Benchmarks end near intraday lows; Nifty breaches 10,250 mark

Indian equity benchmarks started the new week on pessimistic note with frontline gauges ending near intraday low levels, breaching their crucial 10,250 (Nifty) and 33,100 (Sensex) levels, as traders stayed away of risky assets, keeping an eye on the ongoing tensions in the West Asia. Soon after a positive start markets entered into red terrain, as traders reacted negatively to industrial output growth data which fell to 3.8% during the month of September from a revised 4.5% rise in August. The slowdown was mainly due to subdued performance of the manufacturing sector, coupled with contraction in output of consumer durables. Manufacturing sector, which accounts for more than three-fourths of the entire index, slowed to 3.4% in September, from 5.8% in the same month previous year. Afterwards markets never looked confidant and extended their southward journey to at day’s lows.

Sentiments remained dampened on reports that investments in the Indian capital market through participatory notes (P-notes) plunged to an over eight-year low of Rs 1.23 lakh crore at September-end in view of stringent norms put in place by regulator Securities and Exchange Board of India (SEBI). According to SEBI data, the total value of P-notes investments in Indian markets - equity, debt and derivatives - slumped to Rs 1,22,684 crore at September-end after hitting seven-and-a-half year low of Rs 1,25,037 crore at the end of August. Traders failed to get any sense of relief with report that foreign investors have pumped in a staggering $1.5 billion in the Indian equity markets this month during November 1-10, propelled by the government’s Rs 2.11 lakh crore bank recapitalisation plan. This follows a net inflow of over Rs 3,000 crore in stock markets last month. Prior to that, FPIs had pulled out more than Rs 24,000 crore in the past two months (August and September).

Weakness in European counters too dampened sentiments, as investors focused on a fresh batch of earnings reports, ongoing concerns over Brexit negotiations and US tax reform plans. Investors also remained cautious following reports over the weekend that 40 Conservative members of the UK parliament agreed to sign a letter of no-confidence in Prime Minister Theresa May. Asian markets ended mostly in red, as investors look to see whether US Republicans can hammer a tax reform deal quickly, while the British pound fell on growing doubts over Prime Minister Theresa May’s leadership.

Back home, traders remained on sidelines ahead of CPI inflation data to be released later today. Weak quarterly earnings of L&T, Coal India and Idea Cellular for second quarter of FY18 also dragged the indices down. On the sectoral front, IT stocks remained on buyers’ radar, as Gartner highlighted in its report that IT spending in Indian banking and securities firms is expected to grow by 11.7% to reach $9.1 billion this year, driven by investments in digital payments infrastructure. Select public sector banking stocks ended in green, as Finance Minister Arun Jaitley said that the government has decided to inject more capital into state-owned banks to strengthen the banking system and spur economic growth. However, steel stocks ended mixed with report that export of total finished steel saw an annual jump of 45% to 0.778 million tonnes during October 2017. The overall exports of finished steel stood at 0.537 million tonnes in the same month last year.

Finally, the BSE Sensex declined 281.00 points or 0.84% to 33,033.56, while the CNX Nifty was down by 96.80 points or 0.94% to 10,224.95.

The BSE Sensex touched a high and a low of 33,417.30 and 32,999.98, respectively and there were 6 stocks on gaining side as against 25 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index slipped 0.19%, while Small cap index was down by 0.41%.

The lone gaining sectoral index on the BSE was IT up by 0.18%, while Telecom down by 1.94%, Metal down by 1.84%, Consumer Durables down by 1.76%, Capital Goods down by 1.55% and Realty was down by 1.50% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.13%, Mahindra & Mahindra up by 1.27%, Sun Pharma up by 0.99%, Kotak Mahindra Bank up by 0.24% and Power Grid Corporation up by 0.24%. On the flip side, Adani Ports & SEZ down by 4.11%, ONGC down by 3.41%, Coal India down by 3.00%, HDFC down by 2.15% and Larsen & Toubro down by 1.87% were the top losers.

Meanwhile, India's overall exports of finished steel, jumped by 45 percent to 0.778 Million Tonne (MT) in October 2017, as compared to 0.537 MT in the same month last year. According to the report by Joint Plant Committee (JPC), which collects data on iron and steel industry in the country, during April- October 2017, export of total finished steel was up by 57.7 percent at 5.626 MT over the same period last year. However, the report pointed out that, on a monthly basis, export in October 2017 was 30 percent lower than 1.115 MT in September this year.

The report also stated that the import of finished steel also surged by 11.5 percent at 0.600 MT in October 2017 compared to 0.538 MT in the same month last year. It noted that import of total finished steel at 4.916 MT in April- October 2017 was up by 18.9 percent over the same period of last year. However, on a month-on-month basis, the overall import in October this year was down by 25.7 percent over September 2017. Besides, it mentioned that India remained a net exporter of total finished steel last month and during April-October 2017. 

As per the report, the consumption of total finished steel grew 5.5 percent to 7.486 MT in October 2017 over 7.093 MT in October last year. It noted that on a month-on-month basis, the consumption in October was up by 1 percent over September this year. It also showed that during April- October 2017, the consumption of total finished steel in India rose by 4.5 percent to 50.337 MT over the same period of last year, under the influence of rising production for sale and imports. India is the world's third largest producer of crude steel after China and Japan. The country is now aiming to grab the second spot.

The CNX Nifty traded in a range of 10,334.15 and 10,216.25. There were 13 stocks in green as against 37 stocks in red on the index.

The top gainers on Nifty were TCS up by 1.76%, Mahindra & Mahindra up by 1.30%, Sun Pharma up by 1.14%, UPL up by 0.67% and HPCL was up by 0.37%. On the flip side, Adani Ports & SEZ down by 4.49%, Aurobindo Pharma down by 4.32%, ONGC down by 3.58%, Coal India down by 3.52% and Bharti Infratel was down by 3.22% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 13 points or 0.24% to 5,367.72 and Germany’s DAX was down by 12.29 points or 0.09% to 13,115.18, while, UK’s FTSE 100 was up by 16.53 points or 0.22% to 7,449.52.

Asian equity markets ended mostly lower on Monday as investors awaited a slew of data from China, Japan and Australia this week for directional cues. Concerns about political instability in the UK and Saudi Arabia also weighed on markets. The pound came under selling pressure after a report that 40 Conservative members of Parliament intend to sign a letter of no-confidence in British Prime Minister Theresa May. Japanese shares fell sharply to end near two-week low, with realty and technology stocks pacing the decliners after recent rallies. Meanwhile, Chinese shares ended higher, powered by banking firms, as investors cheered Beijing’s deregulation in the financial sector, mitigating wider concerns about higher corporate borrowing costs as bond yields rose.