Weak trade continues over Dalal Street

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading in red terrain. Negative cues from other Asian markets impacted domestic sentiments. Traders were cautious, as India underlined that efforts to drive low carbon development pathways in the industry sector are critical for achieving the goals of the Paris Agreement. The street overlooked reports that terming the 'Services' sector as the key driver of India's economic growth, Union Commerce and Industry Minister Piyush Goyal has said that the country is poised to achieve a services export target of $1 trillion by the year 2030.

On the global front, Asian markets were trading mostly in red, after consumer prices in China were up 1.5 percent on year in October, the National Bureau of Statistics said on Wednesday. That exceeded expectations for an increase of 1.4 percent following the 0.7 percent gain in September. On a monthly basis, consumer prices rose 0.7 percent - in line with forecasts and up from the flat reading in the previous month.

The BSE Sensex is currently trading at 60166.79, down by 266.66 points or 0.44% after trading in a range of 59967.45 and 60295.26. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.36%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Telecom up by 1.44%, Auto up by 0.56%, Energy up by 0.55%, Oil & Gas up by 0.40% and Industrials up by 0.26%, while Metal down by 1.87%, Realty down by 1.56%, Bankex down by 0.88%, Basic Materials down by 0.79% and Consumer Durables down by 0.78% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.10%, Bharti Airtel up by 1.72%, Reliance Industries up by 0.73%, Sun Pharma up by 0.61% and Dr. Reddy's Lab up by 0.59%. On the flip side, Tata Steel down by 2.98%, Indusind Bank down by 2.46%, HDFC down by 1.41%, Asian Paints down by 1.41% and ICICI Bank down by 1.39% were the top losers.

Meanwhile, borrowing cost for the states has declined sharply to 6.81 percent at the weekly auctions held on November 9, mainly because they raised shorter tenor funds and 37 percent less than notified. Last week, the cost of debt for three states had peaked to the highest this fiscal at 7.02 per cent, up 12 bps over the previous week, despite most of the notified states drawing down less or not participating in the auctions.

According to rating agencies ICRA and Care Ratings, the reason for the lower cut-off at 6.81 per cent was driven by the cut in the Central excise duty and VAT by some states on petrol and diesel but left the spread between the 10-year G-secs and state debt widened to 64 bps from 61 bps last week, as the duty cut will cushion the inflation. The Rs 17,000 crore GST compensation was another reason for the lesser appetite for funds this week. Also the share of the 10-year state bonds in total issuance in Q3 declined to 44 per cent from 52 per cent in Q2, leading to the massive decline in the cut-off. As a result, the weighted average cut-off decreased by 21 bps to 6.81 per cent, led by a decline in cut-offs across tenors.

According to Care Ratings, the weighted average cost of borrowings across states and tenures declined by 21 bps to 6.81 per cent from last week, while the weighted average yield of the 10-year state bond was 6.93 per cent, lower by 6 bps from the last week. So far this fiscal, the state borrowings have declined by 16.4 per cent on an annualised basis, and today's auction was a whopping 37 per cent lower than indicated as six states undertook lower-than-indicated borrowings while Andhra borrowed Rs 1,000 crore even though it had not earlier indicated to do so.

The CNX Nifty is currently trading at 17965.05, down by 79.20 points or 0.44% after trading in a range of 17915.00 and 17973.45. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.16%, UPL up by 2.57%, Britannia up by 2.13%, Bharti Airtel up by 1.70% and Reliance Industries up by 0.79%. On the flip side, Tata Steel down by 3.08%, Hindalco down by 2.60%, Indusind Bank down by 2.59%, JSW Steel down by 2.51% and Coal India down by 1.99% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 292.19 points or 1.18% to 24,520.94, Nikkei 225 slipped 150.37 points or 0.51% to 29,135.09, KOSPI fell 30.65 points or 1.03% to 2,931.81, Shanghai Composite declined 42.20 points or 1.2% to 3,464.80, Straits Times trembled 17.98 points or 0.55% to 3,225.44 and Jakarta Composite lost 11.05 points or 0.17% to 6,658.88. On the flip side, Taiwan Weighted strengthened 1.39 points or 0.01% to 17,542.75.