Post Session: Quick Review

Indian equity benchmarks continued their weak run for third straight session on Friday and settled with heavy losses of more than two and half percent, after the Reserve Bank of India (RBI) kept the repo rate unchanged at 6.5%. Intense selling pressure in final hours of trade largely forced the markets to close at day’s low, breaching their crucial 10,250 (Nifty) and 34,250 (Sensex) levels. Markets traded on feeble note since the beginning, as traders remain concerned about Union minister Nitin Gadkari’s statement that the country is facing lot of economic crisis due to crude oil imports and need to reduce imports and increase exports. Some cautiousness also crept in with a private report that liberalising foreign borrowings for oil companies to raise to $10 billion will not have a material impact on arresting the slide of the rupee.

Markets extended southward moment in the last leg of trade, as market sentiment was further dampened with Fitch Ratings in its latest report stating that the acquisitions of distressed Indian steel assets could significantly increase the leverage of the acquiring companies, which also face the risk of domestic output being displaced by a substantial increase in imports from the escalation of trade barriers. Domestic sentiments also got hit with a private report indicating that amidst the erratic distribution of monsoon rains and with the possibilities of as many as 254 districts facing drought like situation, the total kharif cereals production likely to decline marginally by 1.71% compared to last kharif. Adding to the pain was a weakening rupee, which hit fresh record low of 74 against the US dollar when the market came to a close.

Asian markets ended lower on Friday, while European markets were trading in red, as a surge in US Treasury yields raised concerns about the outlook for interest rates. Back home, banking sector stocks were in focus with Crisil’s report that state-run lenders will narrow down their losses to Rs 500 billion in fiscal year 2018-19, from Rs 850 billion in the previous fiscal year, as the quantum of dud loans reduce. Stocks related to metal sector edged lower with ICRA’s report that the global prices of non-ferrous metals which have witnessed a correction due to global macroeconomic concerns in the last three months is unlikely to go down further.

The BSE Sensex ended at 34241.02, down by 928.14 points or 2.64% after trading in a range of 34228.41 and 35118.54. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 2.90%, while Small cap index was down by 2.25%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 1.14%, TECK up by 0.73% and Consumer Durables up by 0.13%, while Oil & Gas down by 13.10%, Energy down by 9.19%, PSU down by 7.34%, Metal down by 3.89%, Auto down by 3.81% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 2.24%, TCS up by 1.76%, Indusind Bank up by 0.69% and Wipro up by 0.06%. (Provisional)

On the flip side, ONGC down by 15.90%, Reliance Industries down by 6.80%, ICICI Bank down by 5.40%, Maruti Suzuki down by 5.33% and Adani Ports &Special down by 5.14% were the top losers. (Provisional)

Meanwhile, in an effort to ease inflationary pressure and boost consumer confidence, the government has decided to reduce the central excise duty levied on petrol and diesel by Rs 1.50 per litre. In addition to this, the oil marketing companies (OMCs) will cut their prices by Re 1, resulting in an effective fuel price cut of Rs 2.50 a litre.

Finance minister Arun Jaitley has said the excise duty cut would have an impact of Rs 10,500 crore on central government’s tax revenues. He also told state governments to follow suit by cutting a sales tax or value-added tax (VAT) by a similar amount. The reduction followed petrol and diesel prices touching new highs.

Jaitley said the move followed Brent crude oil touching four-year high of $86 a barrel on October 03 and interest rates in US reaching seven-year high. However, he added that inflation in India is still moderate at less than 4% and higher direct tax collections give comfort with regard to fiscal deficit. He also said domestic macroeconomic indicators are strong and stable, except for current account deficit (CAD).

The CNX Nifty ended at 10271.60, down by 327.65 points or 3.09% after trading in a range of 10267.90 and 10540.65. There were 8 stocks advancing against 42 stocks declining on the index. (Provisional)

The top gainers on Nifty were Infosys up by 2.17%, TCS up by 1.72%, Bharti Infratel up by 1.56%, Titan Co up by 1.35% and Dr. Reddys Lab up by 0.89%. (Provisional)

On the flip side, HPCL down by 24.94%, BPCL down by 20.13%, Indian Oil Corp. down by 16.93%, ONGC down by 14.68% and GAIL India down by 10.30% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 45.82 points or 0.62% to 7,372.52, France’s CAC fell 29.28 points or 0.54% to 5,381.57 and Germany’s DAX dropped 95.87 points or 0.79% to 12,148.27.

Asian markets ended lower on Friday as a surge in US Treasury yields raised concerns about the outlook for interest rates. Media reports suggesting that China secretly inserted surveillance microchips into servers used by Apple and Amazon also weighed on markets. Investors looked ahead to the US jobs report for September due later in the day for clues over the next rate hike move in December. US employment is expected to jump by about 185,000 jobs in September after increasing by 201,000 jobs in August. The jobless rate is expected to dip to 3.8 percent from 3.9 percent. Japanese shares ended lower, tracking weakness on Wall Street as rising US Treasury yields have dimmed the allure of most stocks except financial ones. Meanwhile, Chinese markets continued to remain closed for national holidays.