Indices manage to end above neutral lines

Indian equity benchmarks managed to end Friday’s trading session above their respective neutral lines. The start of the day was slightly higher, taking support with State Bank of India’s report that credit growth in the system has picked up rapid pace beginning September 2019 after lagging behind for several months in a row, on the back of demand from housing, non-banking financial companies and micro, small and medium enterprises sectors. But soon, indices turned volatile, after the growth of eight core infrastructure industries contracted massively by 5.2% in September 2019, as compared to same period of last year, due to a decline in output of coal, crude oil, natural gas, cement, & electricity.

Lackluster trade persisted throughout the day, as India's manufacturing activity also slowed down in the month of October. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slipped to a two-year low of 50.6 in October from 51.4 in September. Benchmarks ended in green terrain but gains remained capped, as the Controller General of Accounts (CGA) in its latest data has showed that India's fiscal deficit reached nearly 93% of the Budget Estimate (BE) at Rs 6.52 lakh crore in the first half (April-September) of the current fiscal year (2019-20).

On the global front, European markets were trading in green, as Euro area economy grew more than expected in the third quarter, despite a global slowdown & uncertainties surrounding Brexit. The preliminary flash estimate from Eurostat showed that gross domestic product expanded 0.2 percent sequentially, the same rate as seen in the second quarter. Asian markets ended mixed, after Indonesia's manufacturing activity contracted the most in nearly four years in October. The factory Purchasing Managers' Index fell to 47.7 in October from 49.1 in September, signaling the sharpest in the sector for nearly four years.

Back home, sugar stocks remained in watch, as the government fixed sugar sale quota of 20.5 lakh tonne for November. As per the notification, 535 mills have been allocated 20.5 lakh tonne of sugar for sale in the current month. This quota is 1.5 lakh tonne less as compared to the allocation for November 2018. Further, stocks related to the NBFCs also remained in focus, after the Finance Ministry said public sector banks (PSBs) have extended support of Rs 2.56 lakh crore to NBFCs by way of credit and pooled buyout since September 2018 as part of efforts to provide much-needed liquidity to the sector.

Finally, the BSE Sensex gained 35.98 points or 0.09% to 40,165.03, while the CNX Nifty was up by 13.15 points or 0.11% to 11890.60.

The BSE Sensex touched a high and a low 40,283.30 and 40,014.23, respectively and there were 16 stocks advancing against 15 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.18%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Metal up by 2.50%, Telecom up by 1.49%, Basic Materials up by 1.02%, Bankex up by 0.84% and Realty up by 0.75%, while Consumer Durables down by 1.16%, IT down by 0.77%, Auto down by 0.75%, Capital Goods down by 0.72% and Oil & Gas down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 5.18%, Tata Steel up by 5.09%, Vedanta up by 3.10%, Tech Mahindra up by 2.94% and ONGC up by 2.01%. On the flip side, Yes Bank down by 5.46%, TCS down by 3.00%, Mahindra & Mahindra down by 2.81%, Asian Paints down by 2.28% and Tata Motors down by 1.58% were the top losers.

Meanwhile, dented by weak growth of both factory orders and production, India's manufacturing activity slowed down in the month of October. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance –slipped to a two-year low of 50.6 in October from 51.4 in September.

The survey report found that output expanded at the slowest rate in two years, on the back of subdued market demand along with competitive pressures. Besides, sales increased for the twenty-fourth consecutive month, but the upturn was the slowest over this period. Business confidence also got hit by challenging market conditions coupled with delayed client payment in October.

On the price front, lower demand for raw materials and semi-finished items led to a fall in overall cost burdens, the first in over four years. However, the decrease in input costs was fractional overall. Conversely, selling prices continued to increase in October. Although slight, the rate of charge inflation was at a seven-month high.

Further, unfinished business increased further in the reported month, amid reports of delays in the receipt of payment from clients. The rise in backlogs was the fastest since March, albeit marginal overall. As for supply chains, there was a marginal increase in lead times for inputs. However, the deterioration in vendor performance was similar to the fractional pace recorded in September.

The CNX Nifty traded in a range of 11,918.30 and 11,843.35. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 18.46%, Bharti Infratel up by 6.83%, Indusind Bank up by 5.01%, Tata Steel up by 4.18% and JSW Steel up by 3.86%. On the flip side, Yes Bank down by 6.11%, Indian Oil Corporation down by 2.83%, TCS down by 2.76%, Mahindra & Mahindra down by 2.71% and Eicher Motors down by 2.39% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 27.41 points or 0.38% to 7,275.79, France’s CAC rose 19.91 points or 0.35% to 5,749.77 and Germany’s DAX was 39.01 points or 0.3% to 12,905.80.

Asian markets ended mixed on Friday due to fresh uncertainty surrounding the Sino-US trade deal. Investors were worried by a report saying Chinese officials are unwilling to budge on the thorniest issues and have cast doubts about reaching a comprehensive long-term trade agreement. Japanese shares ended lower after survey data from IHS Markit showed that Japan's manufacturing sector moved deeper into contraction in October largely due to a sharp fall in new orders. At 48.4, the reading reached its lowest level in nearly three-and-a-half years. Meanwhile, Chinese shares ended higher on the back of upbeat data from IHS Markit showing that China's manufacturing sector expanded at the fastest pace since early 2017 in October. The manufacturing PMI rose to 51.7 from 51.4 in September, signaling an improvement in operating conditions for three months running.