Weak trade persists; Sensex down by 275 points

Weak trade continued on the Dalal Street in late afternoon session, on the back of weak opening in European markets along with continuous selling in IT and TECK stocks. The major industry losers like Yes Bank and Axis Bank also contributed to the losses in late noon deals. Domestic sentiments continued to hit by widening Fiscal deficit data. 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. Traders paid no heed towards Director General of Foreign Trade (DGFT) Alok Chaturvedi’s statement that the commerce ministry is working on a comprehensive strategy and considering incentives for exporters with a view to boost the country's outbound shipments. He also said that the exports, which recorded about 10% growth in 2017-18 to over $300 billion, is expected to reach $330-340 billion this fiscal. The market participants even failed to take any sense of relief with Prime Minister Narendra Modi’s statement that India offers unprecedented employment and entrepreneurial opportunities.

On the sectoral front, telecom stocks were trading higher, 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. However, stocks related to sugar companies exhibited mixed trend, amid a private report showing that India’s sugar output is likely to decline marginally this year due to the possibility of lower cane yields. The drop in output is being attributed to white grub infestation in Maharashtra and water logging in the cane fields of Uttar Pradesh.

On the global front, European markets were trading in red, as Germany's business sentiment weakened for the second straight month in October on geopolitical tensions. The survey data from the Mannheim-based Ifo institute showed that the business climate index fell more-than-expected to 102.8 in October from 103.7 in September. The expected score was 103.2. Asian markets were also trading in red. Back home, in scrip specific development, UPL jumped on reporting 14% rise in Q2 consolidated net profit at Rs 270.00 crore as compared to Rs 237.00 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 33414.82, down by 275.27 points or 0.82% after trading in a range of 33332.10 and 33776.80. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.25%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.97%, Energy up by 0.62%, Telecom up by 0.35%, Auto up by 0.34% and Consumer Disc up by 0.13%, while IT down by 1.81%, TECK down by 1.66%, FMCG down by 1.57%, Bankex down by 1.54% andPower down by 1.21% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.51%, Reliance Industries up by 1.73%, Bajaj Auto up by 1.41%, Hero MotoCorp up by 1.37% and Tata Steel up by 1.10%. On the flip side, Yes Bank down by 7.41%, Axis Bank down by 3.48%, ITC down by 3.31%, ONGC down by 3.24% and Infosys down by 2.27% were the top losers.

Meanwhile, the Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi has said that non-performing assets (NPAs) crisis in the banking sector provides an immense opportunity for development of bond market. He also invited all stakeholders to come forward with suggestions to further boost the bond market ecosystem.

The chairman further highlighted that rating agencies play a significant role as gatekeepers in maintaining trust of investors in bond market. Besides, he said that Sebi has taken a number of steps to rationalise their governing structure and for close monitoring of ratings and it would consider further necessary changes in norms for them in consultation with stakeholders.

Besides, Ajay Tyagi noted that the corporate bond market could get a boost if sectoral regulators of pension funds, provident funds and insurance firms could allow their regulated entities higher exposure in the segment. He further said that the regulator is examining enhancing the framework for 'on tap' bond issuances by corporates.

The CNX Nifty is currently trading at 10047.30, down by 77.60 points or 0.77% after trading in a range of 10004.55 and 10128.85. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Titan up by 2.85%, Tata Motors up by 2.51%, Reliance Industries up by 1.60%, Bajaj Auto up by 1.51% and UPL up by 1.43%. On the flip side, Yes Bank down by 7.41%, JSW Steel down by 4.07%, HCL Tech down by 3.84%, ITC down by 3.41% and Grasim Industries down by 3.38% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 lost 84.13 points or 0.4% to 21,184.60, Straits Times fell 45.72 points or 1.54% to 2,967.12, Taiwan Weighted decreased 31.61 points or 0.33% to 9,489.18, Hang Seng declined 276.83 points or 1.12% to 24,717.63, KOSPI plunged 36.15 points or 1.78% to 2,027.15 and Shanghai Composite dropped 4.95 points or 0.19% to 2,598.85. On the flip side, Jakarta Composite was up by 30.40 points or 0.53% to 5,785.37.

All European markets were trading in red; UK’s FTSE 100 decreased 111.05 points or 1.61% to 6,893.05, France’s CAC lost 108.92 points or 2.21% to 4,923.38 and Germany’s DAX was down by 216.83 points or 1.96% to 11,090.29.