Indian markets end with over a percent cut

Wednesday’s session turned out to be a dreadful session for the Indian equity markets as the benchmark equity indices got bludgeoned by over a percent in the session. The wretchedness in the global markets got transmitted into the domestic frontline indices as a new poll showing Republican candidate Donald Trump leading the US presidential race spooked investors. Polls suggest a tight neck-to-neck race between the two candidates, following last week's news that the FBI had opened a new investigation into Clinton's private email server. Another cause for concern is crude oil prices, which declined for the fourth straight day on expectations that U.S. crude inventories were bolstered significantly last week. Crude oil price has always had a positive correlation with global equities. Investors are also cautious as the US Federal Reserve is due to announce its latest monetary policy decision later in the day. On the domestic front, sentiments were undermined by the report that foreign portfolio investors (FPIs) sold shares worth a net Rs 123.96 crore on November 01, 2016. Depreciation in rupee against dollar also weighed down sentiments. Indian rupee weakened by 9 paise to trade at 66.80 against the US dollar at the time of equity markets closing. Meanwhile, Standard & Poor’s affirmed India’s sovereign ratings, welcoming the country’s policy stability and improved monetary credibility, but ruled out any upgrade for this year or in 2017 because of weak public finances and low per capita income. The global rating agency has stuck to its rating of ‘BBB-’ with a ‘stable’ outlook, saying it would need to see more efforts to lower the country’s net general government debt level to below 60% of gross domestic product. The ratings agency also expressed concerns that government could delay subsidy cuts, while noting the country’s banking sector would likely need capital infusions of about $45 billion by 2019, or 2% of the country’s GDP, to meet global Basel III capital norms. Market participants also overlooked ASSOCHAM’s report that Indian economy is expected to fare better in the second half of the current fiscal backed by uptick in sales and improved capacity utilization, though fresh investments and new jobs creation may be a concern going forward.

Sentiments across the globe appeared gloomy as Asian markets exhibited dispiriting trends on Wednesday after Wall Street's 'fear index' spiked on jitters over the U.S. presidential elections. The tightening of the race between Hillary Clinton and Donald Trump for the White House, just days before the November 8 vote, has introduced a new element of uncertainty into financial markets. In Japan, financial and exporter stocks were hit particularly hard as investors digested what a win for Mr. Trump would mean for markets, given his dislike of many existing US trade agreements. Safe-haven buying was seen across assets, with the Japanese yen up 0.3% versus the dollar, the Swiss franc rising 0.2% against the US currency and spot gold gaining 0.4%. Meanwhile, European markets too mirrored similar trends with Germany’s DAX shrinking around a percent, being the top laggard. On the other hand, the screen trading for US index futures also indicated that the Dow could open on a pessimistic note.

Back home, the local benchmark got off to a gap down opening, in tandem with the somber sentiments prevailing in Asian markets. The frontline indices failed to show any kind of resilience thereafter and traded around the psychological 27,600 (Sensex) and 8,550 (Nifty) levels through the session. Finally the NSE’s 50-share broadly followed index Nifty, suffered a nasty hundred point laceration to settle below the crucial 8,550 support level, while Bombay Stock Exchange’s Sensitive Index Sensex got obliterated by over three hundred points and closed above the psychological 27,500 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with large cuts of around two percent. On the sectoral front, Oil & Gas, Realty and PSU witnessed brutal assaults as they got clobbered by 2.76%, 2.18% and 2.05% respectively. While counters like Banking and Teck too suffered severe pounding.

The market breadth remained pessimistic as there were 965 shares on the gaining side against 1967 shares on the losing side, while 110 shares remained unchanged.

Finally, the BSE Sensex declined by 349.39 points or 1.25% to 27527.22, while the CNX Nifty dropped 112.25 points or 1.30% to 8,514.00. 

The BSE Sensex touched a high and a low of 27679.32 and 27500.81, respectively and there were 4 stocks on gainers side against 26 stocks on the losers side on the index. The broader indices made a negative closing; the BSE Mid cap index ended lower by 1.84%, while Small cap index was up by 1.83%.

The top losing sectoral indices on the BSE were Oil & Gas down by 2.76%, Realty down by 2.18%, PSU down by 2.05%, Bankex down by 1.15% and TECK down by 1.14%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.54%, Hindustan Unilever up by 0.74%, NTPC up by 0.74% and Axis Bank up by 0.05%. On the flip side, ONGC down by 4.10%, Tata Motors down by 3.19%, SBI down by 2.75%, Sun Pharma down by 2.61% and Reliance Industries down by 2.31% were the top losers

Meanwhile, Department of Telecommunications (DoT) is planning to introduce second generation of telecom sector reforms soon which includes simplifying licenses, moving from the access spectrum space to backhaul spectrum space and electromagnetic field (EMF) portal.

Telecom Secretary J.S. Deepak has said that they are now looking at second generation reforms to help the citizens to test the level of radiation from mobile towers. He also said that in the last six to eight months there have been huge reforms in the spectrum space such as sharing and trading of airwaves.

Deepak has said that they have adopted a transparent system of allocation of spectrum. He also said that there is no longer an environment of spectrum insufficiency and so much spectrum is now available with their telcos that it can improve the quality of services, including mobile broadband. He added that sharing of passive infrastructure and lighter regulations with issuing of self certification are some of the other things.

He further said that there is need to improve voice and internet connectivity as a third of the country's population is still without voice connections as well as two-thirds of it unable to connect to internet because of issues of connectivity, digital literacy and absence of content in local languages.

The CNX Nifty traded in a range of 8,549.50 and 8,504.85. There were 6 stocks in green against 45 stocks in red on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.94%, Bharti Infratel up by 2.70%, Indusind Bank up by 1.30%, Hindustan Unilever up by 0.68% and NTPC up by 0.65%. On the flip side, ONGC down by 4.06%, Tata Motors - DVR down by 3.60%, Bank of Baroda down by 3.41%, BHEL down by 3.29% and Tata Motors down by 3.17% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 29.41 points or 0.43% to 6,887.73, Germany’s DAX decreased 81.32 points or 0.77% to 10,444.84 and France’s CAC decreased 29.5 points or 0.66% to 4,440.78.

Asian equity markets ended in red on Wednesday as the US presidential race appeared to tighten and investors awaited the Fed policy statement for clues on the timing of the next US rate hike. The Federal Reserve's policy-setting committee concludes its two-day policy meeting later today, although the US central bank isn't expected to lift its key rate ahead of the November 8 presidential election. New polls indicated an increasingly uncertain outcome for the presidential race after a FBI probe into Hillary Clinton's emails dented her lead over Republican rival Donald Trump. Tumbling oil prices and fresh demand for safe-haven assets such as the Japanese yen, the Swiss franc and gold also kept investors on edge. Chinese shares slid on worries about tightening liquidity ahead of the upcoming initial public offering (IPO) of Bank of Shanghai. Further, Japanese stocks hit a two-week low as the yen strengthened against the US dollar and survey figures from Cabinet Office showed Japan's consumer confidence weakened more than expected in October.