Markets end volatile day in red terrain

Indian equity benchmarks ended volatile day in red terrain on Thursday, despite firm global markets. Markets made a positive start, after India jumped 14 places to the 63rd position on the World Bank’s ease of doing business ranking, riding high on the government’s flagship Make in India scheme and other reforms attracting foreign investment. The country also figured among the top 10 performers on the list for the third time in a row. Adding some support, the commerce and industry ministry said that India has recorded continuous improvement in its ease of doing business ranking issued by the World Bank on account of steps taken by the government in this regard.

But, bourses turned volatile to settle lower, as share of FPIs in domestic capital markets through P-notes stood at Rs 76,611 crore in September-end, registering the fourth consecutive month-on-month decline. Some concerns also came, after Fitch Ratings slashed India's GDP growth forecast in the current fiscal to 5.5% saying a large credit squeeze emanating from shadow banks has pushed economic growth to a six year low. Traders got cautious with Economist Intelligence Unit’s statement that India is not likely to benefit from the US-China trade tensions largely owing to existing policy barriers to large-scale production, strict labour laws & difficult land-acquisition process.

On the global front, European markets were trading in green, after France's private sector expanded at a faster pace at the start of the fourth quarter. The survey data from IHS Markit showed that the composite output index rose more-than-expected to 52.6 in October from 50.8 in September. The expected reading was 51.0. Asian markets ended mostly in green, as Indonesia's central bank lowered its key interest rate for the fourth straight meeting. The Board of Governors decided to reduce the 7-day reverse repo rate by 25 basis points to 5.00 percent. The decision came in line with expectations.

Back home, the telecom industry stocks remained in watch, after Industry body COAI said the Supreme Court ruling on the telecom sector revenue definition will deal a disastrous blow to the industry, given its precarious financial condition. Further, stocks related to the airline industry also remained in focus, as preliminary traffic figures for September released by the Association of Asia Pacific Airlines (AAPA) showed continued moderate growth in international air passenger numbers while air cargo demand declined to reflect stagnant international trade activity.

Finally, the BSE Sensex fell 38.44 points or 0.10% to 39,020.39, while the CNX Nifty was down by 21.50 points or 0.19% to 11,582.60.

The BSE Sensex touched a high and a low of 39,327.15 and 38,840.76, respectively and there were 13 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.39%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were Energy up by 1.57%, Realty up by 1.14%, Consumer Durables up by 0.55%, Healthcare up by 0.21% and Basic Materials up by 0.12%, while PSU down by 2.26%, Power down by 1.24%, Bankex down by 1.16%, Utilities down by 0.92% and TECK down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.31%, Reliance Industries up by 3.12%, HCL Tech. up by 2.09%, Asian Paints up by 1.38% and Tata Steel up by 1.05%. On the flip side, Yes Bank down by 5.76%, SBI down by 4.65%, Indusind Bank down by 3.78%, Infosys down by 2.36% and Mahindra & Mahindra down by 1.55% were the top losers.

Meanwhile, the Chairman of the Economic Advisory Council to Prime Minister Bibek Debroy has said India’s Gross Domestic Product (GDP) which is hovering around 5 percent is expected to inch up to 7 percent in the next financial year (FY21). Debroy said ‘I see India breaking out of 6 percent GDP and inching upwards gradually, but not overnight, to 7 percent or thereabouts.’

Debroy further said he expects GDP numbers at the end of the current fiscal year (FY20) to be around 6 percent. He also said one should not get swayed by the quarter-on-quarter GDP numbers and dismissed the clamour around 5 percent growth registered in the first quarter of FY20.

He pointed out that second-quarter growth will not be better than the first quarter. Besides, he mentioned that India needs to focus on decentralization not only from the Union government to state government but within states. He feels decentralization will drive growth at the level of the districts adding growth upwards to the states.

The CNX Nifty traded in a range of 11,679.60 and 11,534.65. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.23%, Reliance Industries up by 3.03%, Eicher Motors up by 2.96%, HCL Tech. up by 2.17% and Titan up by 2.10%. On the flip side, Bharti Infratel down by 7.98%, Grasim Industries down by 6.36%, Yes Bank down by 5.37%, SBI down by 4.47% and GAIL India down by 3.73% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 60.97 points or 0.84% to 7,321.71, France’s CAC rose 28.26 points or 0.5% to 5,681.70 and Germany’s DAX was up by 65.31 points or 0.51% to 12,863.50.

Asian markets ended mostly higher on Thursday as a raft of upbeat corporate results helped market sentiment. Investors shrugged off concerns surrounding Brexit and the Sino-US trade war. Japanese shares ended higher as weaker yen boosts exporters, while investors lapped up technology stocks on hopes for improved earnings following Microsoft Corp's higher than expected sales forecasts for its cloud computing services. Further, Seoul shares ended higher as the world’s second-largest memory chipmaker, SK Hynix’s third-quarter profit beat expectations fueled hopes of a recovery in the chip making industry, and investors shrugged off preliminary data from the Bank of Korea showing that South Korea's economy expanded at a slower pace in the third quarter amid heightened global uncertainties. Meanwhile, Chinese stocks closed on a flat note as caution crept in ahead of a crucial meeting of the ruling Communist Party next week.