Benchmarks continue to trade in red zone

Indian equity benchmarks continued their weak trade in early noon session amid weak global clues. Further, sentiments were too downbeat with Credit rating agency Fitch, which cut India's economic growth forecast sharply to 7.2 per cent from 7.8 per cent earlier for FY19 citing weakening of credit and dollar strength as factors weighing on emerging markets. Moreover, traders remained concerned with a private report stating that all countries will lose in a global trade war, the World Trade Organisation, acknowledged that reforms are needed, but rejected criticism that trade is the main cause of job losses. All indices on BSE were trading in red with Realty becoming top loser down by around 2.66% followed by auto and consumer durables stocks.

On the global front, Asian markets were trading in red, as investors were bombarded by a perfect storm of problems that erased the positivity seen at the start of the week. Back home, welcoming the Reserve Bank of India's (RBI) decision to keep the repo rate unchanged, real estate industry said the move is likely to reinforce confidence in home buyers resulting in improved sales.

The BSE Sensex is currently trading at 35513.13, down by 371.28 points or 1.03% after trading in a range of 35468.12 and 35707.23. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.28%, while Small cap index was down by 1.24%.

The top losing sectoral indices on the BSE were Realty down by 2.66%, Auto down by 1.82%, Consumer Durables down by 1.75%, Telecom down by 1.73% and Consumer Disc was down by 1.66%, while there were no gainers on the sectoral indices.

The top gainers on the Sensex were Sun Pharma up by 1.28%, Power Grid Corpn. up by 0.44%, Tata Steel up by 0.39%, NTPC up by 0.18% and TCS was up by 0.11%. On the flip side, Maruti Suzuki down by 4.29%, ONGC down by 2.37%, Kotak Mahindra Bank down by 1.92%, Asian Paints down by 1.90% and Yes Bank was down by 1.90% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) retaining its Gross Domestic Product (GDP) growth forecast of 7.4% for the current fiscal year (FY19) has said that the India’s economic growth will accelerate further to 7.5% in the first half of next fiscal year (H1FY20), on the back of acceleration in investment activity. It added that the GDP growth in April-September period of FY19 has been broadly in line with RBI projection of 7.4% for full fiscal. Besides, the country’s economic growth fell to 7.1% in the July-September of the current fiscal, from 8.2% in the April-June period.

Stating that acceleration in investment activity bodes well for the medium-term growth potential of the economy, the RBI called for strengthening of macroeconomic fundamentals. It also said that the time is apposite to further strengthen domestic macroeconomic fundamentals. In this context, fiscal discipline is critical to create space for and crowd in private investment activity. It further said credit offtake from the banking sector has continued to strengthen even as global financial conditions have tightened. FDI flows could also increase with the improving prospects of the external sector.

The Central Bank said going forward lower rabi sowing may adversely affect agriculture and hence rural demand. Financial market volatility, slowing global demand and rising trade tensions pose negative risk to exports. However, on the positive side, it noted that the decline in crude oil prices is expected to boost India's growth prospects by improving corporate earnings and raising private consumption through higher disposable incomes. The price of Indian basket of crude oil fell below $60 to a barrel by end November, from $85 to a barrel in early October.

The CNX Nifty is currently trading at 10654.90, down by 128.00 points or 1.19% after trading in a range of 10641.60 and 10722.65. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.65%, Power Grid Corporation up by 0.46%, NTPC up by 0.14% and TCS was up by 0.06%. On the flip side, Indiabulls Housing down by 5.11%, Maruti Suzuki down by 4.32%, Tech Mahindra down by 3.76%, Zee Entertainment down by 2.52% and ONGC was  down by 2.40% were the top losers.

All Asian markets were trading in red, Nikkei 225 fell 448.15 points or 2.09% to 21,471.18, Taiwan Weighted lost 232.02 points or 2.4% to 9,684.72, Hang Seng declined 726.36 points or 2.78% to 26,093.32, Straits Times tumbled 39.85 points or 1.28% to 3,116.07, Shanghai Composite dropped 40.80 points or 1.56% to 2,609.01, KOSPI decreased 33.35 points or 1.61% to 2,067.96 and Jakarta Composite was down by 32.21 points or 0.53% to 6,100.91.