Markets fail to hold gains; end in red terrain

Indian equity benchmarks failed to hold their gains on Thursday to end in red terrain. After a firm start, markets managed to trade above neutral lines for the most part of the session, as Union minister Ravi Shankar Prasad termed the low Gross Domestic Product growth as a ‘temporary phenomenon’, and expressed confidence that things will improve in future as the fundamentals of Indian economy are strong. He added that the government is taking all necessary steps to boost the economy. Adding some comfort, data from the India Meteorological Department showed India received 38% more rainfall than the 50-year average in the week to September 11, with central India receiving 142% more rain.

However, in the last hours of the trade, indices slipped in negative, as Organization of the Petroleum Exporting Countries (OPEC) said that it seems India's economic slowdown could continue for the next two to three years as the economy faces serious structural reform, which will hurt consumer demand and manufacturing. Some worries also came with rating agency Moody's statement that Indian non-banking financial companies (NBFCs) and housing finance companies (HFCs) are pulling back on loan against property (LAP) lending to micro, small and medium sized enterprises (MSMEs) because of the funding squeeze caused by the liquidity crisis in the country's financial sector.

On the global front, European markets were trading mostly in red, even though Germany's inflation eased as estimated in August. The final data from Destatis showed that consumer prices climbed 1.4 percent year-on-year in August, slower than the 1.7 percent increase in July. Asian markets ended mixed, after Singapore retail sales declined at a slower pace in July. The Department of Statistics reported that retail sales decreased 1.8 percent year-on-year in July, much slower than the 8.9 percent fall in June and the expected drop of 2.9 percent. Motor vehicle sales gained 1.5 percent, in contrast to a 32.4 percent plunge in June.

Back home, the oil industry stocks ended lower, despite the Organization of the Petroleum Exporting Countries in its latest monthly World Oil Demand report said that India's oil demand is expected to rise by the fastest pace globally this year and the next year, despite slower economic expansion. Further, stocks related to the sugar industry remained in limelight, after the India Sugar Trade Association (AISTA) in its latest data showed that India is estimated to have exported 3.68 million tonne of sugar in the ongoing 2018-19 marketing year so far. Of the total sugar exported, raw sugar was 1.49 million tonne and white 1.53 million tonne.

Finally, the BSE Sensex fell 166.54 points or 0.45% to 37,104.28, while the CNX Nifty was down by 52.90 points or 0.48% to 10,982.80.

The BSE Sensex touched a high and a low of 37,435.15 and 37,048.67, respectively and there were 08 stocks advancing against 23 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index declined 0.18%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Bankex up by 0.19%, Capital Goods up by 0.18%, Basic Materials up by 0.13% and Healthcare up by 0.11%, while Auto down by 1.92%, Telecom down by 1.68%, Energy down by 1.37%, Consumer Disc down by 1.10% and Oil & Gas down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.13%, Sun Pharma up by 1.34%, Indusind Bank up by 1.26%, HDFC Bank up by 0.95% and SBI up by 0.54%. On the flip side, Yes Bank down by 5.10%, Tata Motors - DVR down by 4.87%, Tata Motors down by 4.76%, Maruti Suzuki down by 3.13% and Axis Bank down by 2.74% were the top losers.

Meanwhile, the Commerce Ministry will soon seek Union Cabinet’s nod for the proposed Multi-Modal Transportation of Goods Bill, 2019, (MMTG), which aims at facilitating movement of goods for exports, imports and domestic trade also. After getting the Cabinet's approval, the Bill will be laid in Parliament for approval and would repeal the present MMTG Act 1993. Multimodal transportation includes a combination of more than one mode of movement, such as rail, road or sea, for end-to-end delivery of goods.

Commerce and Industry Minister Piyush Goyal has said that micro, small and medium enterprises (MSMEs) and start-ups would get concessions in filing patents, copyrights and trademark applications. He noted that a separate cell for MSMEs will be set up at the Directorate General of Trade Remedies (DGTR) to help them file applications for dumping cases. He also said that the ministry would provide free services to them as it costs more to hire lawyers and do data collection.

Adding further, Goyal said ‘The ministry is studying rules of all other countries pertaining to trade remedy measures like anti-dumping duties and then, we will align the rule of India. In the next 10 days, we will take a decision on this.’ He felt that India is not able to take measures in full fairness because of lesser duty rule. He also expressed hope that because of the recent liberalisation of foreign direct investment (FDI) norms in certain sectors, India can attract large-scale manufacturing.   

The CNX Nifty traded in a range of 11,081.75 and 10,964.95. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 3.64%, Ultratech Cement up by 2.47%, ICICI Bank up by 2.03%, Hindalco up by 1.65% and Sun Pharma up by 1.30%. On the flip side, Yes Bank down by 4.68%, Tata Motors down by 3.80%, Maruti Suzuki down by 3.01%, Axis Bank down by 2.79% and JSW Steel down by 2.64% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 1.61 points or 0.02% to 7,336.42 and France’s CAC fell 4.77 points or 0.08% to 5,613.29, while Germany’s DAX was up by 10.35 points or 0.08% to 12,369.42.

Asian markets exhibited mix trend on Thursday ahead of an impending European Central Bank (ECB) policy decision later in the day with new easing measures expected. Investors also looked ahead to the US Federal Reserve's two-day Federal Open Market Committee policy meeting next week, in which the central bank is expected to continue cutting interest rates. Chinese stocks edged higher as US President Donald Trump announced a short delay to scheduled tariff hikes on billions worth of Chinese goods in response to China's decision to exempt some US anti-cancer drugs and other goods from its tariffs. Moreover, Japanese Nikkei hit a four-month high as the yen continued to weaken amid signs of a thaw in trade tensions between the United States and China. Investors also welcomed data showing that core machine orders in Japan fell a seasonally adjusted 6.6 percent sequentially in July, beating street’s expectation for a fall of 8.1 percent following the 13.9 percent surge in June.