Markets witness bloodbath in early deals

Bears took full control over Dalal Street in early deals on Monday with frontline gauges declining below their crucial 35,100 (Sensex) and 10,550 (Nifty) levels. Sentiments remained downbeat on weak global cues amid US-China trade tensions. 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.

Global cues too remained sluggish with all the Asian markets trading in red at this point of time on worries over slowing growth and fears that a fresh flare-up in tensions between Washington and Beijing could quash any chances of a trade deal. The US markets extended their losses for third straight session and ended sharply lower on Friday on weaker-than-expected jobs report and China-US trade tensions.

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. In scrip specific developments, Ashoka Buildcon soared on receiving LoA from Rail Vikas Nigam and   Khadim India gained on raising Rs 30 crore via Commercial Paper.

The BSE Sensex is currently trading at 35063.10, down by 610.15 points or 1.71% after trading in a range of 35016.08 and 35246.97. All the 31 stocks are declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.87%, while Small cap index was down by 1.90%.

The top losing sectoral indices on the BSE were Energy down by 3.17%, Realty down by 2.77%, Power down by 2.48%, Utilities down by 2.28% and Basic Materials was down by 2.03%, while there were no gainers on the BSE sectoral front.

The top losers on the Sensex were Reliance Industries down by 3.84%, Adani Ports & SEZ down by 3.13%, Coal India down by 3.04%, Power Grid Corporation down by 2.99% and Asian Paints down by 2.48%, while there were no gainers on the Sensex.

Meanwhile, raising concerns over India’s fiscal position, the Reserve Bank of India (RBI) in its preliminary balance of payments (BoP) data has showed that the country’s current account deficit (CAD) widened to 2.9% of Gross Domestic Product (GDP) in the July-September quarter (Q2) of the current fiscal year as compared to 1.1% in the year-ago period. It added that CAD expanded mainly due to a large trade deficit.

According to the data, the CAD, or the difference between outflow and inflow of foreign exchange in the country's current account, was $19.1 billion during the quarter ended September 30, 2018, higher as compared to $6.9 billion or 1.1% of GDP in Q2FY18. The CAD stood at $15.9 billion (2.4% of GDP) in the April-June quarter (Q1). In first half of 2018-19 (H1FY19), the CAD has increased to 2.7% of GDP from 1.8% in the corresponding period of 2017-18 on the back of widening of the trade deficit.

The Central Bank said the widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit at $50 billion as compared to $32.5 billion a year ago. The data also revealed that net services receipts increased by 10.2% on a y-o-y basis, mainly on the back of a rise in net earnings from software and financial services. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $20.9 billion during the quarter, increasing by 19.8% from their level a year ago. In the financial account, net foreign direct investment at $7.9 billion in Q2FY19 moderated from $12.4 billion in the similar period of last fiscal.

RBI said portfolio investment recorded net outflow of $1.6 billion as compared to an inflow of $2.1 billion in the second quarter last year on account of net sales in both the debt and equity markets. Further, net receipts on account of non-resident deposits increased to $3.3 billion in Q2FY19 from $0.7 billion a year ago. In July-September this fiscal, there was a depletion of $1.9 billion of the foreign exchange reserves (on BoP basis) as against an accretion of $9.5 billion in the year ago period.

The CNX Nifty is currently trading at 10512.30, down by 181.40 points or 1.70% after trading in a range of 10486.00 and 10558.85. There were 1 stock advancing against 49 stocks declining on the index.

The lone gainer on Nifty were Indusind Bank up by 0.14%. On the flip side, Reliance Industries down by 3.86%, Ultratech Cement down by 3.62%, Indiabulls Housing down by 3.58%, Power Grid Corporation down by 3.07% and Adani Ports & SEZ down by 3% were the top losers.

All the Asian markets are trading in red; Nikkei 225 tumbled 478.37 points or 2.21% to 21,200.31, Straits Times declined 42.74 points or 1.37% to 3,068.38, Hang Seng dropped 366.87 points or 1.41% to 25,696.89, Taiwan Weighted fell 105.35 points or 1.08% to 9,655.53, KOSPI shed 28.47 points or 1.37% to 2,047.29, Jakarta Composite slipped 23.81 points or 0.39% to 6,102.55 and Shanghai Composite was down by 21.99 points or 0.84% to 2,583.90.