Post Session: Quick Review

Monday turned-out to be a daunting day of trade for Indian equity benchmarks with frontline gauges shaving off around two percent to settle below their crucial 35,000 (Sensex) and 10,500 (Nifty) levels, as sentiments remained downbeat on weak global cues amid US-China trade tensions. Markets made a gap-down opening as traders remained cautious ahead of the election results outcome of the five major states - Chhattisgarh, Madhya Pradesh, Mizoram, Telangana and Rajasthan - on December 11. The exit polls for five states showed that Prime Minister Narendra Modi’s popularity is in doubt going into 2019 election. Traders reacted negatively to a report that foreign investors have pulled put close to Rs 400 crore from the Indian stock market in the last five trading sessions amid weakness in global equities due to the arrest of a high-profile Chinese executive. Market participants remained concerned about the Reserve Bank of India’s (RBI) data showing that India’s current account deficit (CAD) widened to 2.9% of the Gross Domestic Product (GDP) in the second quarter of the fiscal compared to 1.1% in the year-ago period, mainly due to a large trade deficit.

Adding some anxiety on the street, former chief economic advisor Arvind Subramanian said that the new gross domestic product back-series data, released late last month by the Central Statistics Office and NITI Aayog, raised a lot of questions and hurt the credibility of official data. Traders ignored better than expected direct tax collections data. As per the data released by finance ministry, revenue from direct tax grew 14.7 percent to Rs 5.51 lakh crore in the first eight months of the current financial year 2018-19 (April-March). Traders shrugged off RBI’s weekly statistical supplement showing that India’s foreign exchange (forex) reserves rose by $932.8 million during the week ended November 30. Also, traders failed to get any sense of relief with IMF’s Chief Economist Maurice Obstfeld’s statement that India’s growth has been very solid over the past four years and he praised the fundamental economic reforms like the GST and the Insolvency and Bankruptcy Code carried out by the government.

Selling got intensified after European markets made a weak opening as Eurozone's economic growth rate halved in the third quarter as estimated initially. The latest figures from the Eurostat showed that gross domestic product grew 0.2 percent from the second quarter, when it increased 0.4 percent. All the Asian markets ended in red, as trade worries resurfaced after White House trade adviser Peter Navarro said the Trump administration would raise tariff rates on China if the two countries fail to resolve their issues during the 90-day truce period.

Back home, steel sector stocks edged lower despite the Joint Plant Committee’s (JPC) report showing that India’s crude steel output grew 3.8% to 8.92 million tonne (MT) in November 2018 as compared to 8.60 MT crude steel produced during the same period a year ago. Coal sector stocks remained under pressure with a private repro that India’s coal import rose 9.7% to 156.08 MT in the April-November period of the ongoing fiscal, as against 142.25 MT in the corresponding months a year ago. Select stocks related to auto sector edged lower on report that domestic passenger vehicle sales declined 3.43 per cent to 266,000 units in November from 275,440 units in November 2017. Domestic car sales were down marginally to 179,783 units as against 181,435 units in November 2017.

The BSE Sensex ended at 34959.72, down by 713.53 points or 2.00% after trading in a range of 34915.77 and 35246.97. There were 2 stocks advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index surged 1.84%, while Small cap index was down by 1.84%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 3.15%, Telecom down by 2.73%, Energy down by 2.56%, Capital Goods down by 2.04% and Bankex down by 2.04%, while there were no gainers on the BSE sectoral front. (Provisional)

The only gainers on the Sensex were Coal India up by 0.51% and Maruti Suzuki up by 0.20%. On the flip side, Kotak Mahindra Bank down by 5.87%, Reliance Industries down by 4.35%, Bharti Airtel down by 3.92%, Tata Motors - DVR down by 3.53% and Adani Ports & SEZ down by 3.41% were the top losers. (Provisional)

Meanwhile, the World Bank in its latest report has said that India will retain its position as the world's top recipient of remittances this year with its diaspora sending a whopping $80 billion back home. Report highlighted that India is followed by China ($67 billion), Mexico and the Philippines ($34 billion each) and Egypt ($26 billion).

The report also mentioned that over the last three years, India has registered a significant flow of remittances from $62.7 billion in 2016 to $65.3 billion 2017. In 2017, remittances constituted 2.7% of India's GDP. Besides, it estimates that officially-recorded remittances to developing countries will increase by 10.8% to reach $528 billion in 2018. This new record level follows a robust growth of 7.8% in 2017. Global remittances, which include flows to high-income countries, are projected to grow by 10.3% to $689 billion. Meanwhile, it stated that remittances to South Asia are projected to increase by 13.5% to $132 billion in 2018, a stronger pace than the 5.7% growth seen in 2017.

The upsurge is driven by stronger economic conditions in advanced economies, particularly the US, and the increase in oil prices having a positive impact on outflows from some GCC countries such as the UAE which reported a 13% growth in outflows for the first half of 2018. For the Year 2019, the bank said it is expecting that remittances growth for the region will slow to 4.3% on account of a moderation of growth in advanced economies, lower migration to the GCC and the benefits from the oil price spurt dissipating.

The CNX Nifty ended at 10488.45, down by 205.25 points or 1.92% after trading in a range of 10474.95 and 10558.85. There were 6 stocks advancing against 44 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indian Oil Corporation up by 3.55%, BPCL up by 1.49%, HPCL up by 0.85%, Coal India up by 0.59% and Maruti Suzuki up by 0.50%. On the flip side, Kotak Mahindra Bank down by 6.35%, Indiabulls Housing down by 4.22%, Ultratech Cement down by 3.97%, Reliance Industries down by 3.84% and Adani Ports & SEZ down by 3.83% were the top losers. (Provisional)

European markets are trading in red; FTSE shed 28.36 points or 0.42% to 6,749.75, CAC decreased 23.71 points or 0.49% to 4,789.42 and DAX was down by 64.37 points or 0.60% to 10,723.72.

Asian markets ended in red on Monday as weaker-than-expected US jobs data for November as well as weak data from China and Japan raised fresh concerns over global growth. Brexit-related uncertainty and rising tensions between the US and China over the detention of tech company Huawei's CFO Meng Wanzhou also dented investor sentiment. Chinese shares closed down as weaker-than-expected data on trade pointed to slower global demand. Reports showed China's exports rose 5.4 percent from a year earlier in November, marking the weakest performance since a 3 percent contraction in March. Import growth stood at 3 percent, the slowest since October 2016. Separately, China's consumer inflation and producer price inflation eased in November, giving policymakers more room to loosen fiscal and monetary policies. Further, Japanese shares ended lower on worries over fresh Sino-US trade tensions after White House trade adviser Peter Navarro said the Trump administration would raise tariff rates on China if the two countries fail to resolve their issues during the 90-day truce period. Data showing that the Japanese economy contracted the most in over four years in the third quarter also added to investor worries over slowing global growth. GDP shrank at an annualized rate of 2.5 percent in July-September, worse than an initial estimate of a 1.2 percent contraction, revised data showed.