Benchmarks end a disappointing day with half a percent cut

Lower earnings guidance from IT majors, along with heightened chances of a US rate hike dragged the Indian equity markets lower on Monday. Besides, weak trade in Asian markets, hike in petroleum product prices and a massive outflow of foreign funds during the last week eroded investors’ confidence. Investors remained cautious over weakness in the rupee against the dollar after the country’s foreign exchange reserves declined by a whopping $4.343 billion to $367.646 billion in the week to October 7, 2016. Indian rupee weakened by 12 paise to trade at 66.83 against the US dollar at the time of equity markets closing. Also, a study claimed that as many as 550 jobs have disappeared every day in last four years and if this trend continues, employment would shrink by 7 million by 2050 in the country. However, major losses were restricted with Prime Minister Narendra Modi’s assertion that results of the reforms undertaken by his government were visible and the country has transformed into 'one of the most open economies' in the world with a strong growth rate. Some support also came with report that India’s export during September 2016 has shown sign of revival, registering a growth of 4.62 per cent in dollar term to $22.88 billion as compared to $21.86 billion in September 2015.

On the global front, Asian markets ended mixed on Monday, as investors avoided taking risks after Federal Reserve Chair Janet Yellen's comments that aggressive steps may be required to address the lingering effects of the financial crisis on the US economy. Caution over a slew of Chinese economic data due out this week saw Hong Kong markets slip, but property stocks gained, thanks to a strong weekend of sales. Japanese markets rose, as shares likely received a boost from a relatively weaker yen which is positive for exporters as it increases their overseas profits when converted back to local currency. Meanwhile, European markets started the week on softer note as investors remained cautious ahead of earnings, key data and a European Central Bank (ECB) meeting later this week. The oil and gas sector led declines in Europe, with Brent crude oil down 0.3% at $51.79 barrel after data showed an increase in active U.S. oil rigs.

Back home, after starting the session on cautious note, the local benchmarks continued to trade near neutral line throughout the morning session as investors await key earnings for further signs of economic revival. However, sharp selling observed in noon session, which led to benchmark indices falling for the lowest point of the day as selloff in Chinese shares raised concerns around global growth. Some late short covering in blue-chip ensured that local bourses go home with relatively small losses. Finally the NSE’s 50-share broadly followed index Nifty, took a cut of over half percent to settle below the crucial 8,550 support level while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by over hundred points and closed below the psychological 27,550 mark. Moreover, the broader markets too failed to show any kind of fervor and closed with losses of over half a percent. On the BSE sectoral front, the Auto pocket bore the maximum brunt of selling pressure as it got thrashed by over two percent, followed by the Capital Goods index, which too went home with hefty losses of 1.47%. On the other hand, the Banking pocket remained the only gainer in the space after the Ruias of the Essar group signed a binding agreement with Russia’s Rosneft, United Capital Partners and Trafigura Group Pte to sell 98% in its most priced asset, the 20 million tonnes per annum Vadinar refinery and Vadinar port in Gujarat. The proceeds of the sale will be used to repay loans of both foreign and local lenders, which was around Rs 88000 crore. The market breadth remained pessimistic as there were 1290 shares on the gaining side against 1513 shares on the losing side while 175 shares remained unchanged.

Finally, the BSE Sensex declined by 143.63 points or 0.52% to 27529.97, while the CNX Nifty dropped 63 points or 0.73% to 8,520.40. 

The BSE Sensex touched a high and a low of 27803.21 and 27488.30, respectively and there were 6 stocks on gainers side against 24 stocks on the losers side on the index. The broader indices made a negative closing; the BSE Mid cap index ended lower by 0.95%, while Small cap index was down by 0.52%.

The sole gaining sectoral index on the BSE was Bankex up by 0.50%, while Auto down by 2.12%, Capital Goods down by 1.47%, Realty down by 1.19%, Metal down by 1.19% and TECK down by 0.95% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.91%, NTPC up by 1.76%, Hindustan Unilever up by 0.88%, ONGC up by 0.69% and SBI up by 0.48%. On the flip side, Mahindra & Mahindra down by 3.22%, Hero MotoCorp down by 2.24%, Asian Paints down by 2.07%, HDFC Bank down by 1.87% and Bajaj Auto down by 1.80% were the top losers.

Meanwhile, Mines Ministry has launched the mining surveillance system (MSS), a pan-India surveillance network using latest satellite technology, to check illegal mining. MSS is a satellite-based monitoring system, which aims to check illegal mining activity through automatic remote-sensing detection technology.

The Indian Bureau of Mines, on behalf of the mines ministry, has developed MSS, in co-ordination with the Bhaskaracharya Institute for Space Applications and Geo-informatics (BISAG), Gandhinagar and the Ministry of Electronics and Information Technology (MEITY). The system checks 500 meters around the existing mining lease boundary to search for any unusual activity relating to illegal mining, if any unusual activity takes place outside the perimeter of a mine boundary up to 500 metres, the MSS system will generate automatic triggers and same will be intimated to the IBM control room in Hyderabad and subsequently intimated to the state mining officials to verify whether the mine owner has indulged in illegal mining and if the mine owner is found excavating ore outside his territory, the state government can impose fine against him.

Mines Minister Piyush Goyal, said that the technology will ensure sustainable utilization of the country's mineral resources. The new system will cover major minerals, including coal, iron ore and bauxite at present and minerals like sand, lime stone and granite will be brought under its ambit in the coming days.

The CNX Nifty traded in a range of 8,615.40 and 8,506.15. There were 7 stocks in green against 44 stocks in red on the index.

The top gainers on Nifty were ICICI Bank up by 7.20%, NTPC up by 1.76%, Hindustan Unilever up by 0.78%, ONGC up by 0.70% and TCS up by 0.37%. On the flip side, Zee Entertainment down by 5.72%, Idea Cellular down by 3.28%, Bosch down by 3.09%, Ambuja Cements down by 3.04% and M&M down by 3.03% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 60.32 points or 0.86% to 6,953.23, Germany’s DAX decreased 67.03 points or 0.63% to 10,513.35 and France’s CAC decreased 27.32 points or 0.61% to 4,443.60.

Asian stocks ended mostly in green on Monday as a weakening yen aided market sentiment. Underlying sentiment remained somewhat cautious after global bond yields rose in the wake of comments from Federal Reserve Chair Janet Yellen on the economy. In a speech in Boston on Friday, Yellen offered an argument for running the US economy hot for a period to ensure moribund growth doesn't become an entrenched feature of the business landscape. Chinese shares fell the most in three weeks after a sudden bout of afternoon selling in dollar-denominated B shares amid weakness in the yuan, which hit a fresh six-year low against the greenback. Hong Kong shares drifted near 1-1/2-month lows, as a cautious mood prevailed ahead of a slew of China data this week that investors hope will paint a clearer picture of how the world's second largest economy is faring. Japanese shares eked out modest gains as the yen hovered near a three-week low against the dollar amid expectations of a US interest rate hike as early as December. Investors shrugged off a government report, which showed that Japan's industrial output rose less than initially estimated in August.