Post Session: Quick Review

Indian equity benchmarks witnessed complete bloodbath on Thursday with frontline gauges settling below their crucial 35,400 (Sensex) 10,650 (Nifty) levels amid weak global cues. It turned-out to be a daunting day of trade for domestic markets where key gauges made a gap-down opening and extended their southward journey till end. Sentiments remained downbeat with Fitch Ratings revising downwards India’s GDP growth forecast to 7.2 per cent for current fiscal citing higher financing cost and reduced credit availability. In its Global Economic Outlook, Fitch projected that for 2019-20 and 2020-21 financial years, India's GDP growth will be 7 per cent and 7.1 per cent respectively. The rating agency has also forecasted Indian rupee to weaken to 75 to a dollar by end of 2019. Some concerns also came with a private report stating that officers of the indirect tax department have started issuing preliminary notices to captive units of multinationals and Indian companies exporting offshore support services.

Traders failed to take any sense of relief with Finance Minister Arun Jaitley’s statement that India, among the world's fastest growing emerging economies, is likely to maintain the ‘high growth rate’ of 7-8 per cent over the next decade. He emphasized that landmark reforms such as the Insolvency and Bankruptcy Code offer an attractive and conducive environment to foreign investors to the country. Market participants also ignored report that the Union Cabinet is expected to approve a policy to boost exports of agriculture commodities such as tea, coffee and rice and increase the country’s share in global agri trade. The proposed policy would focus on all aspects of agricultural exports including modernising infrastructure, standardisation of products, streamlining regulations, curtailing knee-jerk decisions, and focusing on research and development activities.

Selling got intensified and markets ended near intraday lows, as Eurozone’s private sector growth was the lowest in more than two years during November, led by Germany, though the pace of slowdown was less than what was estimated initially. The final Eurozone Composite purchasing managers' index fell to 52.7 from October's 53.1. Asian markets ended in red with technology firms in Hong Kong and Shanghai battered after the arrest of a top executive at Chinese telecoms giant Huawei that has also fuelled fears about the recent China-US trade deal.

Back home, Non-banking finance companies’ (NBFCs) stocks ended in red with Crisil’s report that difficulties in getting funding will halve the non-bank lenders’ asset growth to around 10% in the second half of the current fiscal. It added that the asset quality of retail loans is resilient, but the NBFCs’ non-retail book has to be monitored for potential stress. Port sector stocks edged lower despite report that rating agency ICRA maintained stable year-end outlook for the port sector, terming rebound in coal volumes and steady progress on the Sagarmala project positive for Indian port sector players in the medium term.

The BSE Sensex ended at 35312.13, down by 572.28 points or 1.59% after trading in a range of 35266.76 and 35707.23. There was 1 stock advancing against 30 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.54%, while Small cap index was down by 1.36%. (Provisional)

The losing sectoral indices on the BSE were Energy down by 2.35%, Auto down by 2.26%, Realty down by 2.26%, Telecom down by 2.11%, Consumer Discretionary Goods & Services was down by 1.83%. (Provisional)

The lone gainer on the Sensex was Sun Pharma up by 1.57%. On the flip side, Maruti Suzuki down by 4.63%, Tata Motors down by 4.02%, Tata Motors - DVR down by 3.78%, Yes Bank down by 3.08% and Reliance Industries down by 2.72% were the top losers. (Provisional)

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 ended at 10601.15, down by 181.75 points or 1.69% after trading in a range of 10588.25 and 10722.65. There were 2 stocks advancing against 47 stocks declining on the index. (Provisional)

The only gainers on Nifty were Sun Pharma up by 1.74% and JSW Steel was up by 0.34%. On the flip side, Indiabulls Housing down by 5.54%, Maruti Suzuki down by 4.56%, Tech Mahindra down by 4.19%, Bajaj Finserv down by 3.98% and Tata Motors down by 3.87% were the top losers. (Provisional)

European markets are trading in red; FTSE 100 tumbled 177.49 points or 2.63% to 6,744.35, CAC 40 dropped 120.82 points or 2.50% to 4,823.55 and DAX was down by 260.91 points or 2.39% to 10,939.33.

Asian markets ended in red on Thursday as the arrest of a senior Huawei executive over potential violation of US sanctions on Iran raised more questions about the Trump administration's overall China strategy. The recent drop in US 10-year Treasury yields, Brexit-related uncertainty and caution ahead of a crucial meeting of the Organization of Petroleum Exporting Countries also weighed on markets. Japanese shares closed lower, with chip-related stocks coming under heavy selling pressure. Meanwhile, Tech stocks paced the declines on concerns that they might be hurt seriously in view of security concerns over the Chinese telecoms group Huawei.  On economic front, Bank of Japan Governor Haruhiko Kuroda told parliament that economic risks from abroad could be severe and the central bank would respond appropriately as needed. Seoul stocks ended sharply lower on skepticism about the U.S.-China trade deal.