Benchmarks end near intraday low points

Indian equity indices closed extremely volatile session near their intraday low points on Tuesday, amid mixed global cues. The markets made a firm start, aided by Union Home Minister Rajnath Singh’s statement that India will be among the top three economies of the world by 2030 if it kept up its current pace of growth. Separately, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) report retained India’s economic growth forecast at 7.3% for the current year 2018. Traders took encouragement with DIPP Secretary Ramesh Abhishek’s statement that India is taking several steps, including hiring more manpower and increasing use of technology, to reduce time for granting patents and trademarks. Some support also came with a report stating that India is all set to emerge as the 11th wealthiest country in the world as its personal financial wealth is projected to grow by 13% to $5 trillion by 2022 from the current $3 trillion.

But, the benchmarks soon turned choppy, amid credit rating agency CRISIL’s latest report that farmers’ income remain low in calendar year 2018, despite normal rainfall. The street got cautious with International Monetary Fund (IMF) stating that global growth has plateaued at 3.7% with its chief economist warning the world that there are clouds on the horizon and growth has proven to be less balanced than hoped. Key indices weakened further to settle the day with the losses of around half a percent on heavy selling towards the fag-end. Domestic sentiments got hit with reports that India fared poorly, ranking 147 out of 157 countries, in terms of its commitment to reducing inequality. Some concerns also came with another report showing that India is one of the most vulnerable countries for extreme weather events.

On the global front, European markets were trading in red, as Eurozone investor confidence weakened in October largely due to uncertainties about the fiscal policy stance in Italy and the automobile industry in Germany. As per survey data from think tank Sentix, the investor sentiment index fell more-than-expected to 11.4 in October from 12.0 in September. Asian markets ended mixed, on concerns about rising interest rates globally and mounting tensions over trade. Chinese Foreign Minister Wang Yi accused the US of constantly escalating the trade dispute with China and harming the communist country's rights and interests with its support for Taiwan, in a sign of sharply deteriorating relations between the two countries.

Back home, on the sectoral front, agri stocks remained in limelight, supported by Union Agriculture Minister Radha Mohan Singh’s statement that the Union government has launched a system to eliminate the role of middle men in procuring farming produce, to ensure better monetary benefits to peasants. However, stocks related to gems and jewellery sector ended lower, weighed down by the Gems and Jewellery Export Promotion Council (GJEPC) data report showing that the country’s gems and jewellery exports contracted by 0.75% to $13.18 billion in April-August this fiscal as demand slowed down in major developed markets.

Finally, the BSE Sensex tumbled 174.91 points or 0.51% to 34,299.47, while the CNX Nifty was down by 47.00 points or 0.45% to 10,301.05.

The BSE Sensex touched a high and a low of 34,711.68 and 34,233.50, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.16%, while Small cap index was down by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 1.01%, Healthcare up by 1.00%, TECK up by 0.23% and IT up by 0.18%, while Consumer Durables down by 3.91%, Auto down by 2.62%, Oil & Gas down by 1.92%, FMCG down by 1.68% and Consumer Disc down by 1.47% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 4.52%, HDFC up by 2.59%, Vedanta up by 2.44%, Tata Steel up by 2.23% and Coal India up by 1.96%. On the flip side, Tata Motors down by 13.40%, Tata Motors - DVR down by 12.34%, Asian Paints down by 3.95%, Maruti Suzuki down by 3.07% and Hindustan Unilever down by 2.73% were the top losers.

Meanwhile, Oil Minister Dharmendra Pradhan has said that there was no question of going back on deregulation of oil prices despite the government asking state-owned oil marketing companies to subsidise petrol and diesel by Re 1 per litre. He also said that international oil prices hitting a four-year high of $85 per barrel is a challenge that has resulted in fuel prices continuing to rise despite a one-off excise duty cut and public sector units (PSUs) subsidising fuel.

According to Minister, the combination of rupee depreciation and rise in international oil rates has made imports costlier, resulting in retail pump rates shooting up. He also said that the decision to cut excise duty on petrol and diesel by Rs 1.50 per litre each and ask state oil firms to absorb another Rs 1-a-litre was aimed at giving relief to consumers. He noted that the government was sensitive to consumers and had taken the decision in their interest. On asking oil PSUs to subsidise fuel, he said that the companies have taken the decision to shield consumers from high prices.

Pradhan further said “this is not going back on deregulation. Fuel prices continue to be decided on a daily basis based on factors like benchmark international rate and foreign exchange rate.” He also said that the Centre had done its bit and now states should come forward and cut sales tax or VAT. He noted that many states have done but some who were shedding only crocodile tears over high fuel prices haven't. He does not want to politicise the issue but states must realise their responsibility and cut value added tax (VAT).

The CNX Nifty traded in a range of 10,397.60 and 10,279.35. There were 25 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 5.36%, Zee Entertainment up by 4.58%, Bajaj Finance up by 4.36%, Adani Ports & SEZ up by 4.21%, and Vedanta up by 2.61%. On the flip side, Tata Motors down by 13.09%, Titan down by 7.93%, HPCL down by 4.32%, Eicher Motors down by 4.22% and Asian Paints down by 3.56% were the top losers.

European markets were trading in red; UK’s FTSE 100 fell 17.94 points or 0.25% to 7,215.39, France’s CAC decreased by 14.31 points or 0.27% to 5,285.94 and Germany’s DAX was down by 54.78 points or 0.46% to 11,892.38.

Asian markets ended mostly lower on Tuesday as investors fretted about the impact of rising interest rates, US-China tensions and Italy's decision to expand budget deficits. The trade war between China and the United States may intensify after China allowed its currency to slip past a psychological bulwark. The International Monetary Fund has lowered its forecast for Chinese economic growth in 2019 to 6.2 percent from 6.4 percent, citing the ‘negative effect of recent tariff actions’. Japanese shares ended lower as a firm yen added to investors’ worries over China and rising US bond yields. Though, Chinese shares finished modestly higher amid bets that policymakers will increase policy support to counter the negative impact of an escalating trade war on Chinese exporters. Meanwhile, the South Korean markets were closed for a public holiday.