Post Session: Quick Review

Indian equity benchmarks extended their losing streak for fifth straight session and ended Friday’s session with losses of over a percent, as 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. Trading for the day began on a firm note, as traders took encouragement 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. He added that the government announced a series of economic boosters including capitalisation of public sector banks, merging some of them, package for exports, and bringing down corporate tax rate. Some support also came with report that Commerce and Industry Minister Piyush Goyal and US Secretary for Commerce Wilbur Ross held discussions to increase bilateral trade between the countries.

However, markets failed to keep the momentum going at higher levels and entered into negative territory in second half of the day, despite Monetary Policy Committee (MPC) of the Reserve Bank of India slashed the short-term lending rate, repo rate, by 25 basis points in its fourth bimonthly policy review. The Street remained disappointed 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.

On the global front, Asian markets ended mostly lower on Friday, despite optimism that the US Federal Reserve will cut interest rates later in October. Investors remained cautious as they looked ahead to the release of US jobs data later in the day. European markets were trading mostly in red.

The BSE Sensex ended at 37672.14, down by 434.73 points or 1.14% after trading in a range of 37640.60 and 38403.54. There were 8 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.05%, while Small cap index was down by 0.83%.(Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.74% and TECK up by 0.32%, while Bankex down by 2.42%, Consumer Durables down by 2.21%, Basic Materials down by 1.97%, Capital Goods down by 1.96% and Industrials down by 1.73% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 1.05%, Infosys up by 1.04%, TCS up by 0.98%, Tech Mahindra up by 0.72% and Indusind Bank up by 0.71%. (Provisional)

On the flip side, Kotak Mahindra Bank down by 3.47%, ICICI Bank down by 3.32%, Tata Motors down by 2.78%, HDFC Bank down by 2.77% and Larsen & Toubro down by 2.35% were the top losers. (Provisional)

Meanwhile, with an aim to push economy to a high growth trajectory, Niti Aayog CEO Amitabh Kant has said that there will be many more structural reforms by the government in the coming days. He added that recently, the government announced a series of economic boosters including capitalisation of public sector banks, merging some of them, package for exports, and bringing down corporate tax rate.

He said ‘the RBI and the government have taken a series of measures to take India back to a high trajectory of growth. The RBI has dropped repo rate by about 110 basis points (in 2019 so far) but there are limitations to monetary policy and therefore the government stepped in and took a series of measures.’ He further said ‘I think many more structural reforms are in the offing. The government has pushed for public sector disinvestment. I can tell you we have pushed for asset monetisation in a very big way. Our belief is that instead of green-field projects, investors must come into brown-field projects.’

Kant noted that the step to bring down the corporate tax rate was to align it with global standards and he also said the government must be a facilitator, a catalyst and should keep itself out of business. He highlighted that in the last five years, the economy has grown at about 7.5 per cent. The country's growth rate of 8.1 per cent in the last quarter of 2017-18 has fallen to 5 per cent in April-June, 2019-20.

The CNX Nifty ended at 11169.90, down by 144.10 points or 1.27% after trading in a range of 11162.45 and 11400.30. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 1.13%, Infosys up by 1.09%, TCS up by 0.93%, Indusind Bank up by 0.92% and Tech Mahindra up by 0.73%. (Provisional)

On the flip side, Zee Entertainment down by 6.12%, Grasim Industries down by 4.10%, Ultratech Cement down by 3.96%, JSW Steel down by 3.84% and Titan Co down by 3.55% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC decreased 6.75 points or 0.12% to 5,432.02 and Germany’s DAX shed 29.90 points or 0.25% to 11,895.35, while UK’s FTSE 100 was up by 3.11 points or 0.04% to 7,080.75.

Asian markets ended mostly lower on Friday, despite optimism that the US Federal Reserve will cut interest rates later in October. Investors remained cautious as they looked ahead to the release of US jobs data later in the day, following a number of disappointing figures this week that fanned concerns about the world's top economy. The survey from the US Institute for Supply Management (ISM) showed its non-manufacturing activity index falling to the lowest level in more than three years in September, and far below expectations. Hong Kong shares ended lower, with the media reporting that Hong Kong's government is set to ban wearing face masks at protests. Japanese shares ended higher on late bargain-hunting as investors looked ahead to the key US jobs data to be released later in the day. Meanwhile, markets in China remained closed for public holidays.