Post Session: Quick Review

Extending their losing streak for second straight session, Indian equity benchmarks ended Wednesday’s trade on a pessimistic note, following heavy selloff in global equities after concerns over US-China trade war resurfaced. Markets traded on a weak note throughout the session, as traders remained concerned with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the country’s economy is likely to bounce back during the fourth quarter at a faster rate to match the overall projection for the current fiscal, but, he added that the economy is unlikely to recover in the third quarter from the slow pace during the last quarter. Some cautiousness also crept in with a private report stating that listed companies accounted for a little less than a third of the corporate tax in FY18, down from nearly 40% in FY17 and 49% a decade ago. Adding to the pain, another private report showed that the sudden move to demonetise a bulk of Indian currency in circulation and the deteriorating agrarian distress in the country have exposed the consequences of financial exclusion.

However, key indices trimmed some losses in the dying hour of trade, as traders found some support with a monthly survey indicating that the country's services sector activity in November expanded at the quickest pace since July, driven by new work orders and favourable market conditions, which in turn led to a continued rise in jobs. The seasonally adjusted Nikkei India Services Business Activity Index rose to a four-month high of 53.7 in November, from 52.2 in October. Some optimism also came in with Engineering Export Promotion Council’s (EEPC) statement that India’s engineering exports are likely to touch $80 billion this fiscal on account of healthy growth in key markets, including the US and Europe. Meanwhile, Reserve Bank of India (RBI) kept the repo rate unchanged at 6.5 per cent in its December policy review. The reverse repo rate has also been maintained at 6.25 per cent.

Asian markets ended lower on Wednesday, while European markets were trading in red, as resurgent trade worries worsened investor fears about global economic growth. Back home, shares of paper companies ended higher amid reports that the government has imposed anti-dumping duty on uncoated copier paper imports from Indonesia, Thailand and Singapore. Telecom sector stocks edged lower with ICRA’s report that the much-anticipated recovery in the telecom sector, backed by restoration of pricing power, may be delayed because intense competition is likely to persist. It added that the recent rupee depreciation and higher diesel prices are likely to have further hurt India’s telecom industry.

The BSE Sensex ended at 35921.63, down by 212.68 points or 0.59% after trading in a range of 35777.81 and 36048.65. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.24%, while Small cap index was down by 1.20%. (Provisional)

The top losing sectoral indices on the BSE were Metal down by 3.82%, Auto down by 2.48%, Basic Materials down by 2.27%, Power down by 2.05% and Healthcare down by 1.95%, while there were no gaining sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.26%, HDFC up by 1.74%, Wipro up by 1.00%, HDFC Bank up by 0.57% and Reliance Industries up by 0.47%. (Provisional)

On the flip side, Sun Pharma down by 5.83%, Tata Motors - DVR down by 3.95%, Tata Steel down by 3.91%, Tata Motors down by 3.81% and Vedanta down by 3.81% were the top losers. (Provisional)

Meanwhile, expressing optimism over economic growth, Niti Aayog Vice Chairman Rajiv Kumar has said that India’s economy is likely to bounce back during the fourth quarter at a faster rate to match the overall projection for the current fiscal. However, he said the economy is unlikely to recover in the third quarter from the slow pace during the last quarter.

On the overall Gross Domestic Product (GDP) growth of India during the current financial year (FY19), Kumar said Niti Aayog has not done its own projection yet. He added that ‘I think it will be around the same figure as projected by the Reserve Bank, which will be 7.4-7.5%’.

India’s growth in the July-September quarter slipped to 7.1% from 8.2% in the April-June quarter as consumption demand moderated and farm sector displayed signs of weakness. The growth in Q2FY19 was the lowest in three quarters but better than 6.3% in the same period of the previous year, helping the country retain the tag of the world’s fastest-growing major economy, ahead of China.

The CNX Nifty ended at 10791.10, down by 78.40 points or 0.72% after trading in a range of 10747.95 and 10821.05. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 2.51%, HDFC up by 1.81%, Bharti Infratel up by 1.63%, HCL Tech. up by 1.13% and HDFC Bank up by 0.77%. (Provisional)

On the flip side, Sun Pharma down by 6.13%, Hindalco down by 5.01%, Tata Steel down by 4.16%, Vedanta down by 3.81% and Tata Motors down by 3.76% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 75.06 points or 1.08% to 6,947.70, France’s CAC fell 46.82 points or 0.94% to 4,965.84 and Germany’s DAX dipped 100.56 points or 0.9% to 11,234.76.

Asian markets ended lower on Wednesday amid concerns over trade and worrying signals of economic health after the difference between three- and five-year US Treasury yields dropped below zero. Traders were skeptical around the Trump-Xi agreement announced over the weekend. In China, traders paid little attention to encouraging services data. The services sector in China continued to expand in November, and at an accelerated rate, the latest survey from Caixin revealed with a PMI score of 53.8. That beat expectations for 50.8, which would have been unchanged from the October reading. While, the latest survey from Nikkei showed that the services sector in Japan continued to expand in November, albeit at a fractionally slower pace with a PMI score of 52.3, down from 52.4 in October. Chinese shares ended lower as investor doubts mounted over whether China and the United States will be able to settle their trade dispute before the 90-day deadline expires, and as new data showed a worsening business outlook. Further, Japanese shares fell after a plunge on Wall Street overnight on growth and trade concerns.