Bears tighten grip on Dalal Street; Sensex loses over 200 points

Bears tightened their grip on Dalal Street on the last trading day of the week, with Sensex and Nifty ending lower by over 200 and 50 points, respectively.  After a cautious start, key benchmarks remained negative throughout the day, as credit rating agency ICRA expects further deterioration in the growth of India's GDP to 4.7 per cent in Q2 of FY2020, due to weakening momentum in industry. Adding more worries among investors, Former Reserve Bank of India (RBI) governor C Rangarajan said that reaching the $5-trillion Gross Domestic Product (GDP) target by 2025 is simply out of question at the current growth rate.

Indices extended their losses in the second half of the session, despite positive cues from global markets. The street remained pessimistic with a report that merger & acquisition (M&A) deals in the month of October dropped by 45 percent in value terms and 40 percent in volume terms compared to the corresponding period last year.  Traders paid no heed towards the Confederation of Indian Industry’s (CII) jointly survey report, conducted along with Grant Thornton, that over 95 percent of businesses believe that good corporate governance practices help organizations achieve better operational and financial results.

On the global front, European markets were trading in green, as France private sector logged strong growth in November. The flash survey data from IHS Markit showed that the composite output index rose slightly to 52.7 in November from 52.6 in October, but below the forecast of 52.8. Asian markets ended in green, despite Japan's private sector continued to contract in November but moved closer to stagnation. The survey data from IHS Markit showed that the Jibun Bank flash composite output index rose to 49.9 in November from 49.1 in October. A score below 50 indicates contraction in the sector.

Back home, telecom stocks ended lower, after Fitch Ratings said the two-year moratorium on payment of spectrum dues for telecom companies and hike in tariffs are unlikely to be sufficient to offset the impact of the Supreme Court ruling on past statutory dues on Bharti Airtel and Vodafone-Idea. Further, leather industry stocks remained in watch, as Council for Leather Exports (CLE) said that leather exporters from India have penetrated new markets such as the US, Canada, Russia, Japan, Australia, and South Korea to tap increasing demands in these countries and boost the country's overall exports.

Finally, the BSE Sensex lost 215.76 points or 0.53% to 40,359.41, while the CNX Nifty was down by 54.00 points or 0.45% to 11,914.40.

The BSE Sensex touched high and low of 40,653.17 and 40,276.83, respectively and there were 12 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.14%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Metal up by 2.08%, Power up by 0.72%, Utilities up by 0.67%, Basic Materials up by 0.60% and Energy up by 0.47%, while IT down by 2.21%, TECK down by 2.02%, Telecom down by 1.63%, Capital Goods down by 0.98% and Bankex down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.74%, NTPC up by 2.35%, Vedanta up by 2.27%, ONGC up by 2.14% and Power Grid up by 1.53%. On the flip side, Infosys down by 2.89%, TCS down by 2.20%, Asian Paints down by 2.17%, HCL Tech. down by 1.82% and Kotak Mahindra Bank down by 1.68% were the top losers.

Meanwhile, public sector banks (PSBs) have disbursed loans worth Rs 2.53 lakh crore during the festive month of October, as part of a government-mandated outreach programme.  In order to boost credit availability in the economy, Finance Minister Nirmala Sitharaman had in September asked banks to reach out to customers and signal their willingness to lend following all prudential norms.

Under Finance Minister’s direction, outreach camps or loan melas were conducted across 374 districts across the country during October 2019. An amount of Rs 1,05,599 crore was disbursed towards new term loan, while Rs 46,800 crore was given as working capital loan. So fresh lending, including new term loans, was 60 percent of the total disbursement. The banks credited Rs 19,627.26 crore to the non-banking financial companies (NBFCs) during the month of October, which remained under stress due to liquidity crunch following IL&FS criris.

As per the data, corporates availed maximum of Rs 1.22 lakh crore during the month of October, followed by agri loans (Rs 40,504 crore) and MSMEs (Rs 37,210 crore). Home loans to the tune of Rs 12,166 crore were given by banks while vehicle loans stood at Rs 7,058 crore. Out of total credit, Rs 19,627.26 crore was given to NBFCs, the co-origination alone was to the tune of Rs 15,297.18 crore and pool buyout was Rs 1,453.13 crore.’

The CNX Nifty traded in a range of 11,968.10 and 11,883.50. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.22%, Eicher Motors up by 4.08%, Zee Entertainment up by 3.13%, NTPC up by 2.52% and JSW Steel up by 2.47 %. On the flip side, Bharti Infratel down by 4.07%, Infosys down by 2.85%, TCS down by 2.41%, Asian Paints down by 2.18% and UPL down by 2.11% were the top losers.

European markets were trading in green, UK’s FTSE 100 increased 82.02 points or 1.13% to 7,320.57, France’s CAC increased 13.45 points or 0.23% to 5,894.66 and Germany’s DAX was up by 23.51 points or 0.18% to 13,161.21.

Asian markets ended mostly higher on Friday on fresh hopes that the world's top two economies may delay their plans to roll out new tariffs, originally slated for December 15, in the latest efforts to resolve the prolonged dispute. Japanese shares ended higher on bargain hunting following three straight days of losses and the yen weakened against the dollar. Though, Chinese shares ended lower as China revised its nominal gross domestic product estimate for 2018 by 2.1 percent, reflecting more complete measures of the services sector and assets. Worries that a ‘phase one’ trade deal between the United States and China might not occur until next year, also weighed on investor sentiment.