Benchmarks slip lower for third day in a row; Sensex ends below 28250 level

Indian benchmarks witnessed yet another volatile day of trade ahead of the September F&O expiry scheduled on Thursday. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory to complete a hat-trick of negative close despite getting off to a positive opening. Sentiments remained subdued with WTO estimates showing that world trade will grow more slowly than expected in 2016, expanding by just 1.7%, well below the April forecast of 2.8%. The forecast for 2017 has also been revised, with trade now expected to grow between 1.8% and 3.1%, down from 3.6% previously. Besides, uncertainty about the US election outcome has made global markets risk-averse. Investors from domestic markets are also looking ahead to the Reserve Bank of India's rate-setting meeting on October 4, amidst the backdrop of declining retail inflation. However, investors got some comfort with statement of Ravindra Dholakia, one of the three government appointees to the newly formed Monetary Policy Committee (MPC) that there will be no tug of war in the MPC. Some support also came with the report that the government is working on a bouquet of reforms to play to the country's core strengths of technology, leisure travel and medical tourism.  The commerce department has circulated a cabinet note on domestic reforms to enhance earnings from services exports, detailing measures that can be implemented after due deliberations. Meanwhile, buying was observed in selected oil & gas counters on Moody's Investors Service’s report that  India's petroleum consumption will grow at 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. On the other hand, telecom stocks like Bharti Airtel, Idea Cellular and MTNL came under selling pressure after telecom regulator TRAI said it will slap show cause notices on operators for call drops that are far exceeding the norm.

On the global front, Asian markets ended mostly higher on Tuesday with investors viewing Democratic candidate Hillary Clinton as having gotten the upper hand in the first U.S. presidential debate that pitted her against Republican hopeful Donald Trump. Markets participants also kept an eye on an informal OPEC meeting in Algeria. Chinese market ended in green but trade was thin, with many traders reluctant to stake out fresh positions ahead of a week-long holiday despite a surge in August industrial profits. Japanese market snapped a two-day losing streak, even as banking stocks remained under pressure in the wake of falling US bond yields and worries about the financial health of German lender Deutsche Bank. Meanwhile, European stocks edged lower, with the energy sector under pressure after Iran poured cold water on hopes for an output-cap deal at a meeting of major oil producers this week.

Back home, the local benchmarks got off to a positive opening, amid the cautiously optimistic sentiments prevailing in Asian markets. The indices in no time climbed to intraday highs and traded around the psychological 28,350 (Sensex) and 8,750 (Nifty) levels through the morning trades. But the optimism soon started easing in late hours of trade and profit booking in few sectors and drifting European markets weighed down the local bourses. However, late short covering in blue-chip stocks ensured that local bourses go home with only modest losses. Finally, the NSE’s 50-share broadly followed index - Nifty plunged by around quarter percent to settle above the crucial 8,700 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by over seventy points and closed above the psychological 28,200 mark. On the BSE sectoral front, the Capital Goods pocket bore the maximum brunt of selling pressure as it got thrashed by over a percent, followed by the Oil & Gas index, which too went home with hefty losses of over half percent. On the flipside, buying was observed in the IT counters which climbed by 0.70%, while the Consumer Durable and Realty indices too went home with around quarter percent gains.

The market breadth remained pessimistic, as there were 1254 shares on the gaining side against 1430 shares on the losing side, while 215 shares remained unchanged.

Finally, the BSE Sensex declined by 70.58 points or 0.25% to 28223.70, while the CNX Nifty dropped 16.65 points or 0.19% to 8,706.40. 

The BSE Sensex touched a high and a low 28432.74 and 28179.34, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.11%, while Small cap index was higher by 0.13%.

The top gaining sectoral indices on the BSE were IT up by 0.70%, TECK up by 0.36%, Consumer Durables up by 0.27% and Realty up by 0.22%, while Capital Goods down by 1.12%, Oil & Gas down by 0.72%, Metal down by 0.68%, PSU down by 0.62% and Bankex down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 1.26%, TCS up by 1.24%, Wipro up by 1.17%, Asian Paints up by 0.90% and Sun Pharma Inds. up by 0.54%. On the flip side, Adani Ports &Special down by 2.20%, Bharti Airtel down by 2.01%, Larsen & Toubro down by 1.99%, ONGC down by 1.20% and Axis Bank down by 1.19% were the top losers.

Meanwhile, the country's chief statistician T C A Anant has said that if the country wants considerable development and to emerge as an economic power, it needs to aim for a 10 per cent gross domestic product (GDP) growth rate and sustain it over a decade.

Anant emphasized that the aim for a double digit GDP growth needs to become a habit with the policymakers in the country which they need to endure over a period of time. However, he also said that even a growth rate of 10 per cent continuing for a decade at a stretch may not help India overtake China to emerge as the economic leader in Asia.

He said that Goods and Services Tax (GST), which the Centre is planning to implement from April 1, 2017, will help in calculating the country’s GDP in a better way. Once GST is in place, calculation of GSP (gross state product) will be better. Now GDP at market prices is calculated by adding GVA (gross value added) with taxes and then subtracting the subsidies.

The chief statistician also defended the new series of national income used for GDP calculation, which created controversy, and said “This is better than the older one which did not capture the entire value chain. He added that in new series certain changes have been made like sources of collating data, creation of a quasi-corporate entity which does not submit accounts and corporate, which maintain accounts, among others. The CNX Nifty traded in a range of 8,768.50 and 8,690.50. There were 19 stocks advancing against 32 decliners on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.66%, TCS up by 1.50%, Lupin up by 1.27%, YES Bank up by 1.19% and Ambuja Cement up by 1.16%. On the flip side, Adani Ports &Special down by 2.18%, Hindalco down by 1.69%, Bharti Infratel down by 1.67%, BPCL down by 1.60% and Larsen & Toubro down by 1.50% were the top losers.