Benchmarks extend losing streak for third consecutive day

Extending southward journey for third straight session, Indian equity benchmarks ended the first day of new F&O expiry on pessimistic note, as traders remained on sidelines ahead of the Goods and Services Tax (GST) Council’s 30th meeting to be held on Friday to discuss multiple proposals for levying additional cess to help flood-ravaged Kerala recoup revenue losses. After making a cautious start, key indices gained traction and trade in fine fettle in noon deals as traders took some relief with CRISIL Research’s report that revenues of corporates are expected to log a robust 12.1% year-on-year growth in the second quarter of FY 2019, nearly twice the 6.4% growth in the corresponding quarter of last fiscal. Traders also took some comfort with a report that the Commerce Ministry removed the value limit for exports through post but has fixed Rs 5 lakh cap in case of overseas shipments through courier services. Exporters’ body FIEO said the move gives an edge to shipments through foreign post offices over couriers. Besides, a private report state that Indian agriculture could be heading for bumper kharif crop harvest, that it could provide a major fillip to rice exports.

However, markets took U-turn and entered into red terrain in last leg of trade as sentiments turned pessimistic with SBI Ecowrap report stating that the Reserve Bank of India (RBI) is expected to hike its key lending rate by 25 basis points in October. According to the report, the expected rate hike might not be the last one in the current financial year. Adding some concerns, the World Trade Organization (WTO) said that escalating trade tensions and tighter credit market conditions in important markets would moderate the growth of global merchandise trade to 3.7% in 2019 from 3.9% in 2018. The multilateral trade body also said that trade volume growth should slow to 3.7% in 2019 as global GDP growth dips to 2.9%. Markets pared most of their losses in dying hour of trade, but it was not enough to bring key gauges back into green terrain.

Weak opening in European markets too dampened sentiments, as Eurozone economic confidence weakened further in September. As per survey data from European Commission, the economic sentiment index dropped to 110.9 in September from 111.6 in August. Asian markets ended mostly in green, following the overnight gains on Wall Street, with investor sentiment bolstered by the Federal Reserve's positive outlook for the US economy in addition to upbeat US economic data. Besides, Federal Reserve Chairman Jerome Powell said that the US economy does not face a large chance of a recession in the next two years.

Back home, airlines stocks ended lower despite report that Indian carriers are unlikely to face a significant hit from the government’s decision this week to impose a tariff on jet fuel, as imports account for less than 5% of domestic jet fuel consumption. Food processing sector stocks remained in focus with report that the government will relax foreign direct investment (FDI) regulations to give a boost to the food processing sector, which has attracted $8.7 billion of investment.

Finally, the BSE Sensex declined 97.03 points or 0.27% to 36,227.14, while the CNX Nifty was down by 47.10 points or 0.43% to 10,930.45.

The BSE Sensex touched a high and a low of 36,551.86 and 35,985.63, respectively and there were 10 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 1.61%, while Small cap index was down by 3.41%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 0.12%, Energy up by 0.09% and Bankex was up by 0.03%, while Metal down by 5.01%, Realty down by 4.85%, Telecom down by 4.01%, Basic Materials down by 3.31% and Capital Goods was down by 2.67% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.28%, HDFC up by 1.49%, HDFC Bank up by 1.40%, ITC up by 1.18% and Wipro up by 1.12%. On the flip side, Yes Bank down by 9.72%, Hero MotoCorp down by 5.16%, Bharti Airtel down by 5.01%, Tata Steel down by 4.85% and Vedanta down by 3.60% were the top losers.

Meanwhile, the Commerce Ministry has set up a 12-member high-level advisory group to look at ways of promoting India’s trade. It would also look at areas including exchange rate management, impact of trade wars and strategy to manage consequences of unprecedented de-stabilising conflict oriented trade dynamics.

That apart, the group would examine prevailing trade dynamics, and suggest framework for India to engage in future international trade. The group on future foreign trade policy would suggest to boost India's trade qualitatively and quantitatively.

The panel would be headed by Prime Minister's Economic Advisory Council (PMEAC) part-time member Surjit Bhalla. The other members include Principal Economic Adviser Sanjeev Sanyal, former commerce secretary Rajiv Kher and Quality Council of India Chairman Adil Zainulbhai.

Since 2011-12, the country’s exports have been hovering at around $300 billion. During 2017-18, the shipments grew by about 10 percent to $303 billion. Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.

The CNX Nifty traded in a range of 11,034.10 and 10,850.30. There were 17 stocks in green as against 32 stocks in red, while one stock remain unchanged on the index.

The top gainers on Nifty were Axis Bank up by 2.71%, ITC up by 1.89%, HDFC Bank up by 1.64%, ONGC up by 1.62% and Wipro up by 1.24%. On the flip side, Yes Bank down by 9.42%, Indiabulls Housing Finance down by 9.01%, Hindalco down by 6.36%, Hero MotoCorp down by 5.66% and Tata Steel down by 5.19% were the top losers.

European markets were trading in red; France’s CAC decreased 40.36 points or 0.73% to 5,500.05, Germany’s DAX lost 154.41 points or 1.26% to 12,281.18 and UK’s FTSE 100 was down by 39.27 points or 0.52% to 7,506.17.

Asian markets ended mostly in green on Friday, followed their US peers higher as news of robust US economic growth and remarks from Federal Reserve Chairman Jerome Powell that the central bank's gradual interest-rate increases are helping sustain the economic expansion bolstered investor’ optimism about the world's largest economy. Chinese shares ended higher amid expectations for stimulus and on hopes that more Chinese shares will be included in mainstream global benchmarks. Further, Japanese shares ended higher on hopes for continued corporate earnings growth. Export-oriented stocks surging as the dollar hit a nine-month high versus the yen after the release of upbeat US data, too supported Japanese shares.