Bears hold tight grip on markets

Bears were holding tight grip on the markets in late afternoon session, with Sensex and Nifty crumbling under pressure. The key indices were falling more than 2%, on the back of continuous heavy selling in almost all the sectors. A sharp fall in broader markets along with losses led by major industry losers like Reliance Industries and Hero MotoCorp, also kept the markets down in late noon deals.  Adding some anxiety, Nitin Gadkari said that India is facing an economic crisis due to its huge oil imports. Some concerns also came with 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%. The market participants overlooked finance ministry’s data report showing that gross direct tax collection in the first six months of the financial year grew 16.7% to Rs 5.47 lakh crore. On the sectoral front, cement stocks were trading higher, aided by ICRA’s latest report stating that cement production is expected to grow at 6-7% in the current fiscal year, driven by pick-up in affordable and rural housing segments and infrastructure.

On the global front, European markets were trading in red, as the euro area private sector expanded at the slowest pace in four months in September on weak manufacturing activity. The survey data from IHS Markit showed that the final composite output index dropped to 54.1 in September from 54.5 in August and slightly below the flash estimate of 54.2. Separately, Eurozone retail sales dropped unexpectedly in August reflecting the weakness in food turnover. As per figures from Eurostat, retail sales decreased 0.2% month-on-month, following a 0.6% drop in July. Asian markets were trading in red, as trade fears lingered and positive economic data raised the chances of another US rate hike in December. Back home, in scrip specific development, Mercator surged after the company reported total production of coal for the month of September 2018 at 183,485 MT, which is record production level from the present mines.

The BSE Sensex is currently trading at 35255.37, down by 720.26 points or 2.00% after trading in a range of 35063.13 and 35820.53. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.15%, while Small cap index was down by 2.38%.

The top losing sectoral indices on the BSE were Energy down by 4.56%, Healthcare down by 3.25%, IT down by 3.05%, TECK down by 2.80% and Oil & Gas down by 2.77%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were ICICI Bank up by 4.68%, Larsen & Toubro up by 1.49%, Axis Bank up by 1.31%, Yes Bank up by 0.89% and Tata Steel up by 0.36%. On the flip side, Reliance Industries down by 6.10%, Hero MotoCorp down by 4.94%, TCS down by 4.32%, Sun Pharma down by 4.11% and Adani Ports & SEZ down by 3.87% were the top losers.

Meanwhile, amid underwhelming market demand and intensified price pressures, India’s services sector activity fell for the second straight month in September 2018. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index dropped to 50.9 in September from 51.5 in August, signaling the slowest growth in the current four-month sequence of rising activity. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- too fell to 51.6 in September from 51.9 in August.

According to the report, a broad stagnation of new business has led to weaker growth in the service sector and market conditions were underwhelming amid a lack of demand at a time of generally higher prices. Further, increase in backlogs of work encouraged service sector companies to again add to their workforce numbers. The report further showed that Information & Communication sectors witnessed a strongest underlying growth in activity and new work, while there were falls seen in the Finance & Insurance and Business Services categories.

On the price front, Indian service providers continued to face higher input costs during the reported month, on account of higher fuel costs and consecutively, the firms raised their selling prices. Average output price inflation was the strongest recorded since April and marked a twentieth successive monthly increase in prices charged. Meanwhile, confidence amongst service providers about the year ahead remained inside positive territory.

The CNX Nifty is currently trading at 10640.10, down by 218.15 points or 2.01% after trading in a range of 10570.50 and 10754.70. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 5.07%, Bharti Infratel up by 1.77%, Ultratech Cement up by 1.38%, Axis Bank up by 1.13% and Larsen & Toubro up by 1.09%. On the flip side, Reliance Industries down by 5.90%, Eicher Motors down by 5.04%, Hero MotoCorp down by 5.03%, TCS down by 4.34% and Dr. Reddy’s Lab down by 4.28% were the top losers.

All Asian markets were trading in red; Nikkei 225 plunged 135.34 points or 0.56% to 23,975.62, Hang Seng declined 467.39 points or 1.76% to 26,623.87, Taiwan Weighted fall 145.03 points or 1.35% to 10,718.91, Jakarta Composite lost 120.69 points or 2.1% to 5,747.05, KOSPI fell 35.08 points or 1.54% to 2,274.49 and Straits Times was down by 35.33 points or 1.09% to 3,232.07.

All European markets were trading in red; UK’s FTSE 100 decreased 59.33 points or 0.8% to 7,450.95, France’s CAC dropped 41.30 points or 0.76% to 5,450.10 and Germany’s DAX was down by 39.34 points or 0.32% to 12,248.24.