Bourses turn negative as RBI cuts GDP growth forecast

Key benchmark indices erased all of their gains to turn negative in afternoon session, after the Reserve Bank of India (RBI) reduced GDP growth forecast to 6.1 percent from its earlier estimate of 6.9 per cent in its fourth bi-monthly monetary policy meeting. Some concern also came with a monthly survey showing that the country’s services sector activity contracted in September and fell to its lowest level since February 2018, amid weak demand, competitive pressures and challenging market conditions. The IHS Markit India Services Business Activity Index fell to 48.7 in September from 52.4 in August, as lacklustre client demand weighed on the performance of the Indian service economy. However, losses were limited as traders took some support with Niti Aayog CEO Amitabh Kant’s statement that there will be many more structural reforms by the government in the coming days to push economy to a high growth trajectory.

On the global front, Asian markets were trading mixed, as investors tentatively await the release of key US jobs data later in the day, following a number of disappointing figures this week that fanned concerns about the world's top economy. Back home, the BSE Sensex is currently trading at 38065.56, down by 41.31 points or 0.11% after trading in a range of 37971.91 and 38403.54. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.19%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were IT up by 0.87%, TECK up by 0.61%, Healthcare up by 0.42%, Energy up by 0.29% and Auto was up by 0.25%, while FMCG down by 1.09%, Bankex down by 0.98%, Consumer Durables down by 0.66%, Telecom down by 0.63% and Realty was down by 0.59% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.83%, HDFC up by 1.48%, Infosys up by 1.16%, Tech Mahindra up by 0.97% and Indusind Bank was up by 0.97%. On the flip side, Kotak Mahindra Bank down by 2.56%, ITC down by 2.05%, HDFC Bank down by 1.17%, Power Grid down by 1.08% and Yes Bank was down by 1.06% were the top losers.

Meanwhile, US Secretary of Commerce Wilbur Ross said that neither Indian nor American government has stated that a trade deal will be signed in five minutes, but it does not see any structural reason which might stop both the nations to have a trade agreement ‘pretty quickly’.

Talking about US concerns over high trade deficit with India, Ross said that there was confusion about US position on the trade deficit. He said ‘We do feel that our deficit was too high and we intend both to increase total trade and reduce our trade deficit.’ He also noted that the deficit which arises mainly because of artificial and protectionist barriers that countries have thrown up which is a primary issue that the US is concerned with. He added that increasing exports from India would also help India and India has a wonderful opportunity right now to take advantage of trade tensions in the world.

Assuring that the announcement of trade deal is not holding back Indian trade or Indian relations either at the geopolitical level or leaders level or even trade and business level, Commerce Minister Piyush Goyal said ‘But we want to actually take a quantum leap in that, which is the direction in which both nations and our negotiating team are working.’ he noted that trade has to consider the past, the present, future, the political dynamics, local issues, long term issues, bilateral and multilateral commitments. He added ‘So it's a very complex story and in that complexity, we are having an absolutely wonderful engagement.’

The CNX Nifty is currently trading at 11273.10, down by 40.90 points or 0.36% after trading in a range of 11263.50 and 11400.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.88%, Wipro up by 1.40%, HDFC up by 1.32%, ONGC up by 1.13% and Infosys was up by 1.11%. On the flip side, BPCL down by 3.31%, Zee Entertainment down by 3.14%, Kotak Mahindra Bank down by 2.96%, Grasim Industries down by 2.20% and Indian Oil Corporation was down by 2.08% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 68.46 points or 0.32% to 21,410.20, Jakarta Composite soared 20.74 points or 0.34% to 6,059.27 and Taiwan Weighted was strengthened 18.57 points or 0.17% to 10,894.48. On the flip side, KOSPI fell 11.22 points or 0.55% to 2,020.69, Straits Times trembled 15.27 points or 0.49% to 3,072.70 and Hang Seng was down 374.94 points or 1.44% to 25,735.37.