Post Session: Quick Review

Dalal Street witnessed a bloodbath in Wednesday's trading session, by falling around one and half percent point, as traders remained on sidelines ahead of the three-day RBI policy review scheduled to be announced this week. Massive selloff in the last hour dragged the market to its lowest point, with Sensex and Nifty settling below their crucial 36,000 and 11,000 levels, respectively. Markets traded in negative note since the beginning, following subdued global cues. Sentiments remained dampened with the government data showing that the growth of eight core sectors slowed to 4.2% in August, due to fall in output of crude oil, petroleum product and fertiliser. The street remained disappointed with a report that Reserve Bank of India (RBI) is likely to increase the repo rate by 25 basis points in the upcoming monetary policy review as inflation is expected to accelerate further due to higher crude prices and the weakness in rupee. The monetary policy committee will start its three-day meeting from October 3 to decide on the fourth bi-monthly monetary policy. Besides, retail inflation for industrial workers rose to 5.61% in August from 2.52% in the year-ago month mainly due to rise in prices of food items and petroleum products.

Markets extended losses in late trade, as sentiments on the street weakened further with ICRA’s latest report stating that credit quality pressure on investment grade entities has risen in the six months of April-September 2018, with an increase in the downward rating pressure on them. This is also reflected in the rating drift of investment grade entities turning negative for the first time in four years, in the first half of financial year 2018-2019, as also the rise in the downgrade rate of investment grade entities. Anxiety also spread among traders after provisional estimate of the first phase of the 10th agricultural census showed that the average size of the Indian farmland shrank by over 6% between 2010-11 and 2015-16, with operational holding in the country dropping to 1.08 hectares from 1.15 hectares in 2010-11. The street overlooked a report that the finance ministry expects the GST collections to cross Rs 1 lakh crore in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department. Adding to the pain was a weakening rupee, which fell to 73.24 per US dollar when the market came to a close.

On the global front, Asian markets ended mostly lower on Wednesday, following the mixed cues overnight from Wall Street amid worries about rising U.S.-China tensions. Concerns about Italy's budget plan and news that Indonesia's rupiah fell to a new 20-year low also dampened sentiment. European markets were trading mostly in green on reports the government will rein in spending plans.

Back home, Power stocks ended lower, despite Prime Minister Narendra Modi stated that India is targeting 40% of electricity generation from non-fossil fuel-based resources by 2030 as it looks to tap vast solar and wind potential to replace reliance on polluting coal to meet its energy needs.

The BSE Sensex ended at 35959.05, down by 567.09 points or 1.55% after trading in a range of 35931.82 and 36602.85. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices were trading mixed; the BSE Mid cap index declined 1.14%, while Small cap index was up by 0.16%. (Provisional)

The few gaining sectoral indices on the BSE were Metal up by 1.73%, Oil & Gas up by 0.68%, PSU up by 0.56% and Capital Goods was up by 0.36%, while Auto down by 3.07%, Telecom down by 2.87%, TECK down by 2.42%, IT down by 2.29% and Consumer Discretionary Goods & Services was down by 2.15% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 5.34%, Vedanta up by 3.09%, ONGC up by 1.34%, Coal India up by 1.08% and Larsen & Toubro up by 0.02%. (Provisional)

On the flip side, Mahindra & Mahindra down by 6.68%, TCS down by 4.32%, Axis Bank down by 3.98%, ICICI Bank down by 3.26% and Maruti Suzuki down by 3.08% were the top losers. (Provisional)

Meanwhile, providing some relief to the industries, credit rating agency, Crisil in its latest report has said that credit profiles of Indian corporates improved during the first half of the current fiscal year (H1FY19). As per the report, India Inc's credit ratio stood at 1.68 times in the April to September period as against 1.45 times in the preceding six months.

However, the rating agency pointed that credit profiles were moderated when compared to the same period last year (1.88 times in the first half of the previous fiscal year). Further, the report showed that the debt-weighted credit ratio of firms at 1.20 times during April- September 2018 against 1.53 times in the year-ago period and 3.19 times in the preceding six months.

Besides, Crisil listed the various risk factors for Indian companies in future such as the rupee depreciation, rising interest rates and tariff wars. But, Crisil-rated corporates are expected to sustain their credit risk profiles even in the face of headwinds, backed by strong demand, increased government spending towards infrastructure, and leaner balance sheets.

The CNX Nifty ended at 10851.20, down by 157.10 points or 1.43% after trading in a range of 10843.75 and 10989.05. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 5.75%, Hindalco up by 4.86%, Indiabulls Housing Finance up by 3.85%, HPCL up by 3.56% and Vedanta up by 3.33%. (Provisional)

On the flip side, Mahindra & Mahindra down by 7.03%, Eicher Motors down by 6.40%, Bharti Infratel down by 6.33%, TCS down by 4.27% and Axis Bank down by 3.61% were the top losers. (Provisional)

European markets were trading mostly in green; UK’s FTSE 100 increased 12.45 points or 0.17% to 7,487.00 and France’s CAC was up by 6.16 points or 0.11% to 5,474.05, while Germany’s DAX fell 51.45 points or 0.42% to 12,287.58.

Asian markets ended mostly lower on Wednesday as investors fretted about Italy's budgetary spending and a controversial clause in the new US-Mexico-Canada trilateral pact put the focus back on the Sino-US tariff dispute. The US-China trade dispute is unlikely to be resolved anytime soon as a provision in the new US-Mexico-Canada trade agreement gives the Trump administration an effective veto over any China trade deal by Canada or Mexico. Japanese shares ended lower as the weak yen trend paused on concerns over Italian finances and automakers skidded after posting weak US sales data. On the economic front, the latest survey from Nikkei revealed that the services sector in Japan continued to expand in September, but at a sharply slower pace, with a two-year low services PMI score of 50.2. That's down from 51.5 in August. Meanwhile, China's financial markets remain closed for the National Day holiday. South Korean markets were also closed for a public holiday.