Post Session: Quick Review

Indian equity benchmarks witnessed a bloodbath for second straight session and ended with losses of more than two percent, as a steady decline in the domestic currency and concerns that the central bank would raise the policy interest rate soured investor sentiments. Both the S&P BSE Sensex and the NSE Nifty 50 settled below crucial 35,150 and 11,000 levels, respectively. Markets opened with heavy losses, following weak Asian peers. Traders remained cautious with Exporters’ body Federation of Indian Export Organisations’ (FIEO) statement that the growth of country’s exports is likely to slow in the coming months owing to various domestic and global factors. It said Indian exports have always been influenced by the growth in global trade and therefore, the subdued global trade forecast of 3.9% in 2018 and 3.7% in 2019 will have adverse bearing on export. The mood of the markets remain impacted by survey indicating that the India’s services sector expanded at a slower pace in September as higher fuel costs and stronger US dollar made imported goods expensive. The seasonally-adjusted Nikkei India Services Business Activity Index touched 50.9 in September, down from 51.5 recorded in August.

Key indices continued its free fall during the final hour of trade, as traders reacted negatively to a private report stating that new investment announcements have declined in the July-September period for the second quarter in a row. As per the report, private and public sector companies together announced new projects worth Rs 1.49 trillion in the quarter which ended in September, 41% lower than the preceding quarter. On a year-on-year basis, the decline was less pronounced at 12%. Adding to the pain, Nitin Gadkari said that India is facing an economic crisis due to its huge oil imports. Investors failed to draw any sense of relief with Finance Ministry indicating that gross direct tax collection in the first six months of the financial year grew 16.7 per cent to Rs 5.47 lakh crore. The broader indices were too capitulating to selling pressure with heavy losses of around 2%.

Asian markets ended lower on Thursday, after a spike in US treasury yields overnight spooked investors. European markets were trading in red, led lower by defensive stocks. Back home, Shares of state-run oil marketing companies such as HPCL, BPCL and IOC ended with heavy losses after Finance Minister Arun Jaitley said the government cut excise duty on petrol & diesel by Rs 1.50 per litre. Besides, Cement stocks fell despite Icra in its report stating that Cement production is expected to grow at 6-7 percent in the current fiscal year, driven by pick-up in affordable and rural housing segments and infrastructure.

The BSE Sensex ended at 35127.70, down by 847.93 points or 2.36% after trading in a range of 35063.13 and 35820.53. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices were trading in red; the BSE Mid cap index dipped 2.11%, while Small cap index was down by 2.20%. (Provisional)

The top losing sectoral indices on the BSE were Energy down by 7.09%, Oil & Gas down by 7.06%, Healthcare down by 3.15%, IT down by 3.00% and PSU down by 2.82%. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 3.89%, Axis Bank up by 2.18%, Larsen & Toubro up by 1.01%, Yes Bank up by 0.73% and Mahindra & Mahindra up by 0.40%. (Provisional)

On the flip side, Reliance Industries down by 7.66%, Hero MotoCorp down by 5.55%, TCS down by 4.38%, HDFC Bank down by 4.01% and Adani Ports &SEZ down by 3.97% were the top losers. (Provisional)

Meanwhile, expressing cautiousness on India’s exports, exporters’ body the Federation of Indian Export Organisations (FIEO) has said that the exports growth in the country is likely to slow down in the coming months due to various domestic and global factors. The FIEO President Ganesh Kumar Gupta said Indian exports have always been influenced by the growth in global trade and therefore, the subdued global trade forecast of 3.9% in 2018 and 3.7% in 2019 will have adverse bearing on exports.

Gupta also said in the first five months of the current fiscal, exports have done well, but they are likely to face greater challenges in months to come. He added that the export growth for September to November has to be watched carefully as exports in these months clocked over 25% growth in 2017 and thus would have the disadvantage of high base effect. He further said that the sanctions on Iran, payment problems in Venezuela, huge depreciation of currencies of Argentina, Turkey, South Africa, Russia, Brazil and banking restrictions on large number of countries like Syria, Sudan, Libya, and Iraq are affecting exports.

On domestic front, the FIEO President said flow of credit to the export sector is a huge issue as export credit declined by over 41% in April-June. He said such mismatch does not augur well for exports and thus needs to be addressed immediately and effectively and the GST refund pendency should be resolved immediately. However, he expressed optimism that the country's exports would touch $350 billion exports in 2018-19. Last time in March, exports entered negative zone. It dipped by 0.66% in that month. Besides, exports were up by 16.13% to $136.10 billion in April-August 2018-19.

The CNX Nifty ended at 10575.80, down by 282.45 points or 2.60% after trading in a range of 10568.15 and 10754.70. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were ICICI Bank up by 3.77%, Ultratech Cement up by 2.54%, Axis Bank up by 2.11%, Bharti Infratel up by 1.75% and Larsen & Toubro up by 0.92%. (Provisional)

On the flip side, HPCL down by 14.97%, BPCL down by 13.91%, Indian Oil Corp. down by 13.19%, Reliance Industries down by 7.41% and Eicher Motors down by 6.61% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 75.63 points or 1.02% to 7,434.65, France’s CAC shed 53.58 points or 0.99% to 5,437.82 and Germany’s DAX fell 35.00 points or 0.29% to 12,252.58.

Asian markets ended lower on Thursday after upbeat US economic data drove 10-year US Treasury yields to their highest level since 2011, raising concerns the Federal Reserve may raise interest rates aggressively. A report from ADP and Moody's Analytics showed private payrolls in the US increasing by 230,000 in September - the highest in seven months. Japanese shares closed lower after rising earlier in the day on the back of a weak yen and a record close on Wall Street overnight. Meanwhile, the Chinese markets remain closed all week for the National Day holiday.