Bears hold tight grip on Dalal Street; Sensex falls over 0.60%

Bears held tight grip on the Dalal Street in Tuesday’s trading session, with the Sensex and the Nifty losing over 0.60% each. After a cautious start, key indices remained sluggish during the whole day, as the Central Goods and Services Tax (GST) collection fell short of the budged estimate by nearly 40% during the April-November period of 2019-20. Adding more worries among market participants, a private report indicated that India is expected to witness a marginal 7 per cent rise in job creation in the October-March period of this financial year, as subdued economic conditions have dampened employment outlook.

Bourses extended their losses in second half of the session to settle near day’s low points, after rating agency, Fitch Ratings said that India's non-banking financial companies will look increasingly to offshore financing as local funding conditions may remain under pressure. The rating agency expects offshore access to be restricted to larger entities with stronger credit fundamentals. Traders also took a note of Minister of State for Finance Anurag Singh Thakur’s statement that the recent spike in retail inflation is mainly due to high food prices and the government is taking steps to moderate the volatility in prices.

On the global front, European markets were trading in red, as Finland's industrial production fell for the second straight month in October. The figures from Statistics Finland showed that industrial production dropped by a seasonally adjusted 0.5 percent month-on-month in October, following a 0.2 percent fall in September. Asian markets ended mostly lower, after China's consumer price inflation accelerated to the highest since early 2012 in November as disruption to pork supply pushed up food inflation. Consumer price inflation rose more-than-expected to 4.5 percent in November from 3.8 percent in October.

Back home, auto stocks ended lower, after the Society of Indian Automobile Manufacturers’ report showed that domestic passenger vehicle sales declined 0.84 per cent to 2,63,773 units in November from 2,66,000 units in year-ago period. Further, telecom stocks remained in watch, amid Crisil Ratings’ report that a tariff uptick of upto 50% in telcom sector may double the industry's operating revenue by next fiscal. The rating firm concluded that revised tariffs will improve the average revenue per user (ARPU)- a key industry metric and every Rs one increase in ARPU will add to Rs 1000 crore to industry's EBIDTA.

Finally, the BSE Sensex lost 247.55 points or 0.61% to 40,239.88, while the CNX Nifty was down by 80.70 points or 0.68% to 11,856.80.

The BSE Sensex touched high and low of 40,588.81 and 40,208.70, respectively and there were 09 stocks advancing against 22 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.11%, while Small cap index was down by 1.02%.

The top losing sectoral indices on the BSE were Utilities down by 2.16%, PSU down by 1.88%, Power down by 1.83%, Oil & Gas down by 1.73% and Metal down by 1.38%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.06%, Hindustan Unilever up by 1.05%, HDFC Bank up by 0.55%, ICICI Bank up by 0.48% and Bajaj Auto up by 0.32%. On the flip side, Yes Bank down by 10.05%, Indusind Bank down by 2.66%, Power Grid down by 2.64%, NTPC down by 2.53% and ITC down by 2.47% were the top losers.

Meanwhile, Minister of State for Finance Anurag Singh Thakur has said that public sector banks (PSBs) returned to profitability by posting an aggregate profit of Rs 3,221 crore in the first half of the current fiscal (H1FY20). He noted that PSBs had posted huge losses in 2017-18 and 2018-19 financial years due to heavy provisioning for non-performing assets (NPAs) and other contingencies.

The minister has said that PSBs had posted aggregate operating profits during 2017-18 and 2018-19 of Rs 1,55,603 crore and Rs 1,53,871 crore respectively. However, he said they made aggregate provisions for NPAs and other contingencies of Rs 2,40,973 crore and Rs 2,35,623 crore in FY2018 and FY2019, respectively. He noted that this resulted in aggregate net losses of Rs 85,370 crore and Rs 81,752 crore in 2017-18 and 2018-19 respectively.

Citing data of the Reserve Bank of India (RBI) on global operations of PSBs, Thakur said their aggregate gross advances increased to Rs 68.76 lakh crore as on 31 March 2014 from Rs 25.03 lakh crore as on March end 2008. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown.

The CNX Nifty traded in a range of 11,953.20 and 11,844.70. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 1.26%, Hindustan Unilever up by 1.10%, Cipla up by 1.09%, Eicher Motors up by 1.01% and Bharti Airtel up by 0.85%. On the flip side, Yes Bank down by 10.40%, Zee Entertainment down by 5.10%, GAIL India down by 4.39%, JSW Steel down by 2.97% and BPCL down by 2.90% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 93.54 points or 1.29% to 7,140.36, France’s CAC fell 60.58 points or 1.04% to 5,776.67 and Germany’s DAX was down by 199.21 points or 1.52% to 12,906.40.

Asian markets ended mostly lower on Tuesday, on a muted note as investors refrained from making big bets ahead of key central bank meetings and the rapidly approaching December 15 deadline for more US tariffs on Chinese imports. Rising tensions between the United States and North Korea also weighed on markets after North Korea conducted a ‘very important test’ at a long-range missile launch site. Though, Chinese shares ended slightly higher, even after data from the National Bureau of Statistics showed China's consumer price inflation accelerated to the highest since early 2012 in November, while producer prices declined for the fifth consecutive month in November.