Benchmarks add losses; Nifty slips below 8150 mark

Indian bourses adding losses, continued to trade in red in the noon session, with the Sensex losing over 450 points and Nifty falling below the 8150 level, weighed down by continued foreign fund outflows and weakness in emerging market currencies against the dollar since Donald Trump’s unexpected win in the US presidential election on November 8, 2016. FPIs have already sold Rs 3,175 crore worth of domestic stocks this month following a Rs 4,306 crore worth of selloff in the previous month. Besides, the rupee breaching the 67-mark against the US dollar by plunging 40 paise to 67.65 at the forex market too had its bearing. A weak rupee does not auger well for foreign inflows, as any depreciation in local currency eats into profits of foreign investors when they redeem their investments. Furthermore, muted second quarterly earnings posted by some more bluechip companies as well as poor growth in factory output, accelerated selling activity in the local markets. The industrial production (IIP) data was announced after market hours on November 11, showed that Industrial production grew a meagre 0.7 per cent in September mainly due to poor show by manufacturing and mining sectors coupled with decline in capital goods output.

Sentiments remained down-beat with many agencies criticizing the government over demonetisation of Rs 500 and Rs 1,000 notes, saying the move has led to 'financial chaos' across the country as well as condemning that the decision was taken without proper planning or preparation. Also, the sudden decline in money supply and simultaneous rise in bank deposits post demonetisation is going to adversely impact consumption in the economy in the short term and may lead to a lower GDP growth.  Meanwhile, investors failed to get any sense of relief with the Commerce and Industry Minister Nirmala Sitharaman’s statement that export growth of 4.62% in September was a very significant development, bringing hope to exporters who are battling depressed demand globally. Arresting 2-month fall, exports grew to $22.9 billion in September riding on the sectors such as engineering and gems & jewellery. 

On the global front, Asian markets were trading mixed on Tuesday amid rising fears of a rate hike by the US Federal Reserve. Investors braced for higher inflation in the US amid expectations of fiscally expansionary polices under Donald Trump’s presidency. The risks of faster-than-expected Federal Reserve rate increases have dragged on emerging market assets, particularly equities and currencies, which have benefited from large capital inflows. Japanese shares edged down in choppy trade as investors took profits from sharp gains in the past few days that were driven by hopes that Donald Trump's economic policies would favour Japanese exports by strengthening the dollar. On Wall Street, U.S. stocks consolidated recent gains with the Dow ending at a record high on Monday.

Back home, sectors like Consumer Durables, Realty and Automobile witnessed brutal assaults as they got clobbered by 6.76%, 5.27% and 4.46% respectively. While counters like Metal and oil & gas too suffered severe pounding. In scrip specific development, Videocon Industries has slipped after the company reported a net loss of Rs 381.93 crore for the quarter ended September 30, 2016, as against net profit Rs 7.57 crore for the same quarter in the previous year. On the other hand, Corporation Bank has rallied after the Bank reported 9.37% rise in its net profit at Rs 206.28 crore for the quarter ended September 30, 2016 as compared to Rs 188.60 crore for the same quarter in the previous year.

The market breadth remained pessimistic as there were 260 shares on the gaining side against 2165 shares on the losing side, while 93shares remained unchanged.

The BSE Sensex is currently trading at 26365.35, down by 453.47 points or 1.69% after trading in a range of 26321.01 and 26809.61. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 4.28%, while Small cap index was down by 5.00%.

The top losing sectoral indices on the BSE were Consumer Durables down by 6.76%, Realty down by 5.27%, Auto down by 4.46%, Metal down by 3.61% and Oil & Gas down by 2.73%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were Wipro up by 1.37%, ITC up by 0.93%, Power Grid up by 0.90%, SBI up by 0.81% and Dr. Reddys Lab up by 0.75%. On the flip side, Asian Paints down by 7.80%, Tata Motors down by 7.77%, Tata Steel down by 6.65%, Adani Ports &Special down by 5.66% and Maruti Suzuki down by 4.81% were the top losers.

Meanwhile, CBEC Chairman Najib Shah has said that the government will share the model GST law with the states, which has been redrafted after taking into account the comments of stakeholders. He further said that the Compensation law will also be shared with the states on November 16 detailing the procedure for making good revenue loss of states in the first five years of GST rollout.

The Centre and states have already decided on a four-tier GST rates-- 5, 12, 18 and 28 percent-- but is yet to decide on the issue of cross empowerment to avoid dual control. Differences arose with the states demanding control over 11 lakh service tax assessees, and the Centre proposing to do away with the states having exclusive control over all dealers up to an annual revenue threshold of Rs 1.5 crore -- an issue which was settled in the first meeting of the GST Council.

The Council has came up with two proposals -- horizontal division and vertical division options, 'Horizontal division' would mean taxpayers would be divided both for administrative and audit purposes based on a cut off turnover. Those with a turnover over Rs 1.5 crore would be administered both by the Centre and states, while those with below Rs 1.5 crore would be administered solely by the states. While, under the 'vertical division', taxpayers could be divided in a ratio which would balance the interest of the Centre and the state, both with respect to revenue and spread of numbers.

The CNX Nifty is currently trading at 8138.60, down by 157.70 points or 1.90% after trading in a range of 8125.60 and 8288.55. There were 9 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 4.27%, Hindalco up by 1.57%, Power Grid up by 1.01%, Dr. Reddys Lab up by 1.00% and Wipro up by 0.96%. On the flip side, Tata Motors - DVR down by 8.35%, Asian Paints down by 7.89%, Tata Motors down by 7.80%, Grasim Industries down by 7.55% and Tata Steel down by 6.62% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 0.95%, Taiwan Weighted gained 0.05%, Jakarta Composite jumped 0.89% and Hang Seng was up by 0.42%. On the other hand, Nikkei 225 declined 0.08%, Shanghai Composite decreased 0.29% and KOSPI Index was down by 0.24%.