Indian benchmarks settle with marginal losses; Nifty slips below 8700 mark

Indian stock markets finished the session on a dull note, modestly below the neutral line as investors at large remained reluctant to build on long positions amid weak global cues, as oil prices dipped and after Chicago Fed President Charles Evans said that the Fed could raise short-term interest rates by three quarter-point by the end of 2017.  The session largely remained characterized by choppiness as the aimless indices moved only slowly creeping towards the previous closing levels after the early decline. Sentiments remained subdued with the report that foreign portfolio investors (FPIs) sold shares worth a net Rs 325.13 crore on October 24, 2016. Depreciation in Indian rupee too weighed down sentiments. However, investors got some encouragement with the report that Performance of States in improving the overall infrastructure for facilitating business has gone up, with a majority of them scoring over 80% in the World Bank-Department of Industrial Policy & Promotion ranking of States. The 'Make in India' programme of the government has spurred strong competition among Indian states in improving the ease of doing business in order to attract investments and drive the economies of their regions.  As many as 16 States have scored over 80% in the World Bank- DIPP ranking of States based on 340 parameters on ‘Ease of Doing Business’. Meanwhile, shares of Tata Group companies came under pressure after the board of Tata Sons announced the sudden removal of chairman Cyrus Mistry. In a dramatic development, Mistry was removed as Chairman of India’s largest conglomerate Tata Group and replaced by his predecessor Ratan Tata in the interim. On the other hand, banking stocks rose on the report that there is room for a 50 basis point (bps) rate cut by the Reserve Bank of India (RBI) over the next few months with 25 bps each likely in February and April 2017.

On the global front, Asian markets ended on mixed note as upbeat reports on manufacturing in the US and Europe followed weak growth data from South Korea. Reports showed that South Korea’s gross domestic product grew 2.7% year-over-year in the third quarter, down from a 3.3% gain in the prior three-month period. Besides, fall in oil prices overnight over disagreement within producer cartel OPEC on who should cut how much production in a planned coordinated reduction to prop up prices, too weighed on market sentiment. Hong Kong shares ended slightly lower as investors were cautious about the increasing possibility of a US interest rate increase in December, While Japanese stocks edged higher as a weaker yen lifted hopes that exporters' earnings will recover.

Back home, the local indices had started on a cautious note tracking sluggish cues from the Asian markets, which opened on a tepid note followed by weak growth data from South Korea, Asia's fourth-largest economy. The frontline indices kept losing steam thereafter and even drifted to the lowest point of the session in mid morning trades. The key indices failed to show any kind of fervor throughout the session due to lack of encouraging leads. Though the bourses recovered from the lows of the day, but could not succeed to end the trading session on positive territory. Finally, the NSE’s broadly followed index Nifty, took a cut of about around quarter percent to settle below the crucial 8700 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by over eighty points and closed below the psychological 28100 mark. On the BSE sectoral space, the information technology (IT) and FMCG pockets remained among top laggards in the space as they got lacerated by around a percent, while sectors like Capital Goods and Oil & Gas too got pounded heavily in the session. On the flipside, Consumer Durables and Banking pockets managed to go home with moderate gains of over quarter percent.

The market breadth remained pessimistic as there were 1344 shares on the gaining side against 1446 shares on the losing side, while 235 shares remained unchanged.

Finally, the BSE Sensex declined by 87.66 points or 0.31% to 28091.42, while the CNX Nifty dropped 17.65 points or 0.20% to 8,691.30. 

The BSE Sensex touched a high and a low of 28211.41 and 28013.69, respectively and there were 13 stocks on gainers side against 17 stocks on the losers side on the index. The broader indices made mixed closing; the BSE Mid cap index ended lower by 0.30%, while Small cap index was up by 0.13%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.46% and Bankex up by 0.25%, while IT down by 0.84%, FMCG down by 0.83%, TECK down by 0.56%, Capital Goods down by 0.53% and Oil & Gas down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 9.43%, Dr. Reddys Lab up by 3.59%, ICICI Bank up by 1.60%, Axis Bank up by 1.49% and Bharti Airtel up by 1.48%. On the flip side, Mahindra & Mahindra down by 2.72%, Tata Steel down by 2.51%, GAIL India down by 2.02%, Hindustan Unilever down by 2.00% and ONGC down by 1.30% were the top losers.

Meanwhile, the government is likely to impose anti-dumping duty on imports of certain flat steel products from countries including China and European Union, in a move to protect the domestic industry from cheap in-bound shipments.

The directorate general of antidumping and allied duties (DGAD) in its preliminary findings has recommended duty on imports of “colour coated / pre-painted flat products of alloy or non-alloy steel”. These steel products offers resistance to corrosion with barrier protection and it is used in many applications and sectors including construction, roofing, walling, paneling, cladding and decking, automotive, white goods, appliances and furniture.

The investigation was initiated on joint application for initiation of anti-dumping investigations by Essar Steel India and JSW Steel Coated Products. DGAD in its findings has also suggested that the duty should be the difference between the landed value of steel products and $849 per tonne. In its findings, DGAD has concluded that the product has been exported to India at below the normal value due to which the domestic industry has suffered material injury.

Imports of these steel products have drastically increased to 213,311 tonnes during the period of investigation (July- December 2015) from 60,771 tonnes in 2012-13. Government has already slapped anti-dumping duty on certain cold-rolled flat steel products from four nations, including China and South Korea.

The CNX Nifty traded in a range of 8,722.65 and 8,663.45. There were 20 stocks in green against 31 stocks in red on the index.

The top gainers on Nifty were Adani Ports &Special up by 8.75%, Dr. Reddys Lab up by 3.52%, Bharti Infratel up by 2.45%, Asian Paint up by 2.27% and ICICI Bank up by 2.02%. On the flip side, Tata Steel down by 2.65%, Mahindra & Mahindra down by 2.63%, Idea Cellular down by 2.08%, GAIL India down by 2.04% and Hindustan Unilever down by 1.99% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 26 points or 0.37% to 7,012.40, Germany’s DAX increased 32.92 points or 0.31% to 10,794.09 and France’s CAC increased 2.51 points or 0.06% to 4,555.09.

Asian stocks ended mostly in red on Tuesday as South Korean economic data disappointed. Reports showed that South Korea’s gross domestic product grew 2.7% year-over-year in the third quarter, down from a 3.3% gain in the prior three-month period. Further, falling oil prices overnight too weighed on market sentiment. Hong Kong shares ended slightly lower after mainland markets put up a lackluster performance and as investors were cautious about the increasing possibility of a US interest rate increase in December. While, Japanese stocks ended higher as a weaker yen lifted hopes that exporters' earnings will recover.