Markets hover near intra-day low points; Power, Utilities stocks drag

Indian bourses added losses in the early noon session with Sensex and Nifty hovering near their intra-day low points due to heavy selling in Power, Utilities and Oil & Gas stocks. Weak rupee and feeble global cues also dented domestic sentiments. Investors remained concerned with report showing that Foreign Institutional Investors (FIIs) sold shares worth Rs 196.9 crore on November 2, 2018, as per provisional data from the stock exchanges. Besides, mid-cap and small-cap indices too were trading in red and the market breadth on the BSE was favoring negative trend. Adding to the woes, ASSOCHAM Secretary General Uday Kumar Varma in view of recent liquidity crisis faced by Indian economy voiced non-banking financial companies (NBFC) industry concerns and the growing unease among the investors and businesses at large. Meanwhile, report stated that the United States is re-imposing punitive measures targeting the Iranian oil and financial sectors in what US Secretary of State Mike Pompeo called ‘the toughest sanctions ever placed’ against Iran.

On the global front, all the Asian markets are trading in red, amid profit-taking after Friday’s surges. Japanese stocks slid following Friday’s declines in the U.S. and amid persistent concerns about rising borrowing costs, U.S.-China trade conflicts and their effects on corporate results. Back home, investors paid no heed to report that activity in India's dominant services sector increased at its fastest pace in three months in October, driven by a strong pick-up in new business.

The BSE Sensex is currently trading at 34859.77, down by 151.88 points or 0.43% after trading in a range of 34,823.77 and 35,123.41. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.51%, while Small cap index was down by 0.41%.

The few gaining sectoral indices on the BSE were Metal up by 0.41%, IT up by 0.13% and Healthcare up by 0.09%, while Power down by 2.19%, Utilities down by 1.44%, Oil & Gas down by 1.13%, Capital Goods down by 0.66% and Energy down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.90%, SBI up by 1.94%, Tata Steel up by 0.99%, Maruti Suzuki up by 0.77% and Coal India up by 0.67%. On the flip side, NTPC down by 3.20%, Power Grid down by 2.26%, Indusind Bank down by 2.10%, Hero MotoCorp down by 1.58% and Adani Ports down by 1.48% were the top losers.

Meanwhile, raising concerns over recent liquidity crisis in non-banking financial companies (NBFC), the industry chamber, Associated Chambers of Commerce and Industry of India (ASSOCHAM) has stated that the Reserve Bank of India (RBI) should provide a liquidity credit line of Rs 30,000-40,000 crore to non-banking financial companies (NBFC) as a temporary relief from tight liquidity conditions.

The chamber's Secretary General Uday Kumar Varma said such steps were essential in view of the current 'liquidity crisis' faced by the Indian economy. He also voiced industry concerns and the growing unease among investors and businesses at large. Varma observed that in view of the liquidity challenges, monetary policy easing by way of lowering interest rates would give the necessary boost to investor confidence. He highlighted that due to the various factors that have triggered this liquidity crunch, beginning with the IL&FS default and measures to keep the rupee from depreciating further, the money markets have seen higher costs of borrowing capital.

Seeking urgent attention to the crisis, Varma appealed for immediate measures to infuse liquidity into the system by RBI. Varma reiterated the need for decisions to be guided by public interest and the requirements of the Indian economy, given that there are multiple trade influences and factors. He highlighted that while the government continues to undertake favourable measures and its progressive policies have catapulted India to the 77th rank in Ease of Doing Business, certain segments such as NBFCs and micro, small and medium enterprises (MSMEs) have been affected by the liquidity crisis. He said this warrants serious attention, given the fact that NBFCs being the strong link between the banks and the MSMEs are under serious stress.

ASSOCHAM noted that for India to transition from being a developing to a developed economy with commensurate norms, it is pertinent that growth of 7-9% be maintained to improve per capita income. It added that this calls for a radical shift towards flexible policies amidst a conducive environment, rather than continuing on a stringent regulatory path. Referring to the demand for a credit line to NBFC's, the chamber said this would provide a fillip to MSMEs and other areas such as infrastructure, employment generation, labour, manufacturing, FMCG, steel and cement consumption, which in turn will create a positive cascading effect leading to employment generation

The CNX Nifty is currently trading at 10490.55, down by 62.45 points or 0.59% after trading in a range of 10480.75 and 10558.80. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.73%, SBI up by 1.93%, HCL Tech up by 1.43%, Tech Mahindra up by 1.25% and Hindalco up by 0.81%. On the flip side, Indiabulls Housing down by 7.06%, Indian Oil Corp. down by 4.89%, NTPC down by 3.42%, HPCL down by 3.41% and BPCL down by 2.93% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 616.730 points or 2.38% to 25,869.62, Shanghai Composite decreased 24.13 points or 0.91% to 2,652.35, Straits Times decreased 56.72 points or 1.85% to 3,059.67, Taiwan Weighted decreased 16.78 points or 0.17% to 9,889.81, Nikkei 225 decreased 344.67 points or 1.57% to 21,898.99, KOSPI decreased 29.58 points or 1.43% to 2,066.42 and Jakarta Composite decreased 8.87 points or 0.15% to 5,897.42.