Bears continue to hold grip on markets

Bears continued to hold their grip on Indian equity markets in late afternoon session, with Sensex and Nifty crumbling under pressure, even as the Reserve Bank of India (RBI) kept the repo rate unchanged at 6.50% in its bi-monthly monetary policy. Some concerns also came 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 some worries, 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. The street paid no heed towards Economic Affairs Secretary Subhash Chandra Garg’s statement that the PMI data for November shows overall strong increase in business activity as well as demand and should augur well for economic growth in October-December quarter.

On the sectoral front, agri stocks were buzzing, aided by Union Minister for Chemicals and Fertilisers D V Sadananda Gowda’s statement that the government is prepared to fulfil the complete fertiliser demand of farmers during the ongoing rabi season. Further, realty stocks were trading lower, despite Crisil Ratings’ latest report indicating that residential real estate demand may pick up in the medium-term following improvement in end-user participation on rising affordability, increasing launch of units with mid-income ticket sizes and implementation of RERA.

On the global front, European markets were trading in red, as Eurozone producer price inflation accelerated further in October, defying expectations. The figures from Eurostat showed that producer prices rose 4.9% year-on-year after a revised 4.6% in September. The street had expected the rate to remain unchanged at September's original figure of 4.5%. Asian markets were trading in red, amid concerns over the inversion in the yield curve and confusion surrounding the US-China trade agreement struck between US President Donald Trump and Chinese President Xi Jinping in Argentina.

The BSE Sensex is currently trading at 35858.93, down by 275.38 points or 0.76% after trading in a range of 35829.22 and 36048.65. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.34%, while Small cap index was down by 1.22%.

The top losing sectoral indices on the BSE were Metal down by 3.62%, Basic Materials down by 2.27%, Auto down by 2.12%, Power down by 2.04% and Healthcare down by 1.89%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.42%, HDFC up by 0.75%, HDFC Bank up by 0.14% and Adani Ports & SEZ up by 0.01%. On the flip side, Sun Pharma down by 5.44%, Vedanta down by 3.95%, Tata Motors - DVR down by 3.48%, Tata Steel down by 3.46% and Tata Motors down by 3.41% were the top losers.

Meanwhile, amid an upsurge in demand, India’s services sector activity strengthen further in month of November. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index rose to 53.7 in November from 52.2 in October. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- too improved to 54.5 in November from 53.0 in October.

The survey report found that inflows of new work expanded at a pace not seen for over two years. Further, information & Communication led the increases in, while Real Estate & Business Services was the only category to not see expansion. Besides, Indian service providers continued to add to their payrolls, stretching the current sequence of expansion to 15 months. But, job creation in the manufacturing sector was weaker than recorded in its service counterpart.

On the price front, input cost inflation moderated to a seven-month low, but service providers lifted their selling prices again in the reported month, amid a healthier demand environment. Meanwhile, business sentiment at service providers strengthened in November, boosted by predictions of gradual improvements in market conditions. Likewise, optimism was higher in the manufacturing economy, lifting private sector confidence from October’s 20-month low.

The CNX Nifty is currently trading at 10782.05, down by 87.45 points or 0.80% after trading in a range of 10762.25 and 10821.05. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.62%, HCL Tech up by 1.18%, Bharti Infratel up by 1.10%, HDFC up by 1.03% and Tech Mahindra up by 0.68%. On the flip side, Sun Pharma down by 5.54%, Hindalco down by 4.84%, Vedanta down by 3.71%, Tata Steel down by 3.38% and Tata Motors down by 3.27% were the top losers.

All Asian markets were trading in red; Straits Times decreased 19.41 points or 0.62% to 3,148.38, Nikkei 225 plunged 116.72 points or 0.53% to 21,919.33, Taiwan Weighted declined 166.80 points or 1.68% to 9,916.74, KOSPI fell 13.04 points or 0.62% to 2,101.31, Hang Seng dipped 440.76 points or 1.64% to 26,819.68, Shanghai Composite lost 16.15 points or 0.61% to 2,649.81 and Jakarta Composite was down by 33.41 points or 0.55% to 6,119.45.

All European markets were trading in red; UK’s FTSE 100 dropped 84.63 points or 1.22% to 6,938.13, France’s CAC decreased 49.04 points or 0.99% to 4,963.62 and Germany’s DAX was down by 110.74 points or 0.99% to 11,224.58.