Benchmarks witness massacre; Nifty breaches 11K mark

Extending losing streak for fifth straight session, Indian equity benchmarks witnessed bloodbath on Monday, with frontline gauges ending below their crucial 36,400 (Sensex) and 11,000 (Nifty) levels. Markets started the session on cautious note and never looked in recovery mood to end near intraday low levels. Sentiments remained dampened since beginning of the trade on industry chamber CII’s report that over 40 per cent of Indian firms expect the Reserve Bank of India (RBI) will go in for another interest rate hike in the current fiscal. A CII release said that its quarterly Business Confidence Index (BCI), conducted during July-September 2018, covered nearly 200 firms of varying sizes. In the current survey, about 42 per cent of the respondents felt that the RBI will engage in further interest rates hikes in 2018-19 as compared to the previous survey where a majority of the respondents anticipated a cut or no change in policy rates in 2018-19. Traders remain concerned with report that overseas investors have pulled out a massive Rs 15,365 crore from the capital markets till September 21, after putting in funds during the previous two months, on widening current account deficit coupled with global trade tensions.

Markets extended southward journey in second half to end near intraday lows, as traders remain with Moody's Investors Service’s latest report stating that the government’s measures to boost capital inflow in to the country is unlikely to reverse the rupee depreciation. Moody's further noted that steps to reduce non-essential goods import may provide support to contain the imports bill, but will likely have a lagged effect. Traders failed to get any sense of relief with report that Fitch Ratings has raised India’s growth forecast for the current fiscal to 7.8 percent, from 7.4 percent projected earlier. In its Global Economic Outlook, Fitch, however, flagged tightening of financial conditions, rising oil bill and weak bank balance sheets as headwinds to growth. Traders shrugged off report that the southwest monsoon is expected to start withdrawing towards the end of this month, nearly a month behind schedule. This year’s delayed withdrawal is likely to help the country avoid a drought situation, even as countrywide rainfall is hovering on borderline drought conditions, measuring 10% below normal levels since the beginning of the monsoon season.

Weak opening in European markets too dampened sentiments, as investors braced for the ramifications of another round of tariffs from the two major economies. Asian markets ended mostly in red on trade concerns. China cancelled planned trade talks with the US and also cancelled a planned visit to the US by vice premier Liu He scheduled for this week.

Back home, weakness in the rupee coupled with rising global crude oil prices also dampened the trading sentiment. The market participants failed to take support with Economic Affairs Secretary Subhash Chandra Garg’s statement that the government will “very soon” implement the second set of measures including curb on imports of non-essential items to shore up rupee to 68-70 level against the US dollar. On the sectoral front, telecom sector remained in focus with private report stating that with several operators winding down their businesses, job losses in the beleaguered telecom sector have been heavy. Telcos are expected to let go of around 50,000-75,000 employees in 2018. Besides, stocks related to Oil & Gas space ended lower despite a private report stating that India the world's third-biggest oil importer, is considering reducing oil purchases to mitigate the pain of high crude prices and the declining rupee.

Finally, the BSE Sensex declined 536.58 points or 1.46% to 36,305.02, while the CNX Nifty was down by 175.70 points or 1.58% to 10,967.40.

The BSE Sensex touched a high and a low of 36,945.50 and 36,216.95, respectively and there were 5 stocks advancing against 25 stocks declining, while one stock remain unchanged on the index.

The broader indices ended in red; the BSE Mid cap index lost 2.40%, while Small cap index was down by 2.72%.

The few gaining sectoral indices on the BSE were IT up by 2.06%, TECK up by 1.37% and Energy was up by 0.44%, while Realty down by 5.10%, Auto down by 3.75%, Telecom down by 3.30%, Consumer Discretionary Goods & Services down by 3.03% and Healthcare was down by 2.71% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.51%, Coal India up by 2.10%, Infosys up by 1.56%, Reliance Industries up by 1.27% and NTPC up by 0.57%. On the flip side, Mahindra & Mahindra down by 6.46%, HDFC down by 6.22%, Indusind Bank down by 4.94%, Adani Ports down by 4.49% and Bharti Airtel down by 4.00% were the top losers.

Meanwhile, praising India’s momentous progress in reducing multidimensional poverty, the United Nations Development Programme (UNDP) in its latest report has said that the country has halved its Multidimensional Poverty Index (MPI) to 27.5% from 54.7% between 2005-06 and 2015-16.

As per the report, 271 million people in India moved out of poverty in last ten years. Jharkhand state was at top among all states in reducing multidimensional poverty, followed by Arunachal Pradesh, Bihar, Chhattisgarh, and Nagaland. However, the states such as Delhi, Kerala and Goa have low incidences of multidimensional poverty.

Further, the report noted that 364 million Indians still continue to experience acute deprivations in health, nutrition, schooling and sanitation, despite good progress in reducing the poverty index. It further added that more than half of India’s poor are living in just four states--Bihar, Jharkhand, Uttar Pradesh and Madhya Pradesh and these states accounted for 196 million MPI poor people.

The CNX Nifty traded in a range of 11,170.15 and 10,943.60. There were 9 stocks in green as against 41 stocks in red on the index.

The top gainers on Nifty were TCS up by 4.99%, Coal India up by 2.31%, Infosys up by 2.08%, Tech Mahindra up by 1.43% and Reliance Industries up by 1.40%. On the flip side, Indiabulls Housing down by 7.26%, Eicher Motors down by 6.94%, Mahindra & Mahindra down by 6.45%, HDFC down by 6.27% and Bajaj Finance down by 6.07% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 10.83 points or 0.14% to 7,479.40, France’s CAC fell 11.38 points or 0.21% to 5,482.79 and Germany’s DAX was down by 37.03 points or 0.30% to 12,393.85.

Asian markets ended mostly in red on Monday as Beijing cancelled upcoming talks with the Washington and a new round of tariffs between China and the United States came into effect, ending hopes of a resolution to the trade dispute. Washington had announced 10 percent duties on $200 billion of Chinese imports, which prompted Beijing to respond with tariffs on $60 billion of US goods. On Friday, the Wall Street Journal reported that China had called off planned trade talks with the US in the wake of a new round of duties. Meanwhile, trading activity was subdued as markets in Japan, South Korea, China and Taiwan were closed for public holidays.