Benchmarks extend losing streak for third straight session

Extending losing streak for third straight day, Indian equity benchmarks ended the dismal day of trade with a cut of over half a percent on Wednesday. Sentiments remained downbeat since morning as markets after a negative start never looked confidant and extended their southward journey to end below their crucial 32,800 (Sensex) and 10,150 (Nifty) levels. Traders remained concerned with trade deficit widening to its highest in nearly three years in October, as export growth contracted for the first time after more than a year. The trade deficit widened to $14.02 billion last month from $8.98 billion in September. Merchandise exports for October fell 1.12 percent from a year earlier to $23.1 billion, dropping for the first time since August 2016. Market participants paid no heed on Central Board of Direct Taxes’ statement that it was not only confident that the Income Tax (IT) department would achieve Rs 9.80 lakh crore target of direct tax revenue collections for the financial year 2017-18, but that it would surpass it.

Traders failed to get any sense of relief with private report stating that the decision to lower goods and services tax (GST) rates on over 200 items could help pull down retail inflation by 20 basis points from the current levels driven by lower food and beverage prices. Investors also failed to get any solace with report that private equity (PE) investors announced transactions of $16.40 billion for January- October, a 55% jump over the year-ago period, driven by big-ticket deals. For October alone, the deal value read $1.6 billion. Besides, Finance Minister Arun Jaitley’s statement that India is set to become an ‘extremely attractive’ country to do business, with greater digitisation and formalisation of financial activities and businesses, failed to provide any respite to the equity markets.

Somber global cues too dampened sentiments with European counterparts making a gloomy start, as a fall in commodity stocks and continued profit taking sent the shares to an eight-week low. The number of people in work in Britain fell by the most in more than two years in the three months to September, a latest sign of weakness in Britain’s Brexit-bound economy. Asian markets ended in red terrain on Wednesday, as the cautious sentiments from the last session continued, with energy-related plays in the region falling on weakening oil prices.

Back home, realty sector stocks remained in focus with industry body Assocham stating that if the real estate sector is brought within the ambit of GST, it should be along with the stamp duty and moderate rate, and should not add to the cost of housing and construction. Meanwhile, ADAG companies like Reliance Communications (RCom), Reliance Home Finance, Reliance Infrastructure, Reliance Nippon Asset Management,   Reliance Power and Reliance Capital closed in red after RCom defaulted on Dollar bonds. Separately, the National Company Law Appellate Tribunal (NCLAT) issued a notice to RCom over a petition filed by Manipal Technologies seeking its due. State Bank of India (SBI) and Punjab National Bank (PNB) also closed in red as they have got maximum exposure of debt to RCom.

Finally, the BSE Sensex declined 181.43 points or 0.55% to 32,760.44, while the CNX Nifty was down by 68.55 points or 0.67% to 10,118.05.

The BSE Sensex touched a high and a low of 32,944.94 and 32,683.59, 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 dropped 1.01%, while Small cap index was down by 1.52%.

The top losing sectoral indices on the BSE were Metal down by 3.04%, Telecom down by 2.57%, Basic Materials down by 2.13%, Realty down by 1.76% and Utilities was down by 1.72%, while there were no gainers on the index.

The top gainers on the Sensex were Asian Paints up by 1.96%, Kotak Mahindra Bank up by 1.12%, Hero MotoCorp up by 0.72%, ICICI Bank up by 0.54% and Infosys up by 0.26%. On the flip side, Sun Pharma down by 4.01%, ONGC down by 2.55%, Bharti Airtel down by 2.08%, Lupin down by 1.50% and ITC down by 1.46% were the top losers.

Meanwhile, retreating from a six-month high growth in September, India’s merchandise exports stood at $23098.18 million, down by 1.12 percent in month of October 2017, primarily due to a decline in shipments of products like textiles, pharmaceuticals and leather. Also, trade deficit widened to $14018.83 million during the month under review as against $11134.48 million in October 2016, the highest in nearly three years and mainly because export growth contracted for the first time after more than a year.

As per the data released by the Commerce Ministry, exports declined by 1.12% to $23098.18 million in October 2017, as compared to $23360.61 million in the same month a year ago. In Rupee terms it was down by 3.59 % to Rs 150325.95 crore in October 2017, as compared to Rs 155926.73 crore during October 2016. Cumulative value of exports for the period April- October 2017-18 was $170286.55 million as against $155344.40 million, registering a positive growth of 9.62 % over the same period last year. In Rupee terms it was up by 5.63 % to Rs 1097858.68 crore from Rs 1039297.59 crore. 

Non-petroleum and Non Gems & Jewellery exports in October 2017 were valued at $16604.63 million against $16202.27 million in October 2016, an increase of 2.48 %. Non-petroleum and Non Gems and Jewellery exports during April-October 2017-18 were valued at $124281.02 million as compared to $111556.32 million for the corresponding period in 2016-17, an increase of 11.41%.

Imports during October 2017, increased by 7.60 % to $37117.01 million as compared to $34495.09 million in October 2016, while in rupee terms it was up by 4.91 % to Rs 241562.31 crore from Rs 230246.81 crore in October 2016. Cumulative value of imports for the period April- October 2017-18 was $256434.21 million as against $209834.98 million, registering a positive growth of 22.21 % over the same period last year. In rupee terms the cumulative imports was Rs 1653435.01 crore, up by 17.77 % from Rs 1403911.51 crore in the same period last year.

Oil imports during October, 2017 were valued at $9286.74 million which was 27.89 % higher than oil imports valued at $7261.23 million in October 2016. Oil imports during April- October, 2017-18 were valued at $56252.00 million which was 20.23% higher than the oil imports of $46788.46 million in the corresponding period last year. Non-oil imports during October, 2017 were estimated at $27830.27 million which was 2.19 % higher than non-oil imports of $27233.86 million in October, 2016. Non-oil imports during April- October 2017-18 were valued at $200182.20 million which was 22.78 % higher than the level of such imports valued at $163046.52 million in April- October, 2016-17.

The CNX Nifty traded in a range of 10,175.45 and 10,094.00. There were 13 stocks in green as against 37 stocks in red on the index.

The top gainers on Nifty were BPCL up by 2.83%, Asian Paints up by 2.42%, Ambuja Cement up by 2.27%, Tech Mahindra up by 1.66% and Eicher Motors up by 1.46%. On the flip side, Bharti Infratel down by 4.17%, Sun Pharma down by 4.09%, Vedanta down by 4.03%, UPL down by 2.89% and Hindalco down by 2.82% were the top losers.

European markets were trading in red; Germany’s DAX declined 166.97 points or 1.28% to 12,866.51, UK’s FTSE 100 shed 42.68 points or 0.58% to 7,371.74 and France’s CAC was down by 29.37 points or 0.55% to 5,286.21.

Asian equity markets ended lower on Wednesday as commodities declined on concerns over slowing growth in China and uncertainty prevailed over the fate of a US tax reform bill. Japanese shares ended lower as the yen surged broadly and economic data on industrial output and GDP painted a mixed picture of the economy. While Japan's industrial output declined less than initially estimated in September, GDP grew 0.3 percent sequentially in the third quarter of 2017, shy of expectations for a 0.4 percent gain and down from 0.6 percent in the second quarter, separate reports showed. Further, Chinese shares extended their losses, hurt by resources shares amid signs of a slowdown in industrial production as the nation’s economy enters a period of moderating growth.