Bears tighten grip on markets; Sensex falls more than 250 points

Bears tightened their grip on Dalal Street in late morning session, as selling pressure continued in Energy, Banking and Oil & Gas stocks. Investors remained on sidelines ahead of September quarter GDP data that will be announced later in the day. Sentiments remained pessimistic with the private report stating that a prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors. The report also noted that all good things must come to an end and there will be a bear market, eventually. Traders paid no heed towards the report that India has moved up one place to the 68th spot on the Global Entrepreneurship Index of 2018, which is topped by the US.

On the global front, Asian markets were trading mostly in red, reflecting weakness in tech stocks following the overnight pullback by the tech-heavy Nasdaq. Meanwhile, data showing that China's official manufacturing PMI for November topped expectations, failed to boost investors’ sentiments. Back home, in scrip specific development, ITI traded higher after the company entered into Memorandum of Understanding (MoU) with the Centre for Development of Advanced Computing (C-DAC), to collaborate in the area of Internet of Things (IoT).

The BSE Sensex is currently trading at 33335.39, down by 267.37 points or 0.80% after trading in a range of 33330.14 and 33576.20. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.18%, while Small cap index was up by 0.03%.

The only gaining sectoral indices on the BSE were Realty up by 0.06% and Telecom up by 0.02%, while Energy down by 1.05%, Bankex down by 0.95%, PSU down by 0.66%, Oil & Gas down by 0.58% and Power down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 0.80%, Dr. Reddy’s Lab up by 0.54%, Infosys up by 0.33% and Wipro up by 0.32%. On the flip side, Kotak Mahindra Bank down by 1.70%, Mahindra & Mahindra down by 1.67%, Cipla down by 1.59%, Reliance Industries down by 1.49% and SBI down by 1.46% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Arvind Subramanian has said that the series of reforms initiated by the government like demonetisation and the goods and services tax (GST) may have reinforced the growth deceleration that had already set in. Apart from the growth, he observed that investment, credit, exports and industrial production have also started decelerating sometime in the second quarter previous year. Therefore, he said that they will soon come out from these two policy experiments and get back to the growth path. 

Subramanian further said that India’s GDP will bounce back with better credit growth, investment growth and growth in exports, as the country’s economy has the potential to grow between 8 to 10 percent and as new tax regime is also stabilizing. He said “I think that we still need to work more to reduce the compliance burden on SMEs. And these are being worked upon. It’s an ongoing process.”  On the matter of bringing petrol and diesel under the purview of GST, he noted that ideally everything should come under the new tax regime and also feels that it is absolutely desirable objective that all that has been left out today should at some point come under GST.

Talking on the jobless growth in India, CEA has indicated that three key job generating sectors are under stress. However, he said that there is not enough employment data to make sincere assessment.  Besides, he said that Niti Aayog has come up with a new method of collecting that data and once that happens, they will be in much better position to make an assessment. Moreover, he observed that in the boom period, three sectors did well--agriculture, IT and construction and these were big job generators. Adding further, he pointed out that in current environment, IT is under stress for bunch of reasons and added that same is the case with the other two sectors. Therefore, he stressed that these sectors have to improve for job creation to pick up.

The CNX Nifty is currently trading at 10279.95, down by 81.35 points or 0.79% after trading in a range of 10276.50 and 10332.70. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Bosch up by 2.56%, Indiabulls Housing Finance up by 0.95%, GAIL India up by 0.85%, Bajaj Auto up by 0.76% and Bharti Infratel up by 0.72%. On the flip side, Mahindra & Mahindra down by 1.96%, Reliance Industries down by 1.60%, Ultratech Cement down by 1.57%, SBI down by 1.55% and Cipla down by 1.54% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 383.48 points or 1.29% to 29,240.35, Taiwan Weighted decreased 153.11 points or 1.43% to 10,560.44, KOSPI Index decreased 31.63 points or 1.26% to 2,481.27, Jakarta Composite decreased 17.31 points or 0.29% to 6,044.06 and Shanghai Composite decreased 11.04 points or 0.33% to 3,326.82.

On the flip side, FTSE Bursa Malaysia KLCI increased 0.18 points or 0.01% to 1,720.56 and Nikkei 225 increased 128.99 points or 0.57% to 22,726.19.