Local barometers turn negative; Sensex breaches 39k mark

Pressurized by feeble global cues, key barometer gauges erased all the gains to turn negative in morning session, breaching their crucial 39,000 (Sensex) and 11,600 (Nifty) levels. A level of pressure was seen on frontline stocks, especially Tata Motors - DVR and HDFC. Investors turned jittery with a report that the government might be impelled to steeply cut its direct tax collection target, with growth in this regard slumping to 3.5% up to mid-October from the same period in the earlier financial year, as against the Budget target of 17.3%. However, downside further remain capped with a report that India and Saudi Arabia will sign a raft of key pacts to significantly ramp up ties in several key sectors including oil and gas, renewable energy and civil aviation. Some support came with a report that notwithstanding global and domestic economic uncertainties, private equity funds recorded an all-time-high investment of $9.4 billion in the third quarter this year, driven by big-ticket transactions. Besides, World Bank reported that India needs a fresh set of ‘bold reforms’ in the next three to four years if it wants to be among the top 50 countries with ease of doing business.

On the global front, Asian markets were trading in mostly in red, as uncertainty over the Sino-US trade deal was revived ahead of fresh rounds of negotiations, while concerns about global economic slowdown continued to rattle confidence. Back home, a report highlighted that Coal production from captive mines in the first half of the ongoing fiscal have increased by 25.5% year-on-year (y-o-y) to 26.1 million tonne (MT) from the corresponding period in FY19.

The BSE Sensex is currently trading at 38971.17, down by 49.22 points or 0.13% after trading in a range of 38950.11 and 39241.61. There were 10 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.27%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were PSU up by 0.67%, Oil & Gas up by 0.62%, IT up by 0.39%, Metal up by 0.39% and TECK was up by 0.13% while, Telecom down by 1.98%, Power down by 0.53%, Industrials down by 0.43%, Realty down by 0.29% and Auto was down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.11%, Infosys up by 1.37%, ITC up by 1.31%, Tata Steel up by 1.07% and ICICI Bank was up by 0.97%. On the flip side, Tata Motors - DVR down by 2.09%, Tata Motors down by 1.65%, HDFC down by 1.54%, Yes Bank down by 1.35% and IndusInd Bank down by 1.15% were the top losers.

Meanwhile, Fitch Ratings has slashed India's Gross Domestic Product (GDP) growth forecast for the current financial year (FY20) to 5.5% as compared to 6.6% forecasted in June for FY20. It said that the Indian economy is being held back by a large squeeze in credit availability emanating from non-bank financial companies (NBFCs).

He also added weakness has been fairly broad-based, with both domestic spending and external demand losing momentum. It mentioned that the recent government measures to boost economy including a cut in corporate tax rates will gradually nudge growth. The projection is lower than 6.1% that the Reserve Bank of India (RBI) had forecast in early October.

Further, it is expecting that GDP expansion will pick up to 6.2% in the next financial year (FY21) and to 6.7% in the year after. The Indian economy decelerated for the fifth consecutive quarter in April-June, with GDP expanding by a meagre 5%, down from 8% recorded a year earlier. This is the lowest growth outturn since 2013.

The CNX Nifty is currently trading at 11572.70, down by 9.90 points or 0.09% after trading in a range of 11559.15 and 11646.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.72%, SBI up by 2.44%, Infosys up by 1.68%, Eicher Motors up by 1.34% and Indian Oil Corporation was up by 1.20%. On the flip side, Bharti Infratel down by 6.69%, Tata Motors down by 1.57%, HDFC down by 1.41%, Grasim Industries down by 1.18% and Dr. Reddys Lab was down by 1.18% were the top losers.

Asian markets were trading in mostly in red; Hang Seng decreased 133.80 points or 0.5% to 26,664.15, Jakarta Composite lost 36.17 points or 0.57% to 6,303.48, Taiwan Weighted dropped 32.45 points or 0.29% to 11,287.69, KOSPI fell 3.20 points or 0.15% to 2,082.46 and Shanghai Composite declined 0.31 points or 0.01% to 2,940.61.

On the other hand, Nikkei 225 surged 11.55 points or 0.05% to 22,762.15 and Straits Times advanced 14.65 points or 0.46% to 3,183.52.