Markets slip into negative terrain in afternoon deals

Indian equity indices altering between positive and negative territory, have now slipped into red terrain in afternoon trade on account of selling in frontline blue chip stocks, despite strong trend seen in other Asian markets. The sentiments remained lackluster with a private survey showed India’s service sector activity declined for the second straight month in October, the first back-to-back reduction since the second quarter of 2017-18, dragging business confidence to its lowest level in close to three years. Although the IHS Markit Services Purchasing Managers' Index rose to 49.2 in October from 48.7 in September, it remained below the 50-mark threshold that separates contraction from expansion.  Some concerns also came with SBI report stating that India's Gross Domestic Product (GDP) growth is likely to slow further in the July-September quarter of this financial year to below 5 per cent amid decline in consumption, weak investments and an under-performing service sector. On the sectoral front, jewellery stocks such as PC Jeweller and Titan Company fell after the World Gold Council said gold jewellery demand in India fell to 101.6 tonnes during July to September, down 32 percent from 148.8 tonnes in the same period of last year. The demand suffered as consumer confidence fell further over concerns around the slowing economy.

On the global front, Asian markets were trading in green as hopes that Washington may roll back some of the tariffs it has imposed on imports from China shored up optimism on the global economic outlook. Back home, the BSE Sensex is currently trading at 40169.69, down by 132.27 points or 0.33% after trading in a range of 40143.96 and 40466.55. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.74%, while Small cap index was down by 0.51%.

The only gaining sectoral index on the BSE was Telecom up by 0.98%, while Consumer Durables down by 1.20%, Capital Goods down by 1.09%, IT down by 0.93%, Energy down by 0.81% and Healthcare was down by 0.76% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.80%, SBI up by 1.53%, Bharti Airtel up by 1.15%, Hero MotoCorp up by 0.82% and Bajaj Finance was up by 0.74%. On the flip side, Sun Pharma down by 2.26%, Infosys down by 1.83%, Indusind Bank down by 1.15%, Mahindra & Mahindra down by 0.90% and Kotak Mahindra Bank was down by 0.88% were the top losers.

Meanwhile, Former RBI Deputy Governor Viral Acharya has said that the government needs to reduce its dependence on bond markets and undertake a heavy disinvestment program along with urgently implementing land, labour and agricultural reforms. He said “it may not be easy to pull back on certain announced programmes. But in that case, one has to rationalise heavy programmes that are not delivering the supposed objectives.' He added that those programmes which are maybe the least attractive politically can be wound down as soon as possible and some space needs to be freed up for others to borrow in the Indian economy.

Acharya also felt that the government must undertake a really heavy disinvestment programme ideally by selling of majority stakes so that there is some improvements in productivity being accumulated at the same time by raising government funds through equity markets rather than bond markets. He said he strongly supports creation of an independent fiscal monitor, on the lines of a congregational budgeting office, where every time a programme is announced, there is an audit within two months that looks into what are the next five year implications of financing to be met for the particular programme.

Former RBI Deputy Governor further said the reforms will help bring a new set of people into the middle class who can then push up consumption. He said “right now we are doing a lot for them through the government balance sheet but I think it would be better to give them livelihood, higher real wages, higher consuming power.” He also said “I think that will actually make the programs sustainable. Otherwise, we may get into a low-growth, low-productivity trap. That's the fear I have with India's present fiscal projections and the present fiscal dominance that's affecting almost every sector of the economy.”

The CNX Nifty is currently trading at 11895.70, down by 45.60 points or 0.38% after trading in a range of 11887.75 and 11978.95. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.48%, Yes Bank up by 2.65%, Bharti Infratel up by 2.21%, SBI up by 1.56% and Bharti Airtel was up by 1.23%. On the flip side, Zee Entertainment down by 3.41%, Sun Pharma down by 2.26%, Grasim Industries down by 2.09%, Eicher Motors down by 1.90% and Coal India was down by 1.81% were the top losers.

All the Asian markets were trading in green; Hang Seng increased 91.15 points or 0.33% to 27,638.45, Taiwan Weighted strengthened 87.18 points or 0.75% to 11,644.03, Shanghai Composite gained 14.91 points or 0.5% to 2,990.40, KOSPI rose 12.40 points or 0.58% to 2,142.64, Straits Times advanced 13.57 points or 0.42% to 3,249.97, Jakarta Composite soared 44.21 points or 0.72% to 6,224.55 and Nikkei 225 was up by 401.22 points or 1.76% to 23,251.99.