors failed to get any sense of relief with the Paris-based think tank OECD’s latest forecast, which despite cutting the global growth forecast said that with “relatively robust” growth prospects, the Indian economy is expected to expand by 7.2 percent this fiscal. Also, Fitch Ratings had said that BJP's defeat in the Bihar assembly elections is unlikely to have any major implications on the economic front. Moreover, traders also overlooked strong indirect tax collections data which registered an increase of almost 36% in the first seven months of the current fiscal at Rs 3.83 lakh crore on the back of a spurt in economic activity.

On the global front, European markets after made a higher opening in early deals, recovering from the previous session's losses amid hopes for additional easing measures by the European Central Bank, but lost direction and were trading in red. Asian shares too ended mostly in red on Tuesday as the spectre of higher borrowing costs in the United States and slower global economic growth prompted investors to trim their exposure to riskier assets.

Back home, traders also remained concerned on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 861.06 crore on November 9, 2015, as per provisional data released by the stock exchanges. On the secoral front, strong selling pressure was witnessed in, oil & gas and metal stocks. Cairn India fell over 5 per cent while ONGC plunged nearly 5 per cent amid continuing weakness in crude prices. Among metal stocks, Vedanta declined 3.68 per cent and Tata Steel 1.9 per cent. On the other hand, some buying was witnessed in auto and consumer durable stocks on hopes that the festive season will perk up sales.

The NSE’s 50-share broadly followed index Nifty lost over one hundred and thirty points to end below the psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around three hundred and eighty points to finish below its psychological 25,750 mark. Broader markets too witnessed selling pressure and ended the session with a cut of over one and a half percentage point. The market breadth remained in favor of decliners, as there were 1030 shares on the gaining side against 1586 shares on the losing side while 120 shares remain unchanged.

Finally, the BSE Sensex plunged by 378.14 points or 1.45% to 25743.26, while the CNX Nifty declined by 131.85 points or 1.67% to 7783.35. 

The BSE Sensex touched a high and a low 26094.09 and 25709.23, respectively. The BSE Mid cap index was down by 1.68%, while Small cap index down by 0.81%

The gaining sectoral indices on the BSE was Auto up by 0.10%, while Oil & Gas down by 3.77%, Metal down by 2.78%, Realty down by 2.42%, PSU down by 2.42% and IT down by 1.78% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.68%, Hero MotoCorp up by 1.49%, Bajaj Auto up by 1.36%, Mahindra & Mahindra up by 1.13% and Axis Bank up by 0.76%. On the flip side, ONGC down by 4.90%, Dr. Reddys Lab down by 4.80%, Reliance Industries down by 3.96%, Lupin down by 3.92% and Coal India down by 3.76% were the top losers.

Meanwhile, the government is working on a proposal to indicate applicability of Foreign Direct Investment (FDI) policy against each entry in National Industrial Classification (NIC) code, with a view to improve the ease of doing business. The Department of Industrial Policy and Promotion (DIPP) has prepared a draft list in this regard and it has sought comments and suggestions from the stakeholders and investors on this latest by November 20.

In order to provide greater clarity and simplicity to foreign investors, DIPP has initiated an exercise for preparation of identifying applicability of the FDI policy para as per each identified activity provided in NIC Code 2008. Under this exercise, the codification had been started off with the NIC-2008 code book indicating against each entry as to whether FDI is allowed therein, and if so, it is on automatic or approval route along with para number of FDI policy.

The DIPP, which is under the Ministry of Commerce and Industry, is the nodal agency on FDI policy. It compiles all policies related to India's FDI regime into a single document to make it simple and easy for investors to understand.The code will classify business activities and help the industry in seeking policy approvals for specific activities. All the economic activities are classified as per the NIC Code. The classification is necessary for seeking industrial licenses and submitting industrial entrepreneurs memorandum.

According to the World Bank report 'Doing Business 2016', India now ranks 130th out of 189 countries in the ease of doing business, moving up 12 places from last year.

The CNX Nifty touched a high and low 7885.10 and 7772.85 respectively.

The top gainers on Nifty were Bajaj Auto up by 2.01%, Hero MotoCorp up by 1.90%, Maruti Suzuki up by 1.83%, Mahindra & Mahindra up by 0.96% and Bank Of Baroda up by 0.87%. On the flip side, ONGC down by 5.05%, Dr. Reddys Lab down by 4.87%, Cairn India down by 4.83%, Lupin down by 4.19% and Ambuja Cement down by 4.05% were the top losers.

European Markets were trading in red; Germany’s DAX decreased 46.86 points or 0.43% to 10,768.59, UK’s FTSE 100 decreased 24.48 points or 0.39% to 6,270.68 and France’s CAC decreased 17.71 points or 0.36% to 4,893.46.

The Asian markets closed mostly lower on Tuesday, amid sharpening worries about global growth. Stock markets in Malaysia and Singapore was closed on account of holiday. China’s President Xi Jinping stated that the country must strengthen its reforms and modernize its system of governance over the next five years. The president added that the government will push forward reforms in its free trade zones where it will provide more support for financial experimentation, including loosening market access and further opening the services sector. The annual rate of inflation in China slowed more than expected in October, adding to concerns over a slowdown in the world’s second-largest economy. The National Bureau of Statistics stated that the consumer price index rose just 1.3% in October from a year earlier, slowing from 1.6% in September. Consumer prices fell 0.3% from a month earlier, after a 0.1% increase in September. The producer price index fell 5.9% in October on a year-over-year basis, matching Septembers decline. The weak data added to concerns over growing deflationary pressures, fueling expectations that Beijing will step up measures to bolster the faltering economy before the year end. Japan’s service sector sentiment index rose to 48.2 in October.  The outlook index, indicating the level of confidence in future conditions, was at 49.1 in October, unchanged from the previous month.