Markets at Day’s low reacting to weak IIP data

Continuing their southward journey, key Indian benchmarks reached at the intraday lows in late morning session amid mixed Asian markets along with selling pressure at Capital Goods and Realty counters. Sentiments remained downbeat as India’s Industrial production growth slowed down to 3.8% in the month of September 2017, as against 5.7% in September 2016, due to subdued performance of the manufacturing sector, coupled with contraction in output of consumer durables. Some concerns also came with the reports that investments in the Indian capital market through participatory notes plunged to an over eight-year low of Rs1.23 lakh crore at September-end in view of stringent norms put in place by the Securities and Exchange Board of India. Besides, broader indices following the larger peers too have fallen, but losses were marginal in the range of 0.04%-0.18%.  On the sectoral front, PSU banking stocks were trading higher taking support from Finance Minister Arun Jaitley’s statement that the government has decided to inject more capital in state-owned banks to strengthen the banking system and spur economic growth.

On the global front, Asian markets were trading mixed following Wall Street, as investors looked ahead to a week of data releases and public comments by central bankers. Back home, in scrip specific development, Hindustan Copper (HCL) gained after the company obtained approval from its board of directors to form a joint venture (JV) company with Mineral Exploration Corporation (MECL) and NALCO.

The BSE Sensex is currently trading at 33186.10, down by 128.46 points or 0.39% after trading in a range of 33165.49 and 33417.30. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.18%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were IT up by 0.61%, TECK up by 0.35%, Bankex up by 0.24%, Consumer Disc up by 0.19% and Auto up by 0.13%, while Capital Goods down by 1.87%, Realty down by 1.72%, Oil & Gas down by 1.67%, Energy down by 1.24% and Metal down by 1.07% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.27%, SBI up by 1.82%, TCS up by 1.73%, Axis Bank up by 1.70% and Hindustan Unilever up by 0.69%. On the flip side, Larsen & Toubro down by 2.91%, Coal India down by 2.63%, ONGC down by 2.31%, HDFC down by 1.76% and Cipla down by 1.72% were the top losers.

Meanwhile, after recent announcement of staggering Rs 2.11 lakh crore two-year road map to bolster NPA-hit public sector banks, which includes recapitalisation bonds, budgetary support and equity dilution, the public sector banks have got another boost with Finance Minister Arun Jaitley stating that the government has decided to inject more capital in state-owned banks to strengthen the banking system and spur economic growth.

Finance Minister Arun Jaitley addressing heads of state-owned banks at 'PSB Manthan', said the government has decided to put in more capital from the Budget, through bonds and banks' equity expansion and 'therefore, it is the country which is virtually going to pay to keep the banking system in good health'.

Jaitley pointed that one of the focus areas banks have taken up is to support MSMEs in the first instance because the sector creating jobs and giving boost to the economy has no access to international finance or bond market. He also assured the bankers gathered at ‘PSB Manthan’ that “you won’t find us interfering” in commercial transactions, but “when the system is making all these changes and all these monetary contributions in order to strengthen the banking system, we want robust public sector banking system so that your ability to support growth itself increases” and added that a robust public sector banking system will have an increased ability to support economic growth.

The CNX Nifty is currently trading at 10269.35, down by 52.40 points or 0.51% after trading in a range of 10262.30 and 10334.15. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.10%, SBI up by 1.78%, Axis Bank up by 1.63%, Tech Mahindra up by 1.42% and TCS up by 1.40%. On the flip side, Aurobindo Pharma down by 2.99%, Larsen & Toubro down by 2.89%, BPCL down by 2.72%, Coal India down by 2.64% and ONGC down by 2.43% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI was up by 2.56 points or 0.15% to 1,744.84, Shanghai Composite rose 11.01 points or 0.32% to 3,443.69, Jakarta Composite increased 17.81 points or 0.3% to 6,039.64 and Hang Seng surged 87.98 points or 0.3% to 29,208.90. On the flip side, Nikkei 225 decreased 142.06 points or 0.63% to 22,539.36, Taiwan Weighted was down by 48.75 points or 0.45% to 10,683.92 and KOSPI Index fell 10.44 points or 0.41% to 2,532.51.