Nightmarish session on D-street ends with around 2% of bloodbath

Last session of September F&O series turned out to be a big disappointment for the Indian benchmarks which disintegrated like a ‘house of cards’ and went on to breach many key technical levels in around two percent freefall. After a smart up move in opening trades, Indian equity indices witnessed a panic selling in noon session after the Indian army said it has conducted surgical strikes on Wednesday night on terrorist launch pads in Pakistan, killing several terrorists and causing significant casualties to their hideouts. The Army said special commandos crossed the LoC last night, conducted the operation in the Pakistan-Occupied Kashmir (PoK) and returned to the Indian side without any casualty. India had repeatedly warned Pakistan not to allow its territory to be used for terrorist activities. Besides, India had called for an international diplomatic boycott of Pakistan as it shielded terrorists on its land. At the United Nations General Assembly, External Affairs Minister Sushma Swaraj said Pakistan was a terror state and it need to rein in terror elements. Though, investors got some respite in afternoon session after Niti Aayog Chief Amitabh Kant said the market should be confident and take government's move positively, selling once again intensify in late afternoon session after Pakistan Prime Minister Nawaz Sharif strongly condemned the unprovoked and naked aggression by India along the LoC and said Pakistan's armed forces are fully capable of defending the territorial integrity of the country. Sharif also warned that Pakistan's intent for peaceful neighborhood should not be mistaken as its weakness.

The fear among investors was palpable all over, as Nifty VIX spiked some 35 percent to hit a three-month high to 19.12.  Anxiety was not limited to stocks markets; rupee and bonds too plunged after the army said it attacked terrorist camps in Pakistan. The weakness in domestic currency intensified amid concerns that foreign investors, who have pumped in about Rs 50,000 crore into domestic stocks so far this year, may run for the exit door if the tensions were to rise further.  Meanwhile, stocks rallied across Asia and Europe after OPEC’s surprise announcement of a deal to cut crude output spurred a surge in oil late Wednesday. Japanese market edged higher as sluggish retail sales data pushed the yen lower against the dollar and euro. Retail sales in Japan fell 1.1 percent in August from the previous month, when they rose 1.5 percent. Further, Chinese stocks rose, led by energy shares, but turnover in Shanghai was near a four-month low as traders braced for a long holiday.

Back home, after getting a firm start, the local indices showed some strength in morning trades, but the sentiments turned pessimistic in noon trades and index start drifting lower. Thereafter, the benchmarks barely managed to show signs of stabilizing in the session and settled with large cuts. The NSE’s 50-share broadly followed index Nifty, suffered a nasty one fifty point laceration to settle below the crucial 8,600 support level, while Bombay Stock Exchange’s Sensitive Index Sensex got obliterated by over four hundred points and closed below the psychological 27,900 mark. The broader markets failed to show any kind of fervor and settled on an uninspiring note, underperforming their larger peers by a fat margin. On the sectoral front, Realty, Power and Metal witnessed brutal assaults as they got clobbered by 6.31%, 4.11% and 3.17% respectively. While counters like Consumer Durables and PSU too suffered severe pounding. There appeared absolutely no gainer either on the BSE sectoral front. The market breadth remained awful as there were 442 shares on the gaining side against 2297 shares on the losing side while 192 shares remained unchanged.

Finally, the BSE Sensex declined by 465.28 points or 1.64% to 27827.53, while the CNX Nifty dropped 153.90 points or 1.76% to 8,591.25. 

The BSE Sensex touched a high and a low of 28475.57 and 27719.92, respectively and there was just 1 stock on gainers side against 29 stocks on the losers side on the index. The broader indices too made a negative closing; the BSE Mid cap index ended lower by 3.60%, while Small cap index was down by 4.02%.

The top losing sectoral indices on the BSE were Realty down by 6.31%, Power down by 4.11%, Metal down by 3.17%, Consumer Durables down by 2.84%, PSU down by 2.82%, while there were no gainers on the BSE sectoral space.

The sole gainer on the Sensex was TCS up by 0.46%. On the flip side, Adani Ports & SEZ down by 5.01%, Sun Pharma down by 3.84%, ICICI Bank down by 3.76%, GAIL India down by 3.19% and Tata Steel down by 3.15% were the top losers.

Meanwhile, with India improving its ranking in World Economic Forum’s (WEF’s) competitiveness index, the government has expressed hopes that the country will show similar performance in World Bank's ease of doing business ranking, which may lead to upgrade of the country’s sovereign ratings. 

Finance Minister Arun Jaitley has said that though global credit rating agencies follow their own procedure they will certainly take into account the 16-point jump in India's ranking in the World Economic Forum's (WEF) Index. As per latest edition of the Global Competitiveness Report released by WEF, India's competitiveness improved the fastest in 2015-16, and the country climbed 16 places to the 39th rank among 138 countries in the index. India was ranked 130th among 189 countries in the ease of doing business rankings 2016 Jaitley said the WEF report indicates that if there is a possible implementation of the GST in 2017 then that part of negative categorisation with regard to goods market itself would get adequately taken into consideration. Jaitley said 'keeping the popular aspirations, the reform agenda of the government, a possible continuous improvement in the goods market through the GST and steps in the digital India space, I am sure that this momentum would continue.” He added that the areas like health care and education where they need to do a lot more in order to further move up as far as this agenda is concerned. 

With regard to India's information and communications technology (ICT), he said that the WEF report indicates that the ranking is likely to move up on ongoing effective implementation of Digital India.  India’s competitiveness has improved this year across the board, in particular in goods market efficiency, business sophistication and innovation. The macroeconomic environment also improved due to better monetary and fiscal policies and lower oil prices.

The CNX Nifty traded in a range of 8,800.65 and 8,558.25. There were 3 stocks in green against 48 stocks in red on the index.

The few gainers on Nifty were Bharti Infratel up by 3.36%, TCS up by 0.58% and Coal India up by 0.44%. On the flip side, BHEL down by 7.23%, Aurobindo Pharma down by 4.36%, Hindalco down by 4.11%, Adani Ports &Special down by 4.06% and Tech Mahindra down by 3.52% were the top losers.

The European markets were trading in red; UK’s FTSE 100 increased 74.13 points or 1.08% to 6,923.51, Germany’s DAX increased 70.93 points or 0.68% to 10,509.27 and France’s CAC increased 53.54 points or 1.21% to 4,485.99.

The Asian markets ended in green on Thursday after bank shares recovered in Europe, US durable goods orders data beat estimates and OPEC members surprised market participants with a preliminary deal to curb output. A final decision on the OPEC agreement for a modest oil output cut would be taken at the next formal meeting, set to be held in Vienna on November 30. Japanese shares rallied as the OPEC deal and sluggish retail sales data pushed the yen lower against the dollar and euro. Retail sales in Japan fell 1.1 percent in August from the previous month, when they rose 1.5 percent, a government report showed. Meanwhile, Chinese stocks rose, led by energy shares, but turnover in Shanghai was near a four-month low as traders braced for a long holiday.