Local equities erase gains to turn red; Sensex slips below 40,800 mark

Local equity benchmarks erased all the gains to turn red in morning session, both Sensex and Nifty were trading below their crucial 40,800 and 12,050 marks, respectively. Traders turned concerned with a report which showed that the growth of eight major industries which contracted by 5.2% in September, further fell by 5.8% in October due to a steep decline in the cement, electricity, and other major sectors. Some pessimism spread among the investors as P Chidambaram stated that the lower GDP growth rate of 4.5% was as predicted but warned that third-quarter will be worse. However, losses further remain capped with finance minister Nirmala Sitharmaan’s report that the government will frontload investments worth Rs 100 lakh crore over a five-year period. Traders took note of a report that Reserve Bank may cut interest rates for the sixth straight time on December 5 to support growth that has continued to slip to more than six-year low on slump in manufacturing. Besides, a report highlighted GST collection in November finally crossed the mark. The collection for the last month stood at Rs 1,03,492 crore (8.50 per cent rise from October 2019) out of which CGST’s share was Rs 19,592 crore while SGST contributed Rs 27,144 crore.

On the global turf, Asian markets were trading in green as official data released over the weekend showed that China's factory activity returned to growth in November for the first time in seven months. Back home, Union Minister Dharmendra Pradhan stated the current economic slowdown is ‘temporary’ and a result of the ongoing global trade war between the US and China. The fall in the GDP growth during the second quarter of the current fiscal is ‘cyclical in nature’ and the economy has started moving in the right direction.

The BSE Sensex is currently trading at 40788.59, down by 5.22 points or 0.01% after trading in a range of 40744.13 and 41093.99. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.79%, while Small cap index was down by 0.31%.

The top gaining sectoral indices on the BSE were Telecom up by 6.72%, Energy up by 1.51%, TECK up by 0.34%, Basic Materials up by 0.28% and Oil & Gas was up by 0.17%, while Realty down by 1.38%, Consumer Durables down by 0.91%, PSU down by 0.88%, IT down by 0.82% and Auto was down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 7.30%, Reliance Industries up by 2.48%, Hindustan Unilever up by 0.56%, Kotak Mahindra Bank up by 0.36% and IndusInd Bank was up by 0.17%. On the flip side, Bajaj Finance down by 3.37%, Tech Mahindra down by 2.72%, Yes Bank down by 2.05%, Sun Pharma down by 1.77% and ONGC was down by 1.56% were the top losers.

Meanwhile, talking about Gross Domestic Product (GDP) number of second quarter of current financial year (Q2FY20), Union Minister Dharmendra Pradhan has said the current economic slowdown is temporary.  He said the slowdown in the economy is not because of domestic reasons but the ongoing trade war between the US and China. The trade-tension between the two large economies has adversely impacted several countries.

He said the fall in the GDP growth during the second quarter of the current fiscal is cyclical in nature. India’s economic growth slipped further to hit an over six-year low of 4.5 per cent in July-September of current financial year. The previous low was recorded at 4.3 per cent in the January-March period of 2012-13. The GDP growth was registered at 7 per cent in the corresponding quarter of 2018-19.

The Minister said the fundamentals of the country’s economy are strong and it has started moving in the right direction. He added steel and passenger vehicles sectors in the country have started showing improvement. The sale of two-wheelers is also recorded an upward trend.

The CNX Nifty is currently trading at 12042.50, down by 13.55 points or 0.11% after trading in a range of 12041.35 and 12137.15. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 7.28%, Grasim Industries up by 3.23%, Bharti Infratel up by 2.42%, Reliance Industries up by 2.30% and Zee Entertainment was up by 1.81%. On the flip side, Bajaj Finance down by 3.48%, Tech Mahindra down by 2.81%, Sun Pharma down by 2.45%, Eicher Motors down by 2.36% and Cipla was down by 2.25% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 226.15 points or 0.97% to 23,520.06, Hang Seng increased 94.18 points or 0.36% to 26,440.67, Jakarta Composite soared 71.16 points or 1.18% to 6,082.99, Shanghai Composite gained 10.02 points or 0.35% to 2,882.00, Straits Times advanced 6.41 points or 0.2% to 3,200.33, Taiwan Weighted strengthened 5.41 points or 0.05% to 11,494.98 and KOSPI was up by 2.56 points or 0.12% to 2,090.52.