Post Session: Quick Review

Key equity benchmarks fell sharply on Friday, extending losses to a second session in a row, amid fears on global trade and economic growth. Sharp sell-off in last leg of trade dragged the markets to low points, breaching their crucial 10,050 (Nifty) and 33,350 (Sensex) levels. The day began on a subdued note, as traders remain concerned with the Controller General of Accounts’ (CGA) data showing that the fiscal deficit of the Central government has widened in the first half of 2018-19 to 95.3% of the Budget Estimate (BE), mainly on account of slow growth in revenue collections. The deficit was at 91.3% of BE at September-end of the last financial year. Traders took note of India ratings’ report that the rupee may average at 69.79 to the dollar in the second half, down 8.3% from the first half if the monetary authority props it up by mobilising at least $30 billion from NRIs as it has done in 2013. It added that the rupee is the worst-performing emerging market currency losing over 15 percent year-to-date.

However, in second half of the day, key indices gave up most of their losses to come off their intraday low points, as traders took a note of the NASSCOM’s report that Indian startups has registered a 108 percent growth in total funding to $4.2 billion in 2018 as compared to $2 billion in previous year. But, markets failed to trim all of their losses and saw strong sell-off, as anxiety remained among the investors with a private report stating that India’s tight money conditions and fears of a contagion following a debt crisis at a local lender dented demand and put a muzzle on animal spirits in the world’s fastest-growing major economy. Cautiousness also crept in with a report highlighting that the Securities and Exchange Board of India (Sebi) imposed a total penalty of Rs 70 lakh on 10 entities for indulging in manipulative trade in the shares of Shree Global Tradefin. A drop in crude oil prices too failed to lift up sentiments on D-Street.

On the global front, Asian markets ended in red on Friday, while European markets were trading in red, tracking overnight losses in Asia as anxiety over the outlook for US corporate profits renewed concerns about global economic growth. Back home, agriculture industry related stocks ended mixed, despite Commerce Minister Suresh Prabhu’s statement that the government will soon come out with a new agri export policy which would have provisions for setting up agro specific zones to boost outbound shipments. Besides, telecom stocks was in focus aided by a private report stating that in a sign of the country's ascendancy and as a testimony to the telecom sector's blistering pace of growth, India became the world's second-largest telecom market in 2018 with over a billion subscribers. According to the report, the total mobile subscriber base is expected to reach 1.28 billion in FY 2022 and data consumption is expected to reach 7 GB (giga bit) per subscriber per month.

The BSE Sensex ended at 33314.60, down by 375.49 points or 1.11% after trading in a range of 33298.31 and 33776.80. There were 9 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.04%, while Small cap index down by 0.12%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 0.58%, Energy up by 0.48%, Industrials up by 0.11% and Auto up by 0.09%, while Bankex down by 2.12%, IT down by 2.06%, TECK down by 1.77%, FMCG down by 1.33% and Power down by 1.04% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.06%, Bajaj Auto up by 1.54%, Reliance Industries up by 1.29%, Tata Steel up by 0.93% and Hero MotoCorp up by 0.65%. (Provisional)

On the flip side, Yes Bank down by 8.90%, Axis Bank down by 4.29%, Indusind Bank down by 3.38%, TCS down by 3.10% and Kotak Mahindra Bank down by 2.69% were the top losers. (Provisional)

Meanwhile, amid concerns over the government may miss its deficit target of 3.3% of Gross Domestic Product (GDP), the Controller General of Accounts (CGA) in its latest data showed that the central government’s fiscal deficit widened in the first half (H1) of current fiscal year (2018-19). Fiscal deficit was 95.3% of the Budget Estimate (BE) in the first six months (April-September) of FY19, mainly on account of slow growth in revenue collections. The deficit was at 91.3% of BE at September-end of the last financial year. The fiscal deficit target for 2018-19 is Rs 6.24 lakh crore.

The CGA said in actual terms, the fiscal deficit or gap between the total expenditure and receipts was Rs 5.94 lakh crore during April-September this fiscal. According to the data, the tax collection (net) at September-end of 2018-19 was Rs 5.82 lakh crore, or 39.4%, of BE. It was 44.2% of the BE in September-end last fiscal.

The total receipts of the government during April-September 2018 were Rs 7.09 lakh crore, or 39%, of BE, compared to 40.6% in the same period of 2017-18. The CGA data also showed that total expenditure during April-September 2018 was Rs 13.04 lakh crore or 53.4% of BE. The capital expenditure was Rs 1.62 lakh crore or 54.2% of BE.

The CNX Nifty ended at 10022.40, down by 102.50 points or 1.01% after trading in a range of 10004.55 and 10128.85. There were 16 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were UPL up by 4.05%, Tata Motors up by 2.06%, Titan Co up by 1.97%, Bajaj Auto up by 1.85% and Tata Steel up by 1.14%. (Provisional)

On the flip side, Yes Bank down by 8.87%, JSW Steel down by 4.91%, Axis Bank down by 4.29%, HCL Tech. down by 3.58% and Grasim Industries down by 3.40% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 shed 119.59 points or 1.74% to 6,884.51, France’s CAC fell 129.32 points or 2.64% to 4,902.98 and Germany’s DAX dropped 249.15 points or 2.25% to 11,057.97.

Asian markets ended lower on Friday, as disappointing third-quarter sales figures from Alphabet and Amazon released after the US market close spurred fresh concerns about the outlook for US corporate earnings. Further, trade tensions, concerns over Italian government finances and Brexit risks also dampened investors’ sentiments. Chinese shares slipped, but ended the week higher on hopes for more government support to boost growth. Meanwhile, Japanese shares ended modestly lower on anxiety over the outlook for US earnings growth.