Indices fall further; Sensex tumbles around 600 points

Indian equity indices fell further in late afternoon session, on the back of mixed cues from European markets. Continuous selling in Auto, Realty and banking stocks also kept the sentiments down. The street remained pessimistic with credit rating agency, India Ratings and Research’s (Ind-Ra) report stating that the recent set of measures to stimulate growth announced last week would yield only limited short-term benefits. It also said that the weakness in the economy has largely been caused by demand-side headwinds, which have been exacerbated by structural bottle-necks.

On the global front, European markets were trading mixed, as Switzerland's economic growth forecast for this year was slashed, as the country's exports and investment are being hurt by a slowing global economy and high uncertainty. The State Secretariat for Economic Affairs said that the growth forecast for this year was cut to 0.8 percent from 1.2 percent predicted in June. Asian markets were trading mostly in red.

Back home, the automobile sector stocks were in watch, after Traders Body Confederation of All India Traders (CAIT) said there is no slowdown in the domestic automobile sector and the industry is making hue and cry only to get a package from the government.

The BSE Sensex is currently trading at 36538.39, down by 584.92 points or 1.58% after trading in a range of 36425.05 and 37169.56. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.24%, while Small cap index was down by 1.40%.

The lone gaining sectoral index on the BSE was Consumer Durables up by 0.01%, while Auto down by 2.56%, Realty down by 2.52%, Bankex down by 2.17%, Metal down by 2.09% and Telecom down by 1.88% were the top losing indices on BSE.

The only gainers on the Sensex were Hindustan Unilever up by 0.79% and Asian Paints up by 0.66%. On the flip side, Hero MotoCorp down by 5.06%, Axis Bank down by 3.95%, Maruti Suzuki down by 3.17%, Indusind Bank down by 3.16% and SBI down by 3.13% were the top losers.

Meanwhile, few days after Finance Minister Nirmala Sitharaman announced measures related to exports and home buyers, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the recent set of measures to stimulate growth would yield only limited short-term benefits.

As per the Ind-Ra, slowdown in the economy has largely been caused by demand-side headwinds, which have been exacerbated by structural bottle-necks. However, the gamut of measures announced--especially those pertaining to the real estate sector & exports--mainly focus on facilitating supply-side activity in these sectors. Nonetheless, these reforms are likely to stimulate investments in export-oriented sectors over the long term.

The agency further noted that the liquidity pressures being faced by micro, small and medium enterprises could be materially eased on the back of the speedy pay-out of input tax credit, inter-state goods and services tax (IGST) refund. It also added that the ability to effectively speed up these pay-outs, however, depends on the central government’s ability to manage its fiscal condition.

The CNX Nifty is currently trading at 10822.50, down by 181.00 points or 1.64% after trading in a range of 10804.10 and 11000.10. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.20%, Titan up by 1.00%, Hindustan Unilever up by 0.74%, Dr. Reddy’s Lab up by 0.50% and Asian Paints up by 0.25%. On the flip side, Hero MotoCorp down by 5.64%, Axis Bank down by 4.04%, Tata Motors down by 3.77%, Maruti Suzuki down by 3.65% and Tata Steel down by 3.46% were the top losers.

Asian markets were mostly trading in red; Hang Seng decreased 393.20 points or 1.45% to 26,731.35, Shanghai Composite declined 52.86 points or 1.74% to 2,977.89, Taiwan Weighted dropped 23.63 points or 0.22% to 10,874.50 and Straits Times was down by 17.35 points or 0.54% to 3,186.58. On the flip side, KOSPI rose 0.11 points or 0.01% to 2,062.33, Jakarta Composite soared 8.61 points or 0.14% to 6,228.05 and Nikkei 225 was up by 13.03 points or 0.06% to 22,001.32.

European markets were trading mixed; FTSE gained 10.94 points or 0.15% to 7,332.35 and CAC rose 2.54 points or 0.05% to 5,604.77, while DAX was down by 21.85 points or 0.18% to 12,358.46.