Post Session: Quick Review

Indian equity benchmarks ended lower on Wednesday. The start of the day was on a positive note as Moody's Investors Service changed its outlook on India's sovereign ratings to stable from negative. Besides, it retained the ratings, both on foreign and domestic currencies, at Baa3. Traders took a note of Care Ratings’ report stated that the weighted average cost for borrowing across the states and maturities has risen to a two-month high of 6.91 per cent, up 6 basis points (bps) over the past week. According to the report, the rise in the yields of state bonds follows the uptick in yields of government securities (G-Secs) in recent days.

However, markets were volatile during the first half of the trading session and slipped in deep red in the second half of the trading session, as the International Monetary Fund expects global economic growth in 2021 to fall slightly below its July forecast of 6%, citing risks associated with debt, inflation and divergent economic trends in the wake of the COVID-19 pandemic. Traders were also cautious amid reports that as global trade picks up pace after the ravages of the pandemic, an industry lobby's survey has found that an overwhelming number of exporters are worried about competitiveness.

On the global front, European markets were trading red. Asian markets settled mostly lower on Wednesday, after the private sector in Hong Kong continued to expand in September, albeit at a slower pace, the latest survey from Markit Economics revealed on Wednesday with a PMI score of 51.7. That's down from 53.3, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, sugar industry’s stocks remained in watch as All India Sugar Trade Association (AISTA) said sugar mills exported an estimated record 7.23 million tonne in the 2020-21 marketing year that ended September 30, with maximum shipments to Indonesia.  Besides, oil & gas industry stocks were also in focus with a substantial increase in the offing in coming days as international oil prices touched seven-year high.

The BSE Sensex ended at 59189.73, down by 555.15 points or 0.93% after trading in a range of 59079.86 and 59963.57. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index was down by 1.22%, while Small cap index down by 0.55%.

The top losing sectoral indices on the BSE were Metal down by 2.98%, Healthcare down by 1.68%, Consumer Durables down by 1.53%, Industrials down by 1.53% and Basic Materials down by 1.47%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were HDFC Bank up by 1.00%, HDFC up by 0.08% and Bajaj Finance up by 0.08%. On the flip side, Indusind Bank down by 3.38%, Tata Steel down by 2.81%, Bajaj Auto down by 2.39%, HCL Tech. down by 2.25% and Sun Pharma down by 2.02% were the top losers.

Meanwhile, in a big relief to the telecom sector, the government is considering withdrawing legal cases against telecom companies, involving disputes of about Rs 40,000 crore. The Department of Telecom (DoT) has said that the telecom sector is passing through a financial stress due to various circumstances and telecom services providers are making losses.

It has cited representation from the Indian Banks' Association that adverse developments in the telecom sector may lead to failures, vanishing competition, duopoly, unsustainable operations and severe loss for the banking system which has a huge exposure to this sector.

DoT has asked the Supreme Court for three weeks' time to enable ''the central government to take an informed decision whether to proceed with the present appeal or not'' and requested that the case be adjourned for a period of four weeks.

The CNX Nifty ended at 17646.00, down by 176.30 points or 0.99% after trading in a range of 17613.15 and 17884.60. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.72%, Tata Consumer Products up by 2.40%, UPL up by 1.77%, Britannia up by 1.45% and HDFC Bank up by 1.22%. On the flip side, SBI Life Insurance down by 3.95%, Hindalco down by 3.92%, Indusind Bank down by 3.14%, JSW Steel down by 2.96% and Tata Steel down by 2.81% were the top losers.

European markets were trading red, UK’s FTSE 100 fell 95.12 points or 1.34% to 6,981.98, France’s CAC dropped 119.32 points or 1.81% to 6,456.96 and Germany’s DAX was down by 314.38 points or 2.07% to 14,880.11.

Asian markets settled mostly lower on Wednesday on worries about inflation and surging US Treasury yields with investors await US payrolls data later in the week, while oil prices held near new multi-year highs. Concerns over the debt crises of Chinese property developers and the lack of progress in talks between US lawmakers on raising the debt limit also weighing on market sentiments. Chinese markets remained closed for Golden Week holidays. Japanese shares declined sharply as modest approval ratings for the Japan's new prime minister Fumio Kishida disappointed investors. Hong Kong shares ended down after a survey showed the country's private sector expanded at a slower pace in September with a PMI score of 51.7.