Markets fail to sustain Bull Run on Friday

Indian equity benchmarks failed to sustain Bull Run on Friday, with Sensex & Nifty ending lower by over 0.80% each. After a weak start, key indices remained in negative terrain for the most part of the session, 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’. Adding more worries among traders, ICRA said that the government's Rs 25,000-crore fund to complete about 1,500 stalled affordable & mid-income housing projects is not adequate.

Despite coming back in green territory during noon deals, key bourses remained unsuccessful to hold gains for longer period and again continued sluggish journey to close the session in negative terrain. Weakness persisted over the street, amid 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, European markets were trading in red, as Finland's industrial production fell for the first time in four months in September. The figures from Statistics Finland showed that industrial production dropped a seasonally adjusted 1.2 percent month-on-month in September, after a 0.6 percent rise in August. Manufacturing output decreased 0.9 percent.  Asian markets ended in red, after China's exports fell less than expected in October and imports declined for the sixth month in a row. The official data showed that in dollar terms, exports decreased 0.9 percent year-on-year in October. Exports to the US declined around 11 percent.

Back home, NBFCs stocks remained in watch, amid reports that the government is mulling a special window to address debt woes of stressed non-banking financial companies under the insolvency law. Persisting liquidity issues in the NBFC space as well as the financial woes of some groups in this sector have raised concerns about the health of the overall financial system. Further, steel sector stocks also remained in focus, with a report that with the mining leases of 329 private mines slated to expire on March 31, apex mineral body FIMI believes that iron ore, a raw material used in steel-making, will be the worst hit from the move.

Finally, the BSE Sensex lost 330.13 points or 0.81% to 40,323.61, while the CNX Nifty was down by 103.90 points or 0.86% to 11,908.15.

The BSE Sensex touched a high and a low 40,749.33 and 40,263.94, respectively and there were 06 stocks advancing against 25 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.79%, while Small cap index was down by 0.53%.

The few gaining sectoral indices on the BSE were Realty up by 1.55%, Bankex up by 0.64% and Consumer Durables up by 0.06%, while PSU down by 1.80%, FMCG down by 1.80%, Metal down by 1.74%, Oil & Gas down by 1.72% and Healthcare down by 1.70% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.76%, Indusind Bank up by 3.08%, ICICI Bank up by 2.25%, Kotak Mahindra Bank up by 0.92% and Tech Mahindra up by 0.27%. On the flip side, Sun Pharma down by 4.23%, Vedanta down by 3.39%, ONGC down by 2.64%, TCS down by 2.54% and Hindustan Unilever down by 2.41% were the top losers.

Meanwhile, in order to pave the way for development and contribute to employees' welfare, the government is all set to frame new rules to regulate private security agencies. In this regard, the Ministry of Home Affairs (MHA) has invited comments and suggestions from individuals and organizations on the draft Private Security Agencies Central (Amendment) Model Rules, 2019.

The government envisages to improve the level of the enforcement of the act and the rules. Therefore, it has been decided to consider modification in the model rules made under section 24 of the act to bring in substantial improvement in its enforcement.

As per the ministry, since the private security agency licensing portal has been launched, there will be no need for manual police verification of details of directors, partners or proprietors of companies at the time of applying for license. The verification of antecedents will be facilitated through electronic databases of crime and criminal like the Crime and Criminal Tracking Networks and Systems (CCTNS) and the Interoperable Criminal Justice System (ICJS).

The CNX Nifty traded in a range of 12,034.15 and 11,888.75. There were 09 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.82%, Indusind Bank up by 2.90%, ICICI Bank up by 2.39%, Eicher Motors up by 1.01% and Kotak Mahindra Bank up by 0.99%. On the flip side, Bharti Infratel down by 4.92%, Sun Pharma down by 4.30%, GAIL India down by 3.90%, UPL down by 3.76% and Vedanta down by 3.26% were the top losers.

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.