Post Session: Quick Review

Indian equity benchmarks witnessed a bloodbath for third straight session and ended with heavy losses of over one and half percent, dented by weak global cues and sharp rupee depreciation. Markets traded in negative note since the beginning, as traders were cautious with Care Ratings’ report that the ongoing economic slowdown has started hurting corporates as well, with companies reporting a sharp decline in both revenue and profit growth numbers in the June quarter. India Inc's net sales growth for the June quarter slid to 4.6% as against 13.5% for the same period last year, while the net profit growth moderated to 6.6% as compared to last year's 24.6%. The mood of the markets remain impacted by a private report stated that the government’s net revenue growth from direct taxes has decelerated sharply to 4.7% for April 1-August 15 this year as against a required annual growth rate of 17.3%, reflecting lower buoyancy in the wake of an overall slowdown in the economy.

Key indices continued its free fall during the final hour of trade, as traders reacted negatively to a private report showed that unemployment in India has shot up to a 3-year high of 8.3 per cent, as on August 20. With the urban unemployment rate close to 10%, job seekers in the urban areas are suffering more than those in the rural areas. Traders also were taking note of report that Chief economic advisor K Subramanian called for a ‘mindset change’ in the private sector by desisting from the tendency to grab profit and socialise losses and also seek sops in times of stress. He also said it will be only investment and not consumption that will help the economy grow.

On the global front, Asian markets ended mixed on Thursday, while European markets were trading in red as investors awaited the Federal Reserve chair's speech at a global central bankers' conclave for clues on future rate cuts. Back home, the BSE Sensex ended at 36416.16, down by 644.21 points or 1.74% after trading in a range of 36391.35 and 37087.58. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.25%, while Small cap index was down by 2.14%.(Provisional)

The lone gaining sectoral index on the BSE was IT up by 0.14%, while Realty down by 6.03%, Metal down by 3.60%, PSU down by 2.88%, Oil & Gas down by 2.58% and Bankex down by 2.58% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tech Mahindra up by 1.58%, Hindustan Unilever up by 1.18%, TCS up by 1.15% and HCL Tech. up by 0.09%. (Provisional)

On the flip side, Yes Bank down by 11.93%, Vedanta down by 7.79%, Bajaj Finance down by 4.89%, Tata Motors down by 3.87% and Tata Motors - DVR down by 3.60% were the top losers. (Provisional)

Meanwhile, amid ongoing economic slowdown, Care Ratings in its latest report stated that this slowdown has started hurting corporates as well, with companies reporting a sharp decline in both revenue and profit growth numbers in first quarter of the fiscal year 2019-20 (Q1FY20). India Inc's net sales growth for Q1 slid to 4.6% as against 13.5% for the same period last year, while the net profit growth moderated to 6.6% as compared to last year's 24.6%.

The report, which is based on an analysis of 2,976 companies reporting their quarterly numbers, said that the Q1FY20 has been marked by disappointing and weak corporate earnings indicative of the overall slowdown in various industries and the economy. In what can be termed as a silver lining, the broader economic woes do not seem to have had an impact on the orgnaised sector jobs, as the employee expenses growth continued to be stable. Employees compensation grew 10.6% as compared to the year-ago period.

Care Ratings said it can be noted that GDP growth slid to a five-year low of 5.8% for the March quarter and is widely expected to come lower for the June quarter. There have also been reports of jobless growth and a skewed nature of economic growth, where the ‘have-nots’ are being left behind. From the operating profit growth perspective, the study showed a slide down to 4.1% in June quarter as against double digit growth last year. However, the operating profit margin was stable at about 20% level.

The CNX Nifty ended at 10736.40, down by 182.30 points or 1.67% after trading in a range of 10718.30 and 10908.25. There were 6 stocks advancing against 44 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia Industries up by 2.12%, Tech Mahindra up by 1.52%, Dr. Reddys Lab up by 1.20%, Hindustan Unilever up by 1.03% and TCS up by 0.97%. (Provisional)

On the flip side, Yes Bank down by 12.08%, Vedanta down by 7.61%, Bajaj Finserv down by 5.20%, Indiabulls Housing Finance down by 5.18% and Bajaj Finance down by 4.52% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 41.07 points or 0.57% to 7,162.90, France’s CAC decreased 25.61 points or 0.47% to 5,409.87 and Germany’s DAX decreased 33.78 points or 0.29% to 11,769.07.

Asian markets ended mixed on Thursday as investors awaited the Federal Reserve chair's speech at a global central bankers' conclave for clues on future rate cuts. Meanwhile, the Wall Street has sent warning signs of a possible economic recession ahead as the trade war continues to take a toll on the overall economy. Japanese shares ended flat after reports showed Japanese manufacturing activity shrank for a fourth straight month in August as export orders fell at a sharper pace, while services sector activity expanded at the fastest pace in nearly two years. Chinese shares ended a tad higher despite uncertainty over the outlook for US interest rate cuts following the release of minutes from the Federal Reserve's last policy meeting kept investors on edge, while the Chinese yuan's slump to an 11-year low also sapped their appetite for risk.