Post Session: Quick Review

Indian equity benchmarks ended Wednesday’s trade on a lower note, tracking sell-off in the global market. After making a cautious start, markets inched up, as traders took some support with Defence Minister Rajnath Singh exuding confidence that India will become a $10 trillion economy in the next 10 to 15 years. Traders also took a note of Former Niti Aayog vice-chairman Arvind Panagariya’s statement that India should join the Regional Comprehensive Economic Partnership (RCEP) as it would help the country adopt a more liberal trade policy regime and boost exports. After that, key indices erased gains to trade flat as caution set in ahead of Consumer Price Index (CPI) data for October scheduled to be released today.

Markets witnessed sharp sell-off in late hour of trade, as SBI research report sharply cut the country's GDP growth forecast to 5% for FY 2019-20 from the earlier projection of 6%. It said the second-quarter GDP growth rate is likely to slip to 4.2% on account of low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure. Traders also remain concerned with data showing that factory output growth, measured by the Index of Industrial Production (IIP), contracted by 4.3% in September as compared to a contraction 1.1% in August 2019 as all three broad-based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted. Some concern also came with report stating that venture investment activity in India slowed down both by value and deal volumes in October to $3.312 billion in 91 transactions on account of poor show by the realty sector.

On the global front, Asian markets ended lower on Wednesday, while European markets were trading in red, after U.S. President Donald Trump threatened to 'substantially' increase tariffs if China failed to agree a trade deal and also took a swipe at European Union trade policies. Back home, jewellery stocks were in focus with data given by the Gems and Jewellery Export Promotion Council (GJEPC) showing that the gems and jewellery exports continued to be affected following geopolitical tensions as the overall shipments in October declined by 5.49 per cent to Rs 24,583.19 crore compared to the same month last year. The exports stood at Rs 26,010.87 crore in October 2018.

The BSE Sensex ended at 40105.04, down by 240.04 points or 0.59% after trading in a range of 40061.23 and 40447.17. There were 5 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.74%, while Small cap index was down by 1.11%. (Provisional)

The few gaining sectoral indices on the BSE were Energy up by 1.52%, Consumer Durables up by 0.44% and IT up by 0.17%, while Metal down by 2.43%, PSU down by 2.06%, Realty down by 1.89%, Bankex down by 1.86% and Basic Materials down by 1.63% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 3.75%, Reliance Industries up by 3.04%, Hindustan Unilever up by 0.59%, Maruti Suzuki up by 0.34% and NTPC up by 0.17%. (Provisional)

On the flip side, Yes Bank down by 6.58%, SBI down by 3.69%, Axis Bank down by 3.29%, Vedanta down by 3.02% and Sun Pharma down by 2.35% were the top losers. (Provisional)

Meanwhile, amid economic growth slowdown, State Bank of India’s (SBI) Economic Research Department in its Ecowrap report has sharply cut India’s Gross Domestic Product (GDP) growth forecast to 5% for Fiscal Year 2019-20 (FY20) from the earlier projection of 6%. In its report, it said the second quarter GDP growth rate is likely to slip to 4.2% on account of low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure. Though, it also said the economic growth rate will pick up pace in 2020-21 to 6.2%.

In order to propel economic growth, the report said the Reserve Bank of India (RBI) may go for ‘larger rate cuts’ in December monetary policy review. In October, while reducing the key policy rate (repo) by 25 basis points for the fifth time in a row, the RBI had also reduced its growth forecast to 6.1% for 2019-20 from 6.9%. Besides, India’s GDP growth had dipped to about a six-year low of 5% in the first quarter of the current fiscal year.

Terming the decline in September IIP by 4.3% as quite alarming, it said ‘our acceleration rate for 33 leading indicators at 85% in October 2018 is down to just 17% in September 2019, with such decline gaining traction from March 2019’. The report further said that the growth rate in 2019-20 should be looked through the prism of synchronised global slowdown (countries have witnessed 22-716 basis point decline between June 2018 and June 2019, and India cannot be isolated). India is also significantly lower in Economic Uncertainty Index when compared globally.

The CNX Nifty ended at 11836.65, down by 76.80 points or 0.64% after trading in a range of 11823.20 and 11946.80. There were 10 stocks advancing against 40 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia Industries up by 5.02%, TCS up by 3.76%, Reliance Industries up by 2.97%, Nestle up by 1.08% and Bajaj Finserv up by 0.86%. (Provisional)

On the flip side, Yes Bank down by 6.58%, Zee Entertainment down by 4.83%, GAIL India down by 4.83%, Adani Ports &SEZ down by 4.56% and SBI down by 3.66% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 59.37 points or 0.81% to 7,306.07, France’s CAC fell 44.50 points or 0.75% to 5,875.25 and Germany’s DAX was down by 137.92 points or 1.04% to 13,145.59.

Asian markets ended lower on Wednesday after US President Donald Trump's speech at the Economic Club of New York failed to provide any information on ongoing trade deal with China. The US president said a significant phase one trade deal with China ‘could happen soon’ but stressed that he would only accept an agreement that is good for US companies and workers. Trump threatened substantially more tariff hikes on Chinese imports if talks aimed at ending a trade war fail to produce an interim agreement. Worries about growing unrest in Hong Kong also kept sentiment cautious.