Markets witness steep fall; Sensex breaches 35,200 mark

It was another terrible day for the Indian markets, as the Sensex and Nifty has witnessed steep fall during Wednesday’s trading session. The key Indices made a cautious start, as anxiety spread among traders with domestic rating agency ICRA’s report 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. Trade remained weak during the whole day, as a private report stating that continuing their selling spree in the September quarter, foreign investors pulled out $900 million from the Indian equity markets on widening current account deficit due to a surge in oil prices and depreciating rupee. The market participants also took note of reports 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.

Traders were worried with another 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. The street failed to get any sense of relief with Employment Provident Fund Organisation’s (EPFO) latest Net Payroll Data report showing that India reported over 2 fold jump at 9.73 lakh new job creations in the month of September 2018 as compared to 4.11 lakh jobs in the corresponding month last year. Traders even shrugged off a report stating that small business sentiment was largely intact in quarter ending September despite macro headwinds including rising crude oil prices and falling rupee. However, indices managed to cut a little of their losses to come off their day’s low points, taking support from reports that the Finance Ministry is 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 side, European markets were trading in green, despite reports that Germany’s industrial producer prices rose at the fastest pace in 18 months during October. The figures from the Federal Statistical Office showed that producer prices rose 3.3 percent year-on-year following a 3.2 percent increase in September. Meanwhile, France's jobless rate was unchanged in the third quarter from the previous three months. As per preliminary data from INSEE, the ILO unemployment rate for the metropolitan France was 8.8 percent, unchanged from the second quarter, but was 0.5 points lower than a year ago. The number of unemployed rose by 22,000 sequentially to 2.6 million persons. Asian markets ended mixed, as investors fret about slowing global growth and the outlook for corporate earnings.

Back home, selected stocks of oil industry ended higher, buoyed by Fitch Ratings’ latest report showing that India’s Oil Marketing Companies (OMCs) are likely to invest between $35 billion and $40 billion over the next five years in capacity expansion and refinery upgradation to meet the new emission standards in 2020. Further, sugar stocks were in sweet spot amid private report that India poised to topple Brazil as the world's biggest sugar producer, while banking sector stocks remained in focus on report that the Reserve Bank of India (RBI) estimates that Indian banks will have the capacity to lend an extra 2.5 trillion rupees to 3.0 trillion rupees ($35 billion to $42 billion) over the next year after it decided to relax a deadline for lenders to boost capital ratios.

Finally, the BSE Sensex plunged 274.71 points or 0.77% to 35199.80, while the CNX Nifty was down by 56.15 points or 0.53% to 10600.05.

The BSE Sensex touched a high and a low of 35494.25 and 35112.49, respectively and there were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.64%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were Realty up by 1.53%, Healthcare up by 1.04%, Consumer Durables up by 0.75%, Telecom up by 0.62% and Bankex up by 0.55%, while IT down by 2.92%, TECK down by 2.47%, Energy down by 1.39%, Power down by 1.04% and Metal down by 0.78% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.83%, Axis Bank up by 2.20%, Adani Ports & SEZ up by 1.91%, SBI up by 1.24% and Asian Paints up by 1.18%. On the flip side, TCS down by 3.51%, Infosys down by 3.14%, Power Grid Corporation down by 2.77%, Wipro down by 2.38% and Reliance Industries down by 2.31% were the top losers.

Meanwhile, the Retirement fund body, Employment Provident Fund Organisation (EPFO) in its latest ‘Net Payroll Data’ has showed that India reported over 2 fold jump at 9.73 lakh new job creations in the month of September 2018 as compared to 4.11 lakh jobs in the corresponding month last year. The data also showed that around 79.48 lakh new subscribers were added to social security schemes of the EPFO from September 2017 to September 2018. This indicates that these many jobs were created in the last 13 months.

As per the report, the maximum jobs were created in the age bracket of 18-21 and in this bracket the top 10 sectors which have created more fresh jobs include Expert Services, Trading - Commercial Establishments, Electric-Mechanical-or General Engineering Products, Building & Construction Industry, Engineers- Engineering Contractors, establishments engaged in Manufacturing- Marketing Servicing- Usage of Computers, Textiles, Garments making, establishment engaged in Cleaning and Sweeping Services and Hospitals. In the similar age bracket, Maharashtra was the first among the States to create maximum payroll, followed by Tamil Nadu, Karnataka, Gujarat, and Haryana.

According to the data report, 7139 new jobs were created in less than 18 age group category, while 269491 jobs in 18-21 age group category. Further, 22-25 age, 26-28 age, 29-35 age and more than 35 age group category witnessed 267562, 121240, 160666 and 147676 new payrolls, respectively in September 2018.

The CNX Nifty traded in a range of 10,671.30 and 10,562.35. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 6.44%, Grasim Industries up by 3.47%, Yes Bank up by 3.28%, Bajaj Finserv up by 3.15% and UPL up by 2.87%. On the flip side, TCS down by 3.47%, Infosys down by 3.41%, Power Grid Corporation down by 3.40%, Tech Mahindra down by 2.54% and HCL Tech. down by 2.44% were the top losers.

European markets were trading in green; UK’s FTSE 100 added 52.80 points or 0.75% to 7,000.72, France’s CAC surged 26.81 points or 0.54% to 4,951.70 and Germany’s DAX was up by 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.