Markets witness steep fall on Monday

The Indian benchmarks witnessed steep fall on Monday, with losses of around a percent, ahead of the release of key macroeconomic data. The key indices made a firm start of the week, supported by Reserve Bank of India (RBI) data report that bank credit rose by a healthy 14.41% during the fortnight to October 26, despite the overall increase in lending rates, for first time in over five years. The street was in positive mood, as over Rs 11,900 crore has been released to the states by the Centre from Goods and Services Tax (GST) compensation fund during August-September, after regular and ad-hoc settlement of Integrated GST (IGST) fund. Some support also came with a private report indicating that foreign investors have pumped in nearly Rs 4,800 crore into the Indian capital markets in the last five trading sessions, after pulling out hefty funds in October, amid cooling global crude oil prices and rising rupee. Meanwhile, terming GST as a monumental reform, Finance Minister Arun Jaitley said that the new tax reform had only a transient impact on growth and that too for two quarters.

However, markets soon turned volatile and traded in red for the most part of the session, impacted by Federation of Indian Export Organisation (FIEO) President Ganesh Gupta’s statement that exports of over half of the 30 sectors closely monitored by the Commerce Ministry were in the negative zone in September. Overall exports in September were contracted by 2.15% to $27.95 billion mainly due to the base impact. Some concerns also came among the local traders with former RBI governor Raghuram Rajan’s statement that demonetisation and the GST are the two major headwinds that held back India’s economic growth last year, asserting that the current 7% growth rate is not enough to meet the country’s needs. Adding some anxiety, the RBI cancelled the certificate of registrations of as many as 31 non-banking finance companies (NBFCs) on November 09 for unspecified reasons. Domestic sentiments also got hit with a private report stating that corporate earnings have failed to keep pace with the trajectory of nominal gross domestic product (GDP) over the past 10 years. The combined net profit of listed companies has grown at a compound annual growth rate (CAGR) of 4.1%, against 12.9% growth in India’s GDP at nominal prices during the period.

On the global front, European markets were trading in red, as France's industrial production decreased more-than-expected in September. The data from the statistical office Insee revealed that industrial production logged a monthly drop of 1.8%, in contrast to a 0.2% rise in August. This was the first fall in five months and the biggest since January. Besides, UK industrial production remained flat, while manufacturing output recovered in September. The data from the Office for National Statistics revealed that industrial production remained unchanged for the second straight month in September. Asian markets ended mixed, even if investors were encouraged after the China Securities Regulatory Commission rolled out a series of measures over the weekend to support the private sector.

Back home, auto sector stocks ended lower, even though the Society of Indian Automobile Manufacturers’ (SIAM) data showing that domestic passenger vehicle sales rose 1.55% to 2,84,224 units in October as against 2,79,877 units in the same month last year. Sugar sector stocks remained in sweet spot with report highlighting that sugar mills saddled with surplus stock in India have contracted to export about 8,00,000 tonnes of the sweetener so far to countries like Middle East and Sri Lanka. Further, consumer durables stocks remained in limelight, amid private report stating that this festive season, sales of consumer electronics and white goods grew 12-15% over last year, indicating a return of discretionary spending two years after demonetization.

Finally, the BSE Sensex lost 345.56 points or 0.98% to 34,812.99, while the CNX Nifty was down by 103.00 points or 0.97% to 10,482.20.

The BSE Sensex touched a high and a low of 35,333.22 and 34,756.80, respectively and there were 5 stocks advancing against 26 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index plunged 0.91%, while Small cap index was down by 0.83%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 1.38%, IT up by 0.46% and TECK up by 0.04%, while Auto down by 2.31%, Telecom down by 1.97%, Oil & Gas down by 1.94%, PSU down by 1.92% and Power down by 1.86% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.67%, Kotak Mahindra Bank up by 1.59%, Infosys up by 0.45%, TCS up by 0.32% and Larsen & Toubro up by 0.02%. On the flip side, Tata Motors down by 4.84%, Hero MotoCorp down by 3.82%, Tata Motors - DVR down by 3.10%, Power Grid Corporation down by 2.87% and Maruti Suzuki down by 2.64% were the top losers.

Meanwhile, halting three months of consecutive decline, sales of domestic passenger vehicles (PVs), the largest segment by volumes in the country, increased by 1.55 per cent to 2,84,224 units in October from 2,79,877 units in the corresponding month last year. According to data released by the Society of Indian Automobile Manufacturers (SIAM), car sales grew marginally by 0.38 per cent to 1,85,400 units last month as compared to 1,84,706 units in October last year.

SIAM has pointed out that positive growth in PV sales witnessed in October is reflective of the overall trend in the automobile industry. It noted that overall, the data shows pretty healthy growth and there is a positive movement in the automobile industry. Besides, it showed that motorcycle sales last month grew 20.14 per cent to 13,27,758 units compared to 11,05,140 units in October 2017. It also noted that total two-wheeler sales in October were up 17.23 per cent to 20,53,497 units as against 17,51,608 units in the year-ago period.

The data further indicated the commercial vehicle segment - which includes light, and medium, and heavy vehicles - logged an impressive 24.82 per cent growth to 87,147 units in October as against 69,816 units in the year-ago month. It added that vehicle sales across categories registered a growth of 15.33 per cent to 24,94,426 units from 21,62,869 units in October 2017.

The CNX Nifty traded in a range of 10,645.50 and 10,464.05. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Titan up by 5.99%, Tech Mahindra up by 2.37%, Tata Steel up by 1.93%, Kotak Mahindra Bank up by 1.54% and HCL Tech up by 1.08%. On the flip side, HPCL down by 7.17%, Tata Motors down by 4.58%, Indian Oil Corporation down by 4.55%, Hero MotoCorp down by 4.15% and Hindalco down by 4.06% were the top losers.

European markets were trading mostly in red; France’s CAC lost 8.91 points or 0.17% to 5,097.84 and Germany’s DAX declined 84.05 points or 0.73% to 11,445.11, while UK’s FTSE 100 was up by 18.31 points or 0.26% to 7,123.65.

Asian markets ended mixed on Monday as global growth worries persisted and investors awaited key economic indicators from China due Wednesday for directional cues. Chinese shares ended higher after the China Securities Regulatory Commission rolled out a series of measures over the weekend to support the private sector. Meanwhile, Japanese shares ended little changed amid lack of fresh catalysts after the US midterm elections.