Markets witness bloodbath on Tuesday

Indian equity bourses witnessed bloodbath on Tuesday, with Sensex & Nifty plunging around 1.65% each. After a cautious start of the day, key indices remained bearish throughout the day, as the government data showed that India's factory output growth, measured by the Index of Industrial Production, slowed down for second straight month to 2.0% in June 2019 as compared to 7% in June 2018 & it is also lower than 3.1% in May 2019. The slowdown was mainly due to poor performance of the manufacturing & mining sectors and a contraction in the capital goods & consumer durables sectors. Traders also remained on sidelines ahead of Consumer Price Index-based inflation data for July later in the day.

Markets extended their losses in the second half of the trading session to end near their intraday lows points, tracking weak global markets. Market participants were cautious, amid a private report stating that the Reserve Bank of India is unlikely to vote in favour of overseas sovereign bonds at its meeting with the government. The central bank is concerned that signals by overseas bonds could disrupt local bonds, which are controlled by the RBI. The mood of street remained down, even though Finance Minister Nirmala Sitharaman assured industry leaders that the Reserve Bank of India and the government are on the same page as regards to efforts that are required to boost the economy.

On the global front, European markets were trading in red, as Germany's investor confidence dropped sharply in August to its lowest level since the end of 2011. The survey data from the ZEW - Leibniz Centre for European Economic Research showed that the ZEW Indicator of Economic Sentiment for Germany tumbled to -44.1 from -24.5 in July, reaching its lowest level since December 2011. Asian markets ended in red, after Japan's tertiary industry activity fell for the first time in three months in June. The data from the Ministry of Economy, Trade and Industry showed that the tertiary industry activity index edged down 0.1 percent month-on-month in June, which was in line with expectations.

Back home, auto industry stocks ended lower, as data released by the Society of Indian Automobile Manufacturers showed that India's domestic passenger vehicle sales fell for the ninth straight month in July, amid a deepening crisis in the country's automobile sector that has triggered large-scale job losses. Sales of passenger vehicles to car dealers fell 30.9% to 200,790 in July, while commercial vehicles sales fell 25.7% to 56,866 units. Further, oil sector remained in watch, after the Minister of Petroleum and Natural Gas & Steel, Dharmendra Pradhan released the Expression for Interest by National Oil Marketing Companies (IOC, HPCL and BPCL) for procurement of Biodiesel, made from Used Cooking Oil.

Finally, the BSE Sensex lost 623.75 points or 1.66% to 36,958.16, while the CNX Nifty was down by 183.80 points or 1.65% to 10,925.85.

The BSE Sensex touched a high and a low of 37,755.16 and 36,888.49, respectively and there were 03 stocks advancing against 28 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell by 2.25%, while Small cap index was down by 1.42%.

The only gaining sectoral indices on the BSE were Energy up by 5.98% and Oil & Gas up by 1.05%, while Telecom down by 4.34%, Auto down by 3.88%, Capital Goods down by 3.20%, TECK down by 2.76% and Power down by 2.66% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 9.72%, Sun Pharma up by 3.71% and Power Grid up by 0.05%. On the flip side, Yes Bank down by 10.35%, Mahindra & Mahindra down by 6.11%, Bajaj Finance down by 5.72%, Bharti Airtel down by 5.28% and NTPC down by 5.25% were the top losers.

Meanwhile, a joint study carried out by the Confederation of Real Estate Developers Association of India (CREDAI) and CBRE has stated that India's economic transition, workforce expansion and urbanization will offer vast development and investment opportunities for the real estate sector in the next decade, leading to significant growth in housing, office, retail and warehousing space. It also noted that by 2030, the sector would expand immensely, led by new asset classes like coworking, coliving, student housing and real estate investment trusts (REITs).

The report projected that office space stock will touch one billion sq ft by 2030, with flexible workspace accounting for 8-10 percent of the total stock. It also estimated that the retail shopping centre stock will cross 120 million sq ft by 2030, whereas warehousing stock could touch 500 million sq ft by then. It pointed out that by the year 2030, residential real estate has the potential to almost double from the current stock of 1.5 million units in key cities.

According to the report, India continues to remain a high-priority market for long term growth potential as is evident from the increased investment flows in the last few years. It added that the country’s economic growth momentum is steady and it will only grow stronger in the next 10 years, as a result of positive policy reforms and emergence of a strong workforce.

The CNX Nifty traded in a range of 11,145.90 and 10,901.60. There were 05 stocks advancing against 44 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 14.26%, Reliance Industries up by 9.74%, Sun Pharma up by 3.87%, GAIL India up by 1.37% and ZEEL up by 0.37%. On the flip side, Yes Bank down by 10.89%, Bajaj Finance down by 6.07%, Mahindra & Mahindra down by 5.87%, Bajaj Finserv down by 5.54% and Eicher Motors down by 5.35% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 36.92 points or 0.51% to 7,189.80, France’s CAC fell 30.29 points or 0.57% to 5,280.02 and Germany’s DAX was down by 111.67 points or 0.96% to 11,568.01.

Asian markets ended lower on Tuesday as increasingly violent protests in Hong Kong resulted in the cancellation of hundreds of flights in and out of the financial hub, with the overall unrest showing no clear signs of ending. Market sentiments weakened further with uncertainties surrounding the US-China trade war and Argentine President Mauricio Macri's loss in primary elections sent investors scrambling for safe-haven assets such as the yen, gold and bonds. Japanese shares hit a one-week low as traders returned to their desks after a long holiday weekend. Moreover, Chinese shares ended lower after data showed banks extended fewer-than-expected new yuan loans in July. Reports showing Chinese banks extended 1.06 trillion yuan ($150.06 billion) in new yuan loans in July, down from June and falling short of expectations. Meanwhile, investors awaited key reports on retail sales, industrial production and the jobless rate due on Wednesday for further direction.