Bourses break 6-day winning rally

Indian equity bourses broke 6-day winning rally on Tuesday’s trading session, with Sensex and Nifty closing lower by 334 and 73 points, respectively. The day started on a cautious note, as Finance Minister Nirmala Sitharaman cautioned that trade wars and protectionism have generated uncertainties, which will ultimately impact the flow of capital, goods and services. Anxiety also came among investors, amid a report showing that as many as 360 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.88 lakh crore owing to delays and other reasons.

Key equity benchmarks remained lackluster during the whole trading session, despite the International Monetary Fund’s (IMF) statement that India's decision to reduce corporate income tax to help revive investment. Though, the agency said India should address continued fiscal consolidation and secure long-term stability of the fiscal conditions. Market participants paid no heed towards the Retirement fund body, Employment Provident Fund Organisation’s (EPFO) latest ‘Provisional Estimate of Net Payroll’ data report showing that India created 10,86,113 new jobs in the month of August 2019.

On the global front, European markets were trading in green, even though the UK budget deficit for September increased for the first time in five years. The data from the Office for National Statistics showed that public sector net borrowing excluding banks increased by GBP 0.6 billion from last year to GBP 9.4 billion in September. Asian markets ended in green, after Japan's all industry activity remained stable in August. The figures from the Ministry of Economy, Trade and Industry showed that the all industry activity index remained unchanged month-on-month in August. The street had forecast a modest 0.1 percent fall.

Back home, the banking industry stocks remained in focus, amid a private report stating that at a time when growth is slowing, productivity gains are fading and digital pressures are on the rise, the banking sector should urgently consider radical measures to strengthen profitability and boost returns. Further, stocks related to the infrastructure sector also remained in watch, with Union Finance Minister Nirmala Sitharaman’s statement that India is planning to spend $1.4 trillion on its infrastructure in the next five years, as part of its aim to become a $5 trillion economy by 2024.

Finally, the BSE Sensex lost 334.54 points or 0.85% to 38,963.84, while the CNX Nifty was down by 73.50 points or 0.63% to 11,588.35.

The BSE Sensex touched a high and a low of 39,426.47 and 38,924.85, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.09%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.56%, Consumer Durables up by 1.52%, Bankex up by 1.05%, Oil & Gas up by 0.77% and FMCG up by 0.66%, while IT down by 7.01%, TECK down by 6.35%, Telecom down by 2.00%, Metal down by 0.60% and Auto down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.06%, Sun Pharma up by 1.10%, Bajaj Auto up by 1.04%, Hindustan Unilever up by 1.02% and HDFC up by 0.98%. On the flip side, Infosys down by 16.21%, Tata Motors - DVR down by 4.48%, Tata Motors down by 3.51%, Bharti Airtel down by 3.24% and HCL Tech. down by 2.87% were the top losers.

Meanwhile, Federation of Automobile Dealers Associations (FADA) has said that passenger vehicle (PV) retail sales dropped by 20.1 percent to 1,57,972 units in September 2019 as compared with 1,97,653 units in the corresponding month last year, as the onset of festival season and never-seen-before discounts failed to boost demand. In the two-wheeler segment, the retail sales declined by 12.1 percent to 10,98,271 units in September as compared with 12,48,998 units in the year-ago period. Commercial vehicle sales dropped by 18.5 percent to 63,518 units against 77,980 units in September last year.

According to the FADA, three-wheeler sales saw a rise of 1.8 percent to 55,553 units in September 2019 from 54,560 units in the same period in the previous year. Total sales across categories declined by 12.9 percent to 13,75,314 units in September as against 15,79,191 units in the same month last year. It has stated that retail sales were under pressure during the month and the de-growth was on expected lines. It also said the continued heavy rains in various regions and the shraddh period also contributed to this sales lag. It added that the complete effect of the positive measures announced by the government was still not visible at the retail levels in the month of September.

Automobile dealers' body further stated that high inventory levels which started with festive season last year still continue to be a problematic area. While commercial vehicles showed slight reduction in inventory levels, it said passenger vehicle segment witnessed an increase as companies pushed in higher number of units anticipating higher sales during the festive season.

The CNX Nifty traded in a range of 11,714.35 and 11,573.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.49%, ICICI Bank up by 3.19%, BPCL up by 2.38%, Titan up by 2.34% and Cipla up by 2.14%. On the flip side, Infosys down by 16.65%, Tata Motors down by 4.02%, Bajaj Finserv down by 3.16%, Bharti Airtel down by 2.83% and HCL Tech. down by 2.79% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 42.86 points or 0.6% to 7,206.50, France’s CAC rose 5.22 points or 0.09% to 5,653.57 and Germany’s DAX was up by 40.91 points or 0.32% to 12,788.87.

Asian markets ended higher on Tuesday, supported by optimism over ongoing trade talks between the United States and China, the world's two largest economies. Trump and Chinese President Xi Jinping are set to participate in the Asia-Pacific Economic Cooperation meetings in Chile during mid-November, where many are anticipating first phase of the trade deal to be signed between the two countries. Hopes of upbeat earnings results from major companies this week also boosted sentiment. Chinese shares ended higher after official data showed house prices in majority of the Chinese cities increased in September. On a monthly basis, house prices increased in 53 cities out of 70. Meanwhile, Japanese markets are closed for a public holiday.