Markets witness Bloodbath; Nifty breaches 10,200 mark

Indian equity benchmarks witnessed massacre on Friday with frontline gauges tumbling below their crucial 10,200 (Nifty) and 33,200 (Sensex) levels, as global markets turned defensive on concerns over the US investigation into the Trump Organization and renewed worries that US tariffs could hurt the global economy. Domestic markets started the session on pessimistic note and continued their southward movement to end near intraday lows, as sentiments remained dampened on report that India’s trade deficit for February 2018 was estimated at $11,979.21 million, 25.8% higher than the $9,521.73-million deficit reported during February 2017. Exports from the country rose 4.48% in dollar terms during February this year compared to the same month of the last fiscal. But, in rupee terms, export growth was flat with a mere 0.27% rise, reflecting a dip in value of the Indian currency. Imports rose during the month under consideration and were 10.41% higher (in dollar terms).

Selling got intensified in second half of the session amid political upheaval after the Telugu Desam Party (TDP) formally decided to quit the NDA government. The Telugu Desam Party (TDP) on Friday formally decided to quit the NDA, days after two of its ministers quit the Narendra Modi government protesting for Special Category Status to Andhra Pradesh. The party will also move a no-confidence motion against the Modi government over the injustice meted out to the state. Traders failed to get any sense of relief with IMF’s statement that India should see its growth picking up this year after two transitory shocks - the demonetisation and the GST - while China’s growth is likely to fall gradually. In its G-20 Surveillance Note Global Prospects and Policy Challenges ahead of the G-20 Finance Ministers meeting in Argentina next week, the International Monetary Fund said that globally growth is expected to revert to a weaker trend.

On the global front, European markets were trading mostly in green in early deals despite ratings agency Moody’s said Britain’s government might struggle to make the kind of cuts to public spending it has announced to keep on narrowing its budget deficit. Asian markets ended mostly in red, as report of more chaos in the Trump administration tested investors’ nerves, already frayed by fears that US tariffs could hurt the global economy and trigger a trade war. Political uncertainties are mounting in Japan, where Prime Minister Shinzo Abe is under pressure for suspicions of a cover-up in a controversial land sale.

Back home, some concerns came with the Federation of Indian Export Organisations’ (FIEO) statement that the US’ decision to challenge Indian export subsidy schemes at World Trade Organisation (WTO) is an area of grave concern for domestic traders and the government should phase out these incentives. Meanwhile, traders also remained cautious with World Bank observing the Goods and Services Tax (GST) regime in India, to be relatively more complex compared with similar taxes on value added across other countries. The complexity of India’s GST, it said in a report, was due to higher tax rates and large number of tax slabs compared with similar systems in other countries.

Finally, the BSE Sensex tumbled 509.54 points or 1.51% to 33,176.00, while the CNX Nifty was down by 165.00 points or 1.59% to 10,195.15.

The BSE Sensex touched a high and a low of 33,691.32 and 33,119.92, respectively and there were 4 stocks on gaining side as against 27 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index declined 1.07%, while Small cap index was down by 1.00%.

The top losing sectoral indices on the BSE were Metal down by 2.30%, Oil & Gas down by 2.09%, Energy down by 1.97%, PSU down by 1.87% and Power was down by 1.69%, while there were no losers on the BSE sectoral front.

The few gainers on the Sensex were Mahindra & Mahindra up by 0.88%, Wipro up by 0.85%, Hindustan Unilever up by 0.51% and Yes Bank up by 0.16%. On the flip side, Coal India down by 5.69%, Tata Motors down by 3.67%, Tata Motors - DVR down by 3.21%, Asian Paints down by 3.09% and Adani Ports & SEZ down by 2.89% were the top losers.

Meanwhile, the Public Debt (excluding liabilities under the Public Account) of the central government increased to Rs 66.61 lakh crore in the October-December quarter (Q3FY18), up by 1.22% over the previous quarter. According to the report on debt management released by the finance ministry, the government’s debt was Rs 65.80 lakh crore at the end of the previous quarter of the fiscal ended September. It noted that internal debt constituted 93.1% of public debt as of December 2017, while marketable securities accounted for 82.6%.

As per the report, during the third quarter, the government issued dated securities worth Rs 1,64,000 crore, lower than Rs 1,89,000 crore in the second quarter of fiscal 2016-17, thus leading to cumulative issuance of Rs 5,21,000 crore (87.0% of 2017-18 RE) among others. Besides, it highlighted that the weighted average maturity (WAM) and weighted average yield (WAY) of dated securities issued during Q3 of FY18 was 14.09 years and 7.04%, respectively.

The report further pointed out that the liquidity conditions in the economy remained comfortable and continue to be in surplus mode during the quarter. It noted that the cash position of the government during the third quarter was also comfortable and as a result the government did not resort to WMA from the Reserve Bank of India (RBI). It added that the trading volume of government securities on an outright basis during the Q3 FY18, also witnessed a decline of 21.6% over the previous quarter.

The CNX Nifty traded in a range of 10,346.30 and 10,180.25. There were 9 stocks in green as against 41 stocks in red on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 0.99%, Yes Bank up by 0.85%, HUL up by 0.77%, Wipro up by 0.55% and Tech Mahindra up by 0.47%. On the flip side, Indian Oil Corporation down by 4.22%, Tata Motors down by 3.85%, Ultratech Cement down by 3.55%, BPCL down by 3.43% and Asian Paints down by 3.42% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 rose 5.96 points or 0.08% to 7,145.72 and Germany’s DAX increased 37.81 points or 0.31% to 12,383.37, while France’s CAC was down by 3.83 points or 0.07% to 5,263.43.

Asian markets closed mostly in red on Friday as trade-war worries persisted and reports suggested that special counsel Robert Mueller has subpoenaed US President Donald Trump's businesses, adding to the sense of continued political uncertainty in the US. Meanwhile, the White House denied reports that Trump has decided to remove White House national security adviser H.R. McMaster from the administration. Japanese shares closed lower, hurt by a firmer yen as investors fretted about US political uncertainty and official data showed Japan's industrial production declined more than initially estimated in January. Also, Chinese and Hong Kong stocks fell on concerns over the increasingly protectionist policies of the Donald Trump government.