Local indices end with heavy losses; Nifty drops below 12,900 level

Wednesday turned out to be a dismal day of trade for Indian equity benchmarks, where key gauges went home with a cut of over one and half percent each, breaching their crucial 43,850 (Sensex) and 12,900 (Nifty) levels, as investors booked profit across-the-board. Both indices had scaled fresh record highs in the opening session, as sentiments got a boost after Nilesh Shah, a part-time member of the economic advisory council to the Prime Minister, said the GDP contraction will improve to higher single digits in the September quarter, and the economy will be back to positive growth by the March quarter. Some support also came with CII National Committee on Retail Chairman Shashwat Goenka’s statement that a cohesive national retail policy would go a long way in reviving the sector and help generate up to 30 lakh additional jobs in the country by 2024, He said a thorough national retail policy would help the sector bounce back and grow exponentially in the years to come.

However, benchmark indices erased all gains and slipped into the red in late morning deals, as the sentiments turned pessimistic with S&P Global Ratings’ statement that non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11 per cent of gross loans in the next 12-18 months. Some cautiousness also came after a senior finance ministry official said that India's score on protection of minority investors compiled by the World Bank as part of the Ease of Doing Business rankings has slipped recently and there is a need for stakeholders to improve on this aspect. Traders remain concerned even after Union Commerce and Industry Minister Piyush Goyal has said that the results of the second quarter of major companies show that profitability of most of them has gone up, indicating that the Indian industry has utilized the Covid period to do the belt-tightening, improve the product-mix, and focus on quality and productivity.

On the global front, Asian markets ended mostly in red, while European markets were trading mostly in red, despite optimism that progress in the development of coronavirus vaccines would hasten the pace of economic recovery and as the formal start of U.S. President-elect Joe Biden's transition to the White House eased some of the political uncertainty. Back home, on the sectoral front, aviation industry stocks were in focus with ICRA’s report that the Maharashtra government’s decision to make coronavirus negative report mandatory for those entering the state from four certain states is expected to impact the domestic travel demand further. There was be some buzz in automobile industry stocks with Ind-Ra’s report that India's two-wheeler exports will see sustained growth in the second half of next fiscal after witnessing temporary hurdles in the first half this year due to COVID-19 and weakened crude oil prices, hurting the economies of key exporting destinations.

Finally, the BSE Sensex fell 694.92 points or 1.56% to 43,828.10, while the CNX Nifty was down by 196.75 points or 1.51% to 12,858.40.

The BSE Sensex touched high and low of 44,825.37 and 43,757.97, respectively and there were 3 stocks advancing against 27 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.76%, while Small cap index was down by 1.13%.

The only gaining sectoral index on the BSE was Oil & Gas up by 0.08%, while Telecom down by 2.20%, Realty down by 2.19%, Bankex down by 2.00%, Healthcare down by 1.89% and Auto down by 1.74% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 6.25%, Power Grid up by 0.33% and Indusind Bank up by 0.10%. On the flip side, Kotak Mahindra Bank down by 3.22%, Axis Bank down by 3.16%, Sun Pharma down by 2.61%, HDFC Bank down by 2.50% and Bajaj Finance down by 2.49% were the top losers.

Meanwhile, CII National Committee on Retail Chairman Shashwat Goenka has said that a cohesive national retail policy would go a long way in reviving the sector and help generate up to 30 lakh additional jobs in the country by 2024, He said a thorough national retail policy would help the sector bounce back and grow exponentially in the years to come.

Goenka has noted that as per industry estimates, around 5 crore people are employed in the organised retail sector in India. He also said moving forward as the industry revives from its slump, new and emerging models need to be deliberated in order to accelerate the recovery process. He stated that the industry is still hampered by the loss in the demand therefore proactive steps need to be taken in order to revive consumer confidence as well.

To address these challenges and bottlenecks faced by the sector across formats, he believed that the government should come up with a cohesive model retail policy. He also said today more than ever it is imperative to create a necessary environment for conducive growth with the national retail policy. He added that by implementing a cohesive retail policy the government can fuel the sector's growth which can generate up to 30 lakh additional jobs by 2024, apart from creating indirect job opportunities in allied sectors.

The CNX Nifty traded in a range of 13,145.85 and 12,833.65 and there were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.91%, GAIL India up by 1.65%, Adani Ports & SEZ up by 1.44%, SBI Life Insurance up by 1.32% and Coal India up by 0.49%. On the flip side, Eicher Motors down by 3.72%, Axis Bank down by 3.44%, Kotak Mahindra Bank down by 2.97%, Sun Pharma down by 2.53% and Bajaj Finance down by 2.43% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 23.21 points or 0.36% to 6,408.96 and Germany’s DAX fell 25.71 points or 0.19% to 13,266.73, while France’s CAC was up by 2.30 points or 0.04% to 5,560.72.

Asian markets ended mostly lower on Wednesday. However, Japanese shares climbed with vaccine optimism and fading US election uncertainty, despite news that the Tokyo Metropolitan Government plans to ask restaurants that serve alcohol to shorten operating hours for three weeks amid a surge in corona virus cases. The formal start of US president-elect Joe Biden’s transition to the White House eased some of the political uncertainty.