Markets fall hard on Wednesday; Sensex dips 267 points

Indian equity markets fell hard on Wednesday’s trading session, with Sensex & Nifty plunging by 267 and 98 points, respectively. After a cautious start, key indices traded lackluster throughout the day, amid a private report stating that India's economic growth is set to slow further in the April-June quarter of this year to 5.7 per cent amid contraction in consumption, weak investments and an under-performing service sector. Traders took a note of another report that in a bid to achieve the fiscal deficit target, the government has cut down on its capital expenditure by 80% in February and March. It said the government is contributing to the slowdown rather than uplifting the corporate sector.

Markets extended their losses in the second half of the session to settle near day’s low points. The street overlooked the Retirement fund body, Employment Provident Fund Organisation’s (EPFO) latest ‘Provisional Estimate of Net Payroll’ data report showing that India created 12,23,675 new jobs in the month of June 2019 as against 8,56,870 in May 2019. Also, market participants paid no heed towards the Union Housing and Urban Affairs Minister Hardeep Singh Puri’s statement that the government is set to achieve its target of providing housing for all in 2020 itself, two years before its stated deadline of 2022.

On the global front, European markets were trading in green, as Estonia's producer prices fell in July. The data from Statistics Estonia showed that the producer price index declined 0.2 percent year-on-year in July, after a 0.5 percent rise in June. Prices of mining and quarrying industry grew 6.5 percent annually in July and manufacturing prices remained unchanged. Asian markets ended mixed, after Hong Kong's consumer price inflation remained unchanged in July. The data from the Census and Statistics Department showed that the consumer price index rose 3.3 percent year-on-year in July, which was the same rate as seen in June.

Back home, banking stocks ended lower, as Reserve Bank deputy governor MK Jain slammed banks for poor compliance with regulations and pointed out that high value frauds and fines are a result of their lackadaisical attitude on this. Jain said in some cases, the lack of compliance has been recurring, wherein banks have also ignored RBI's instructions to commit the same mistakes time and again. Further, tea sector stocks remained under pressure with a report that the tea industry has been under severe stress with increasing production costs and stagnating prices, which threatened the long term viability of the sector.

Finally, the BSE Sensex lost 267.64 points or 0.72% to 37,060.37, while the CNX Nifty was down by 98.30 points or 0.89% to 10,918.70.

The BSE Sensex touched a high and a low of 37,406.55 and 37,022.52, respectively and there were 08 stocks advancing against 23 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index declined 1.32%, while Small cap index was down by 1.43%.

The lone gaining sectoral index on the BSE was IT up by 0.16%, while Metal down by 2.92%, Industrials down by 2.24%, PSU down by 2.23%, Basic Materials down by 2.21% and Capital Goods down by 2.17% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.78%, Infosys up by 0.84%, Tech Mahindra up by 0.74%, Hindustan Unilever up by 0.70% and Bajaj Auto up by 0.69%. On the flip side, Tata Motors down by 9.29%, Yes Bank down by 8.21%, Tata Motors - DVR down by 8.01%, Tata Steel down by 4.26% and ONGC down by 3.12% were the top losers.

Meanwhile, in order to improve healthcare in India, Niti Aayog Member (Health) V K Paul has said that there is need to address the challenges of human resources in the sector. He also said ‘the most difficult journey that we face today is about having the right mix, the right numbers, right quality, right skills and the right distribution of human resources in the healthcare sector.’

Paul also observed that there is shortages of doctors and specialists in the country and the crisis in regards of specialists is even more acute. For this, he said the country needs huge participation from the private sector. He also said ‘we will reach one doctor for 1,000 people by the end of the current term of the government that is 2024.’ He felt that this gap in the human resources can only be met through an aggressive partnership between public and private sectors. He added that with the reforms in the health sector, a consortium of private players can now set up a medical college, unlike in the past when a medical college had to be established by a single entity.

About the government’s flagship Ayushman Bharat scheme, Niti Aayog Member said it has provided a way for working together by both public sector and private sector in providing healthcare to the people of the country. He also said most important highlight of scheme is that it has now finally established ‘One India, one nation, one health sector’. Adding further, he said rise in GDP in percentage terms on the healthcare to 2.5 percent is a national commitment and has been reiterated by the country’s leadership. However, he said ‘we must remember when we have to raise the overall spend on healthcare, it has to come from both centre and states.’  

The CNX Nifty traded in a range of 11,034.20 and 10,906.65. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.64%, Maruti Suzuki up by 0.97%, Infosys up by 0.82%, Tech Mahindra up by 0.72% and Eicher Motors up by 0.53%. On the flip side, Tata Motors down by 9.57%, Indiabulls Housing Finance down by 8.94%, Yes Bank down by 8.64%, Grasim down by 4.69% and Tata Steel down by 4.54% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 80.76 points or 1.13% to 7,205.76, France’s CAC rose 80.59 points or 1.51% to 5,425.23 and Germany’s DAX was up by 144.58 points or 1.24% to 11,795.76.

Asian markets ended mixed on Wednesday as investors awaited cues from Fed Chair Jerome Powell's speech at the Jackson Hole symposium on Friday, where he may give a hint on the future direction of US monetary policy. Traders are also keenly waiting on the G7 summit to be held in southwestern France on August 24-26 for clues on what additional steps policymakers will take to bolster growth. Japanese shares ended lower as trade tensions resurfaced between US and China and political uncertainty in Italy and Britain added to concerns over the state of the global economy. Meanwhile, renewed worries about a global recession too weighed on risk assets. Chinese stocks ended flat as Trump toughened his trade rhetoric on Tuesday, saying he had to confront China over trade even if it caused short-term harm to the US economy because Beijing had been cheating Washington for decades.