Markets end slightly lower on Thursday

Key Indian equity indices ended volatile session on a flat note on Thursday, tracking mixed global cues. The trading day begun on a cheerful note, as India improved its ranking on the World Bank’s ease of doing business report for the second straight year. In its annual Doing Business 2019 report, World Bank (WB) said India jumped 23 places to rank 77th position on the back of reforms related to insolvency, taxation and other areas. But, the markets soon turned volatile to swing between gains and losses, affected by reports that the growth of eight core infrastructure industries slowed to four-month low of 4.3% in September 2018, as production of crude oil and natural gas declined. Anxiety also spread among traders with a private report stating that India, which is the second-most populated nation in the world and on the verge of becoming the youngest country, will start ageing in next 15 years. This 15-year window is the best time to create job opportunities and capitalize on country’s rich demographic dividend. Meanwhile, industry body Confederation of Indian Industry (CII) called for immediate action by the central bank to ensure sufficient liquidity in the financial market to prevent a potentially crippling credit crunch.

However, the key indices erased their early losses to end the session with minor cut, supported by a report that the Indian manufacturing sector strengthened further in the month of October, on account of stronger order inflows and job creation. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - improved to 53.1 in October from 52.2 in September. The market participants also took support with Finance Minister Arun Jaitley’s statement that GST collections in October have crossed the Rs 1 lakh crore mark. The revenue from goods and services tax (GST) in September was Rs 94,442 crore. Adding some relief, the finance ministry said that India is likely to announce new steps to support small and medium-sized businesses, such as increased access to credit and financial markets, at an industry event on November 2. Traders took note of AIIB's Director General for Investment Operations Department, Yee Ean Pang’s statement that India is the biggest commitment country for the Asian Infrastructure Investment Bank (AIIB) which is interested in funding rural roads and transmission lines projects in the country.

On the global front, European markets were trading mixed, after Eurozone inflation accelerated to a near six-year high in October largely on energy prices and the unemployment rate was at its lowest since 2008, despite the economy growing at the slowest pace in four years. Inflation rose to 2.2% in October from 2.1% in September. Separately, France's consumer price inflation was steady in October, after easing in the previous month. As per preliminary data from the statistical office INSEE, the consumer price index rose 2.2% year-on-year, same as in September. The street also got cautious as UK consumer confidence weakened as expected in October. The market research firm GfK reportedly said that the consumer sentiment index dropped to (-) 10 in October from (-) 9 in September. Asian markets ended mixed, as China's manufacturing sector expanded only slightly in October, as output remained broadly unchanged amid marginal increase in new business. The survey data from IHS Markit showed that the Caixin Purchasing Managers' Index came in at 50.1 in October versus 50.0 in September.

Back home, pharmaceutical industries stocks ended lower, despite India Ratings and Research (Ind-Ra) in its latest report said that pharmaceutical industry in India is likely to register higher margins in Q2 (July- September) of 2018-19 on a year-on-year basis, on the back of rupee’s depreciation against the US dollar. Further, stocks related to financial sector remained in lime light, after Industry chamber Ficci said that more measures are needed to make adequate liquidity available in the system and strengthen the financial sector for attaining 8 per cent plus GDP growth, while infrastructure stocks were in focused, with Niti Aayog CEO Amitabh Kant stating that India will need around $4.5 trillion till 2040 for development of infrastructure sector in the country. He further stated that there is an urgent need to restructure entire existing public private partnership (PPP) framework as there are delays in completion of infrastructure projects due to disputes.

Finally, the BSE Sensex fell 10.08 points or 0.03% to 34,431.9705, while the CNX Nifty was down by 6.15 points or 0.06% to 10,380.45.

The BSE Sensex touched a high and a low of 34,679.93 and 34,303.38, respectively and there were 15 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index.

The broader indices ended in green; the BSE Mid cap index gained 1.10%, while Small cap index up by 1.09%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.34%, Realty up by 2.27%, Industrials up by 1.71%, Basic Materials up by 1.64% and Metal up by 1.29%, while IT down by 1.78%, TECK down by 1.60%, FMCG down by 0.65%, Healthcare down by 0.64% and Telecom down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 8.35%, Axis Bank up by 3.51%, Indusind Bank up by 2.84%, Larsen & Toubro up by 2.65% and SBI up by 1.85%. On the flip side, Infosys down by 2.90%, Coal India down by 1.90%, NTPC down by 1.85%, Sun Pharma down by 1.31% and Mahindra & Mahindra down by 1.06% were the top losers.

Meanwhile, in order to really improve overall economic growth and community well being, Niti Aayog CEO Amitabh Kant said India will need around $4.5 trillion till 2040 for development of infrastructure sector in the country. He further stated that there is an urgent need to restructure entire existing public private partnership (PPP) framework as there are delays in completion of infrastructure projects due to disputes.

Besides, he pointed out that the government has been focussing on the infrastructure sector. Track record of the last four years has shown that all spending in the infrastructure sector across railways, airports and road came from the government.

Additionally, Kant said India is growing at the rate of 7.5% per annum and challenge is to grow at higher rates. Therefore, the country needs to focus on building quality infrastructure.  He also highlighted that the cost of transportation in India is very high. Besides, he noted that there is a pressing need of leveraging alternate and newer source of financing of infrastructure projects.

The CNX Nifty traded in a range of 10,441.90 and 10,341.90. There were 25 stocks advancing against 24 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Yes Bank up by 9.30%, Hindalco up by 4.88%, Axis Bank up by 4.26%, BPCL up by 3.96% and UPL up by 3.57%. On the flip side, HCL Tech. down by 3.80%, Tech Mahindra down by 3.21%, Dr. Reddy’s Lab down by 3.03%, Infosys down by 2.83% and CIPLA down by 2.12% were the top losers.

European markets were trading mixed; France’s CAC gained 20.63 points or 0.4% to 5,114.07 and Germany’s DAX was up by 77.22 points or 0.67% to 11,524.73, while UK’s FTSE 100 was down by 9.35 points or 0.13% to 7,118.75.

Asian markets ended mixed on Thursday as investors reacted to the latest corporate earnings results, upbeat private-sector job growth data from the US and disappointing Chinese data. Chinese shares ended slightly higher as hints of more stimulus helped outweigh disappointing data. The assurance came as survey data from IHS Markit showed that China's manufacturing sector expanded only slightly in October. The Caixin Purchasing Managers' Index came in at 50.1 in October versus 50.0 in September, as output remained broadly unchanged amid marginal increase in new business.