Markets end lackluster day near intraday low points

Tuesday turned out to be a lackluster day for the Indian markets, with the Sensex and the Nifty breaching their crucial psychological levels of 35,500 and 10,700, respectively. The key equity indices made a weak opening of day, as SEBI’s data report indicated that the share of foreign portfolio investments (FPI) through participatory notes (P-notes) in domestic capital markets has declined to nine-and-a-half year low of Rs 66,587 crore at the end of October. Domestic sentiments got cautious as SEBI asked listed companies to disclose detailed reasons for delay in submission of financial results to the stock exchanges within one working day of the stipulated deadline. The trade also got affected after a survey by the UK India Business Council (UKIBC) showed that ‘Quality of bureaucracy’ is rated as the weakest component of India’s business environment for the fourth year running. Traders overlooked a report stating that Prime Minister Narendra Modi has set an ambitious deadline of December-end to implement as many business reforms as possible on the ground so that India could break into the top 50 of the World Bank Ease of Doing Business next year.

In the second half of the session, the markets didn’t looked back and continued southward journey to end near their intraday low points, following weak global markets. The street remained pessimistic, on reports that India has slipped two places to rank 53rd on a global annual talent ranking released by IMD Business School Switzerland. The top slot has been retained by the Alpine nation itself. Investors took note of a report which signaled only a temporary truce, stated the Reserve Bank of India (RBI) and the government on Monday agreed to refer to an expert committee the contentious issue of appropriate size of reserves that the RBI must hold, while restructuring of stressed loans of small businesses would be considered by the central bank. Meanwhile, Commerce and Industry Minister Suresh Prabhu has said that development of industrial park rating system would help increase competitiveness of industries and promotion of the manufacturing sector.

On the global front, European markets were trading in red, as Eurozone's current account surplus decreased in September. The figures from the European Central Bank showed that the current account surplus fell to EUR 17 billion from EUR 24 billion in August. In the same month last year, the surplus was EUR 40 billion. On the price front, UK house prices declined sharply in November at the fastest monthly pace in seven years. As per figures from the property market data website Rightmove, average asking prices dropped GBP 5,222 or 1.7 percent month-on-month to GBP 302,023 in November. That was biggest November drop since 2012. Besides, Asian markets ended in red, with investors closely monitored simmering trade tensions after the rivalry between Washington and Beijing overshadowed a summit of Asia-Pacific leaders over the weekend.

Back home, banking stocks ended lower, impacted by Moody's Investors Service’s latest report indicating that the Reserve Bank of India's decision to allow lenders more time to adhere to additional capital buffer norms under Basel 3 is credit negative for the country's state-run banks, while stocks related to airlines industry also ended in red, even though India's civil aviation minister ordered a safety audit of all domestic airlines, including struggling carrier Jet Airways. Further, sugar sector stocks were in limelight with Indian Sugar Mills Association’s (ISMA) statement that sugar production in the country until November 15 has been 1.16 million tonnes, compared to 1.37 million tonnes during the corresponding period last year. Also, stocks related to power sector remained in focus with ICRA’s report that state power distribution companies (discoms) will have to shell out nearly Rs 2,000 crore as one-time compensation towards Goods and Services Tax (GST) impact to solar power developers.

Finally, the BSE Sensex plunged 300.37 points or 0.84% to 35474.51, while the CNX Nifty was down by 107.20 points or 1.00% to 10656.20.

The BSE Sensex touched a high and a low of 35731.67 and 35416.18, respectively and there were 4 stocks advancing against 27 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.02%, while Small cap index was down by 0.92%.

The losing sectoral indices on the BSE were Metal down by 2.82%, Basic Materials down by 1.91%, IT down by 1.74%, TECK down by 1.58% and Healthcare down by 1.57%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Indusind Bank up by 1.34%, Adani Ports & SEZ up by 1.24%, Mahindra & Mahindra up by 0.30% and HDFC Bank up by 0.06%. On the flip side, Yes Bank down by 6.10%, Tata Steel down by 3.21%, Vedanta down by 2.89%, Wipro down by 2.59% and NTPC down by 2.42% were the top losers.

Meanwhile, in a bid to facilitate faster movement of goods and check new indirect tax evasion, the Revenue Department is planning to integrate e-way bill with the National Highways Authority of India’s (NHAI) FASTag mechanism and Delhi-Mumbai Industrial Corridor Development Corporation’s (DMICDC) Logistics Data Bank (LDB) services. The proposal will enhance operational efficiencies across the country’s logistic landscape. It will also help in preventing Goods and Services Tax (GST) evasion by unscrupulous traders who take advantage of the loopholes in the supply chain.

Presently, lack of harmonisation under the ‘track and trace’ mechanism in terms of sharing information among different agencies is affecting the ease of doing business in the country as well as impacting the logistic costs of the companies. Touted as an anti-evasion measure, e-way bill system came into force from April 1, 2018, for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement was rolled out in a phased manner from April 15.

The integration of the e-way bill system with FASTag and LDB is expected to help boost tax collections by clamping down on trade that currently happens on cash basis. The NHAI has put in place the FASTag system for collection of toll electronically on national highways. FASTag also offers non-stop movement of vehicles through toll plazas. Integration of e-way bill with FASTag will help revenue authorities track the movement of vehicles and ensure that they are travelling to the same destination as the transporter or the trader had specified while generating the e-way bill. It will also help the suppliers locate the goods through the e-way bill system. Transporters, too, would be able to track their vehicles through SMS alerts that would be generated at each toll plaza. Similarly, DMIC’s container tracking services, also called LDB programme, would be integrated with the e-way bill to improve the logistics ecosystem.

The CNX Nifty traded in a range of 10,740.85 and 10,640.85. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.79%, Adani Ports & SEZ up by 1.41%, Indusind Bank up by 0.97%, Bajaj Finance up by 0.55% and Zee Entertainment up by 0.49%. On the flip side, Yes Bank down by 6.01%, Hindalco down by 5.91%, Indiabulls Housing Finance down by 3.79%, Dr. Reddy’s Lab down by 3.57% and Wipro down by 3.29% were the top losers.

European markets were trading in red; UK’s FTSE 100 dipped 35.92 points or 0.52% to 6,964.97, France’s CAC fell 42.47 points or 0.86% to 4,942.98 and Germany’s DAX was down by 130.98 points or 1.18% to 11,113.56.

Asian markets ended lower on Tuesday as global growth worries persisted and a sell-off in technology stocks continued on worries about slackening demand. Chinese shares ended lower as investors remained skeptical about the outcome of a meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 summit in Argentina later this month. Further, Japanese shares hit a three-week low, with a sell-off in technology stocks and news of Nissan Chairman Carlos Ghosn's arrest weighing on markets. Meanwhile, the markets in Malaysia and Indonesia are closed in observance of the birth of the prophet Muhammad.