Markets end lower for yet another day on Thursday

Thursday turned out to be yet another weak day for Indian equity markets, as investors remained on sidelines on the F&O expiry day. The start of the day was negative, amid a private report stating that the Indian economy likely expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand. Domestic sentiments remained lackluster, as slamming decision of the RBI to transfer its excess reserve to the government, bankers' body All India Bank Employees Association (AIBEA) said the apex bank should not be an ‘extension counter’ of the finance ministry and what is happening now is a matter of ‘serious concern’.

Indian key indices remained under the grip of bears during the whole day, despite firm cues from global markets. Markets participants failed to take any sense of relief with the development that the Government relaxed conditions for single-brand retailers having foreign direct investment (FDI) for complying with the mandatory 30% local sourcing regulations by allowing them to adjust all of their purchases to meet this norm. Investors also ignored the Singaporean minister K Shanmugam’s statement that India can explore many opportunities with the Southeast Asian grouping Asean and deepen the trade engagements with the region further.

On the global front, European markets were trading in green, as France's economy grew more than initially estimated in the second quarter. The detailed report from Insee showed that gross domestic product grew 0.3 percent sequentially, instead of 0.2 percent estimated earlier. Asian markets ended mostly higher, despite Japan's consumer confidence weakened to the lowest level in nearly five-and-a-half years in August. The data from the Cabinet Office showed that the consumer confidence index fell to a seasonally adjusted 37.1 in August from 37.8 in July. A similar lower reading was last seen in April 2014. Meanwhile, the index for income growth remained unchanged at 39.5 in August.

Back home, auto stocks ended lower, after Fitch Solutions said that Finance Minister Nirmala Sitharaman's stimulus package for the automobile sector is ‘too little, too late’ to prevent a contraction in vehicle sales & a cut in GST rates together with a vehicle scrappage scheme will be needed to prevent the decline. Metal stocks remained in watch, as ratings agency Moody’s revised its outlook for Indian steel sector to negative, as rising input costs put pressure on the profitability of Asian steel producers. It also said that India's steel demand will remain strongest in Asia but slow to mid-single-digit growth, as weak auto & manufacturing demand offsets the growth in the infrastructure & construction industries.

Finally, the BSE Sensex lost 382.91 points or 1.02% to 37,068.93, while the CNX Nifty was down by 97.80 points or 0.89% to 10,948.30.

The BSE Sensex touched a high and a low of 37,381.80 and 36,987.35, respectively and there were 09 stocks advancing against 22 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.17%, while Small cap index was down by 0.62%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.50%, Metal up by 1.27%, Realty up by 0.45%, Power up by 0.36% and Oil & Gas up by 0.36%, while Bankex down by 1.92%, Energy down by 0.83%, Auto down by 0.61%, FMCG down by 0.47% and Industrials down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 5.31%, Vedanta up by 2.72%, NTPC up by 2.63%, ONGC up by 1.86% and Asian Paints up by 0.62%. On the flip side, Yes Bank down by 3.61%, SBI down by 3.60%, HDFC down by 2.69%, Axis Bank down by 2.53% and Kotak Mahindra Bank down by 2.24% were the top losers.

Meanwhile, the Ministry of Road Transport and Highways has said that the government has notified 63 provisions of the Motor Vehicles Amendment Act 2019, which includes higher penalties for traffic violation. The new clauses will come into effect from September 1, 2019. These are provisions which require no further amendments in the Central Motor Vehicles Rules 1989.

For the remaining clauses, the Ministry has initiated the process of formulating draft rules. As and when the process is completed, the relevant provisions would be notified for implementation. The 63 clauses deal with penalties, licences, registration and National Transport Policy, among others. Under the new regulation, people will be charged enhanced penalty between Rs 1,000 to Rs 5,000 for unauthorised use of vehicles without licence. Besides, the penalty for driving without license would go up from up to Rs 500 to Rs 5,000.

The new rules also enhance penalty for drunken driving to imprisonment up to 6 months and/or fine up to Rs 10,000 for first offence and imprisonment up to 2 years and/or fine of Rs 15,000 for second offence. Besides, the new rules enable state governments to designate any person/agency as the enforcement agency to detect and impose penalty on overloaded vehicles.

The CNX Nifty traded in a range of 11,021.10 and 10,922.40. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 5.06%, Bharti Infratel up by 3.46%, JSW Steel up by 3.04%, Vedanta up by 2.61% and Coal India up by 2.54%. On the flip side, Yes Bank down by 3.36%, SBI down by 3.30%, HDFC down by 2.63%, Kotak Mahindra Bank down by 2.21% and Axis Bank down by 2.21% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 79.44 points or 1.12% to 7,194.15, France’s CAC rose 77.27 points or 1.44% to 5,446.07 and Germany’s DAX was up by 140.19 points or 1.2% to 11,841.21.

Asian shares ended mostly higher on Thursday. Hong Kong shares closed on a positive note, recovering from three days of selling thanks to bargain-buying. Chinese shares slipped into the red as US-China trade worries persisted. The US Trade Representative’s office has reaffirmed President Donald Trump’s plans to impose an additional 5% tariff on a list of $300 billion of Chinese imports, with some starting on September 01. Japanese shares ended down on concerns that trade conflicts and UK's political uncertainty would hurt the global economy. British Prime Minister Boris Johnson has suspended parliament till middle October, curtailing any debate or moves on Brexit.