Local equities continue lackluster trade

Local equity benchmarks continued their lackluster trade in morning session, with losses of around half a percent, amid weakness in Asian peers. Traders maintained a cautious approach as India’s credit ratings outlook was cut to negative by Moody’s Investors Service, the first step toward a downgrade, as concerns mount the economic slowdown will be prolonged and debt will rise. Moody’s projects a budget deficit of 3.7% of gross domestic product in the year through March 2020. Traders reacted negatively to IMF chief Kristalina Georgieva’s statement that the global debt load has surged to a new all-time record equivalent to more than double the world’s economic output. While private sector borrowing accounts for the vast majority of the total, the rise puts governments and individuals at risk if the economy slows. However, market participants failed to get some sense of relief from Reserve Bank of India’s (RBI) data showing that the non-food credit growth in the banking system stood at 8.79% year-on-year (y-o-y) for the fortnight ended November 7, the highest in the last three fortnights, following the lending outreach programmes by public-sector banks (PSBs).

On the global turf, Asian markets were trading mostly in red, as investors sought clarity after conflicting messages about the state of US-China trade talks. Back home, a report stated that the government is examining a possibility for setting up of a regulatory authority for the e-commerce sector. Domestic traders have time and again demanded a regulator to monitor the sector and act against online retail companies flouting norms.

The BSE Sensex is currently trading at 40481.22, down by 172.52 points or 0.42% after trading in a range of 40452.26 and 40630.56. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.12%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Realty up by 1.44%, Auto up by 0.63%, BANKEX up by 0.51%, Consumer Durables up by 0.28% and Consumer Disc was up by 0.23%, while Telecom down by 1.46%, FMCG down by 1.21%, Power down by 0.99%, PSU down by 0.86% and Metal was down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.72%, IndusInd Bank up by 1.94%, Yes Bank up by 1.43%, Mahindra & Mahindra up by 1.31% and Maruti Suzuki was up by 0.84%. On the flip side, Sun Pharma was down by 3.03%, ITC down by 1.94%, Hindustan Unilever down by 1.87%, Tata Steel down by 1.67% and Power Grid was down by 1.42% were the top losers.

Meanwhile, global airlines body, International Air Transport Association (IATA) has said that India's air traffic increased by just 1.6 per cent in September 2019 compared to 4.5 per cent in August this year on account of weaker economic activity.

It mentioned that following a sustained period of double-digit year-on year growth between 2015 and 2018, the pace has slowed significantly throughout 2019 amidst weaker economic activity, subdued private consumption and Jet Airways bankruptcy which disrupted the market earlier this year. Jet Airways shut down its operations on April 17 this year due to lack of funds.

It said that growth in domestic India RPKs (revenue passenger kilometres) eased to 1.6 per cent year-on-year, from 4.5 per cent observed in August. In comparison, Chinese passenger traffic grew by 8.9 per cent and 9.8 per cent in September and August, respectively.

The CNX Nifty is currently trading at 11960.15, down by 51.90 points or 0.43% after trading in a range of 11948.50 and 11996.55. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.69%, IndusInd Bank up by 1.76%, Mahindra & Mahindra up by 1.52%, Yes Bank was up by 1.35% and Zee Entertainment up by 1.17%. On the flip side, Bharti Infratel down by 4.21%, Sun Pharma down by 2.89%, UPL down by 1.90%, ITC down by 1.82% and Hindustan Unilever was down by 1.79% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 174.54 points or 0.63% to 27,672.69, Straits Times trembled 25.36 points or 0.77% to 3,260.36, Taiwan Weighted dropped 11.33 points or 0.1% to 11,595.23, KOSPI fell 6.80 points or 0.32% to 2,137.49 and Jakarta Composite was down by 3.61 points or 0.06% to 6,162.01.

On the other hand, Shanghai Composite gained 10.68 points or 0.36% to 2,989.39 and Nikkei 225 was up by 22.34 points or 0.1% to 23,352.66.