Benchmarks extend losses in the late afternoon session

Indian equity markets extended losses and were hovering near the lowest point of the day in the late afternoon session on account of selling in frontline blue chip counters. Sentiment remained weak, as participants indulged in cutting their bets, tracking a falling trend in global markets ahead of next week's US president election outcome. Weak opening in European markets too weighed on sentiments, as investors await the all-important U.S. jobs report, which is one of the last key economic measures before voters elect the next U.S. president. Back home, most of the sectoral indices were trading in negative territory with metal losing the most, down by almost three percent. Pharma stocks came under pressure with the report of the criminal probe carried out by the US Department of Justice that investigates price collusion charges.

The BSE Sensex is currently trading at 27260.29, down by 169.99 points or 0.62% after trading in a range of 27240.63 and 27498.91. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.39%, while Small cap index was down by 2.29%.

The top gaining sectoral indices on the BSE were FMCG up by 1.74% and IT up by 0.01%, while Metal down by 2.76%, Realty down by 2.43%, Consumer Durables down by 2.15%, Capital Goods down by 1.68% and PSU down by 1.61% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.18%, Axis Bank up by 1.09%, Hindustan Unilever up by 0.98%, Mahindra & Mahindra up by 0.91% and Asian Paints up by 0.89%. On the flip side, Sun Pharma down by 6.33%, Dr. Reddys Lab down by 6.20%, Lupin down by 4.45%, Coal India down by 4.18% and Hero MotoCorp down by 3.60% were the top losers.

Meanwhile, in view of India's low rankings in global ease of doing business, the rating agency, CRISIL in its latest report said that India needs to focus on domestic market to boost manufacturing and have do a lot more to encourage this high-employment sector. The rating agency said that India can nurture growth in its manufacturing sector only if it strikes a balance between export-led and domestic demand-led growth. And that will require relentless efforts on improving the competitiveness of the country’ manufacturing sector.

The report said that manufacturing sector cannot be competitive in face of difficulties like inadequate physical infrastructure (reliable power and water), inflexible labour laws and an ‘opaque’ land acquisition system. It further said that even after the goods are produced, they face problems because of the inefficiencies in the system like logistical bottlenecks which results in higher costs. It added that the government will also have to ensure purchasing power across all sections for pushing the domestic consumption as well.

Further, CRISIL said that policy measures that ensure distribution of income growth to all sections will sustain domestic demand-led growth. This need not be achieved by merely subsiding the poor, but also by empowering them to participate in the growth process. It said that the maximum possible growth for manufacturing sector can only be realized if it strikes a balance between export-led and domestic-demand led growth. Stating that China is ceding space in the low-end manufacturing, rating agency said the country can target this segment but is lagging behind both Vietnam and Bangladesh in the race.

The CNX Nifty is currently trading at 8411.25, down by 73.70 points or 0.87% after trading in a range of 8409.75 and 8504.00. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were ITC up by 4.24%, HCL Tech up by 3.01%, Axis Bank up by 1.04%, Hindustan Unilever up by 1.02% and Asian Paints up by 0.81%. On the flip side, Sun Pharma down by 6.37%, Aurobindo Pharma down by 5.67%, Dr. Reddys Lab down by 5.53%, Bharti Infratel down by 5.11% and Coal India down by 4.43% were the top losers.

Asian market were trading mostly in red; Nikkei 225 decreased 229.32 points or 1.34% to 16,905.36, Hang Seng was down by 40.89 points or 0.18% to 22,642.62, Shanghai Composite dropped 3.62 points or 0.12% to 3,125.32, KOSPI Index declined 1.78 points or 0.09% to 1,982.02 and FTSE Bursa Malaysia KLCI decreased 0.72 points or 0.04% to 1,647.36. On the other hand, Taiwan Weighted was up by 0.88 points or 0.01% to 9,068.15 and Jakarta Composite increased 6.51 points or 0.12% to 5,336.01.

European markets were trading in red; Germany’s DAX decreased 64.9 points or 0.63% to 10,260.98, UK’s FTSE 100 declined 59.84 points or 0.88% to 6,730.67 and France’s CAC dropped 22.53 points or 0.51% to 4,389.15.