Post Session: Quick Review

Extending their losing streak for second straight session, Indian equity benchmarks ended Wednesday’s trade on a pessimistic note, following a continued sell-off in US equities amid concerns about global slowdown. Key indices opened in the green but quickly slipped into the red, as traders turned cautious with domestic rating agency Icra’s report stating that after the strong upswing in April-June quarter of current financial year (FY19), GDP growth for July-September quarter is expected to dip to 7.2 percent on account of sluggishness in agriculture and industry. The GDP had grown by a higher than expected 8.2 per cent in the first quarter of FY19 as compared to the year-ago period. Sentiments also got spooked with report that India's crude oil imports in October rose to their highest level in at least more than seven years. Crude imports in October climbed 10.5 per cent from a year earlier to 21.02 million tonnes.

Market sentiments were further dampened with a private report stating that foreign investors continuing their selling spree in the September quarter, pulled out $900 million from the Indian equity market on widening current account deficit due to a surge in oil prices and depreciating rupee. Traders took note of report that the government intends to impose higher penalties on companies if they fail to report cases of a data breach of Indian users to concerned authorities However, further fall in the domestic markets got restricted as traders found some solace with the Finance Ministry confident of achieving the disinvestment target of Rs 80,000 crore set for the current fiscal. Any shortfall in disinvestment target would only further worsen the fiscal deficit situation, weakening investor confidence.

On the global front, Asian markets ended mixed on Wednesday. European markets were trading in green, as investors returned to the market amid optimism of a compromise over Italy’s budget. Back home, banking stocks ended in red despite the Reserve Bank of India stating that Indian banks may get a reprieve of about Rs 13,400 crore in capital exemption. The biggest beneficiary of this would be the government, because the RBI decision would lessen the burden on it to bridge a capital shortage at several state-run banks. Besides, sugar stocks were in sweet spot with private report that India poised to topple Brazil as the world's biggest sugar producer.

The BSE Sensex ended at 35204.09, down by 270.42 points or 0.76% after trading in a range of 35112.49 and 35494.25. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 0.08%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.64%, Healthcare up by 1.04%, Consumer Durables up by 0.81%, Telecom up by 0.58% and Bankex up by 0.55%, while IT down by 2.89%, TECK down by 2.45%, Energy down by 1.35%, Power down by 1.08% and Metal down by 0.85% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 2.78%, Axis Bank up by 2.18%, Adani Ports &Special up by 2.09%, Asian Paints up by 1.42% and SBI up by 1.29%. (Provisional)

On the flip side, TCS down by 3.45%, Infosys down by 3.17%, Power Grid down by 2.90%, Wipro down by 2.55% and Reliance Industries down by 2.30% were the top losers. (Provisional)

Meanwhile, domestic rating agency Icra in its latest report has said that GDP growth for second quarter of current financial (Q2FY19) is expected to dip to 7.2% on account sluggishness in agriculture and industry. The fall in the growth number will be mainly due to a pull down from industry where growth is expected to slow down to 7.1% in the in second quarter as compared to 10.3% in first quarter and the farm sector, which may slow down to 3.5% from 5.3%. The GDP had grown by a higher than expected 8.2% in the first quarter of the current financial year as compared to the year-ago period.

The report further highlighted that higher fuel prices and the weak rupee were pointed out as the primary factors dragging the industrial growth, while an uneven and sub-par monsoon, flooding in some areas amid a late withdrawal of the monsoon rains, and instances of crop damage and pest attacks will impact the farm sector.

Besides, Icra’s principal economist Aditi Nayar stated that pre-tax margins for companies have declined on a quarter-on-quarter basis because of a rise in the input and energy costs and the rupee depreciation.  Moreover she added “Overall, we expect manufacturing GVA (gross value added) growth to ease to 7.0% in Q2FY19 from the healthy 13.5% expansion in Q1FY19”.

The CNX Nifty ended at 10600.05, down by 56.15 points or 0.53% after trading in a range of 10562.35 and 10671.30. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddys Lab up by 6.77%, Grasim Industries up by 3.22%, Yes Bank up by 3.20%, Bajaj Finserv up by 3.17% and UPL up by 2.90%. (Provisional)

On the flip side, Power Grid down by 3.56%, Infosys down by 3.52%, TCS down by 3.42%, Tech Mahindra down by 2.75% and HCL Tech. down by 2.42% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 52.80 points or 0.75% to 7,000.72, France’s CAC rose 26.81 points or 0.54% to 4,951.70 and Germany’s DAX added 79.60 points or 0.71% to 11,146.01.

Asian markets ended mixed on Wednesday, with Chinese and Hong Kong markets finishing modestly higher while markets elsewhere across the region closed mostly lower on worries about corporate earnings and slowing global growth. Japanese shares ended modestly lower after reaching three-week lows earlier in the day amid falling oil prices and worries about weak global growth.