Local equities remain volatile in morning deals

Local equity markets remained volatile amid weak CPI inflation numbers and are trading flat below the neutral line on account of profit booking by investors in some specific sectors such as Telecom, Metal, Energy and Oil & Gas. A level of pressure was seen on frontline stocks, especially IndusInd Bank and Bharti Airtel. Traders remain cautious with CPI inflation numbers as it hit a 16-month peak of 4.62% in October, as food inflation jumped to 7.89% - the highest since July 2016. This could limit the quantum of the repo rate cut in December, even as a slowdown in economic growth deepens. Some pessimism came with a private report which highlighted that even as the retail inflation crossed the RBI’s comfort level for the first time in over a year, it may continue to remain higher in the remaining fiscal year. This may further complicate the policy decisions in the wake of the ongoing slowdown. Market participants took note of report that in perhaps the first instance, the finance ministry has kicked off the exercise to formulate the next budget by seeking suggestions on changes in direct and indirect taxes from industry and trade associations.

On the global front, Asian markets were trading in mostly in red after weaker-than-expected economic data from China and Japan, and reports of a sticking point in US-China trade negotiations. Back home, Department of Telecom (DoT) has issued notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis.

The BSE Sensex is currently trading at 40095.65, down by 20.41 points or 0.05% after trading in a range of 40026.99 and 40200.30. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.02%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were IT up by 0.56%, Consumer Durables up by 0.50%, Consumer Disc up by 0.38%, Realty up by 0.31% and Capital Goods was up by 0.20%, while Telecom down by 3.74%, Metal down by 1.05%, Energy down by 0.67%, Oil & Gas down by 0.58% and PSU was down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.86%, Infosys up by 2.39%, Maruti Suzuki up by 1.06%, Axis Bank up by 0.76% and Sun Pharma was up by 0.72%. On the flip side, IndusInd Bank down by 2.93%, Bharti Airtel down by 2.66%, Tata Motors - DVR down by 2.23%, Tata Motors down by 2.02% and SBI was down by 1.09% were the top losers.

Meanwhile, State Bank of India’s (SBI) Economic Research Department in its Ecowrap report has said that credit growth picked up rapid pace beginning September 2019 - jumping by Rs 1.08 lakh crore - mainly helped by housing, NBFC and lately MSME. The report further said the week up to Diwali has shown an increase in currency in circulation of Rs 30,871 crore from the previous week, thereby showing that people have been demanding cash in the festive season.

It mentioned that the sectoral data for the month of September 2019, indicates that for the first time in current fiscal credit to industry turned positive and jumped by Rs 9,700 crore, of which Rs 8,200 crore is attributable to MSME sector. The report highlighted, in September, the jump in retail credit at Rs 51,900 crore was nearly double that of August, of which housing loans jumped by 2.6 times.

Bank lending to NBFC sector has remained robust and the YTD growth of such is highest across all segments at 11.3 per cent. Besides, it said ‘we are less hopeful of a growth pick up in second quarter 2019-20. Out of 26 indicators, only 5 indicators were showing acceleration in September. This indicates the extend of demand slowdown in the economy is still significant and would take longer time to recover.’

The CNX Nifty is currently trading at 11824.50, down by 15.95 points or 0.13% after trading in a range of 11802.65 and 11862.30. There were 21 stocks advancing against 27 stocks declining, while 2 stocks remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 3.08%, Infosys up by 2.41%, Maruti Suzuki up by 1.22%, Eicher Motors up by 1.06% and Titan Company was up by 1.03%. On the flip side, Bharti Infratel down by 6.44%, IndusInd Bank down by 2.88%, Bharti Airtel down by 2.86%, Tata Motors down by 2.11% and Hindalco was down by 1.84% were the top losers.

Asian markets are trading mostly in red, Hang Seng decreased 219.99 points or 0.83% to 26,351.47, Nikkei 225 slipped 161.44 points or 0.69% to 23,158.43, Taiwan Weighted dropped 17.04 points or 0.15% to 11,450.79, Jakarta Composite lost 62.31 points or 1.01% to 6,080.19 and Straits Times down by 9.32 points or 0.29% to 3,229.90.

On the other hand, KOSPI rose 5.05 points or 0.24% to 2,127.50 and Shanghai Composite gained 1.99 points or 0.07% to 2,907.23.