Post Session: Quick Review

Snapping two sessions of gaining streak, Indian equity benchmarks ended Friday’s trade with losses of around a percent, following weak trend in Asian peers. The start of trading session was pessimistic as Moody's Investors Service cut India's credit rating outlook to negative from stable, citing a growing debt burden and the government's struggle to narrow the budget deficit. It said the country’s economic growth will remain ‘materially lower than in the past’. The rating agency affirmed the Baa2 foreign-currency and local-currency long-term issuer ratings. Some cautiousness also came with the ICRA’s report that the government's Rs 25,000-crore fund to complete about 1,500 stalled affordable and mid-income housing projects is not adequate.

However, Indian equities pared most of their initial losses in afternoon deals, taking support from Reserve Bank of India (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). But, markets witnessed sharp selling activity in final hour of trade which forced to close the session near day’s low, as anxiety remained among traders with a private report stating that corporate India is forecasting deteriorating growth for the October-December period this year as optimism for new orders and sales prices have hit the lowest level in nearly 18 years. The Dun & Bradstreet Composite Business Optimism Index stood at 56.4 for December quarter this year, registering a decline of 19.5 percent as compared to the year-ago period.

On the global front, Asian markets ended mostly lower on Friday, while European markets were trading in red on uncertainty over whether and when the United States and China will seal a deal marking a truce in their trade war that has slowed economic growth and roiled markets. Back home, aviation stocks were in focus with global airlines body IATA’s statement that India's air traffic increased by just 1.6 per cent in September compared to 4.5 per cent in August this year and it said the pace of growth has slowed significantly throughout 2019 due to weaker economic activity and Jet Airways bankruptcy.

The BSE Sensex ended at 40317.61, down by 336.13 points or 0.83% after trading in a range of 40263.94 and 40749.33. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.80%, while Small cap index was down by 0.56%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.53%, Bankex up by 0.67% and Consumer Durables up by 0.01%, while PSU down by 1.87%, FMCG down by 1.83%, Oil & Gas down by 1.80%, Healthcare down by 1.74% and Metal down by 1.74% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 4.06%, Indusind Bank up by 3.05%, ICICI Bank up by 2.52%, Kotak Mahindra Bank up by 0.92% and Tech Mahindra up by 0.22%. (Provisional)

On the flip side, Sun Pharma down by 4.33%, Vedanta down by 3.29%, ONGC down by 3.06%, TCS down by 2.67% and Hindustan Unilever down by 2.55% were the top losers. (Provisional)

Meanwhile, expressing caution over India’s economic growth, international rating agency Moody’s Investors Service in its latest report has changed the outlook on India's rating to 'negative' from 'stable'. It said that there was increasing risks that economic growth will remain materially lower than the past, citing a growing debt burden and the government’s struggle to narrow the budget deficit. It affirmed the nation’s foreign-currency and local-currency long-term issuer ratings at Baa2, the second-lowest investment grade score.

The rating agency’s decision to change the outlook to negative reflects increasing risks that economic growth will remain materially lower than in the past, partly reflecting lower government and policy effectiveness at addressing long-standing economic and institutional weaknesses than Moody's had previously estimated, leading to a gradual rise in the debt burden from already high levels.

Moody’s also said while government measures to support the economy should help to reduce the depth and duration of India's growth slowdown, prolonged financial stress among rural households, weak job creation, and, more recently, a credit crunch among non-bank financial institutions (NBFIs), have increased the probability of a more entrenched slowdown. It further said the prospects of further reforms that would support business investment and growth at high levels, and significantly broaden the narrow tax base, have diminished.

The CNX Nifty ended at 11904.25, down by 107.80 points or 0.90% after trading in a range of 11888.75 and 12034.15. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 4.21%, Indusind Bank up by 3.10%, ICICI Bank up by 2.62%, Eicher Motors up by 1.09% and Kotak Mahindra Bank up by 1.05%. (Provisional)

On the flip side, Bharti Infratel down by 4.79%, Sun Pharma down by 4.30%, GAIL India down by 3.94%, UPL down by 3.75% and Vedanta down by 3.32% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 22.55 points or 0.3% to 7,383.86, France’s CAC fell 24.42 points or 0.41% to 5,866.57 and Germany’s DAX was down by 37.43 points or 0.28% to 13,252.03.

Asian markets ended mostly lower on Friday due to conflicting reports on how much progress has been made in Sino-US trade negotiations. Trade-deal optimism diminished slightly after reports suggested that a plan to roll back tariffs on each other's goods in phases has met opposition from some advisers to US President Donald Trump. Chinese shares ended down, even as reports showed China's exports and imports contracted less than expected in October. Chinese exports fell 0.9 percent year-on-year in dollar terms, declining for the third straight month, against forecast of a 3.9 percent fall following September's 3.2 percent contraction. While, Imports declined 6.4 percent from a year earlier, slower than the forecast of 7.8 percent fall. Though, Japanese shares ended up after data showed the country's household spending rose at the fastest pace on record in September. The average of household spending in Japan rose an annual 9.5 percent in real terms in September, beating forecasts for an increase of 7.0 percent following the 1.0 percent gain in August.