Bourses continue to show sluggish trend in late afternoon session

In highly volatile trading session, Indian equity markets continued to show a sluggish trend in late afternoon session on account of selling in frontline counters. Weakness was also visible in the broader markets i.e. the BSE Mid cap index and Small cap index. Traders overlooked that India and the Gulf Cooperation Council (GCC) are expected to launch negotiations for a free trade agreement on November 24 with an aim to boost economic ties between the two regions. GCC is a union of six countries in the Gulf region -- Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain. In scrip specific development, One 97Communications traded with huge losses after SoftBank Group Corp on sold a 4.5% stake through block deals for $200 million. On the global front, Asian markets were trading mostly in red following similar declines in their U.S. peers, while concerns over more hawkish moves by the Federal Reserve and rising COVID-19 cases in China also weighed. European markets were trading mostly in green as Siemens jumped after posting an upbeat quarterly profit, while investors awaited the UK budget, which is expected to restore confidence in Britain's economy. 

The BSE Sensex is currently trading at 61917.76, down by 62.96 points or 0.10% after trading in a range of 61768.96 and 62050.80. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.26%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.36%, Industrials up by 0.76%, Telecom up by 0.71%, PSU up by 0.26% and Bankex was up by 0.09%, while Consumer Durables down by 1.32%, Auto down by 1.02%, Healthcare down by 0.62%, IT down by 0.57% and Realty was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.04%, Power Grid up by 0.94%, Bharti Airtel up by 0.84%, ICICI Bank up by 0.74% and Reliance Industries up by 0.66%. On the flip side, Titan Company down by 1.94%, Maruti Suzuki down by 1.34%, Mahindra & Mahindra down by 1.15%, Dr. Reddy's Lab down by 1.08% and HCL Tech down by 1.05% were the top losers.

Meanwhile, credit rating agency Crisil in its latest report has said that as much as 43% of India’s micro, small and medium enterprises (MSME) universe by value is expected to remain below the pre-pandemic (fiscal 2020) level in terms of earnings before interest, tax, depreciation and amortisation (EBITDA) margin this fiscal (FY23) because of inability to completely pass on the high prices in some commodities as well as an unfavourable exchange rate.

The report stated that almost all the MSMEs, however, are expected to cross the pre-pandemic level of revenue. It said assessing the pandemic’s impact on MSMEs has been a challenge because of information asymmetry and lack of high-frequency data points in this space. The report plugs this hole by covering 69 sectors and 147 clusters that logged aggregate revenue of Rs 56 lakh crore, representing 20-25% of India’s gross domestic product (implying coverage of two-thirds of the MSME universe).

According to the report, sectors such as chemicals and construction roads are expected to witness EBITDA margin contraction to the tune of 250-300 basis points (bps) and 200-250 bps respectively this fiscal compared with the pre-pandemic levels on account of rise in crude prices. Agriculture-based sectors such as milk & dairy and packaged foods are expected to witness EBITDA margin contraction of 50-100 bps on account of rising milk prices. Notably, a few sectors are yet to reach the pre-pandemic level in terms of revenue. These include air freight & courier services and travel agents, which have lagged because of inherent structural issues. For instance, the shift towards online travel aggregators has changed the dynamics of the travel industry, impacting SMEs. Similarly, digitalisation has impacted courier SMEs.

The CNX Nifty is currently trading at 18383.85, down by 25.80 points or 0.14% after trading in a range of 18350.30 and 18417.60. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tata Consumer up by 2.58%, Larsen & Toubro up by 2.00%, Adani Enterprises up by 1.14%, HDFC Life Insurance up by 1.13% and Power Grid up by 1.01%. On the flip side, Titan Company down by 2.04%, Apollo Hospital down by 1.72%, Tata Motors down by 1.63%, Eicher Motors down by 1.58% and Maruti Suzuki down by 1.30% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 210.82 points or 1.15% to 18,045.66, Nikkei 225 slipped 97.73 points or 0.35% to 27,930.57, KOSPI fell 34.55 points or 1.39% to 2,442.90, Shanghai Composite declined 4.55 points or 0.15% to 3,115.43 and Taiwan Weighted was down by 2.12 points or 0.01% to 14,535.23. On the flip side, Straits Times advanced 12.82 points or 0.39% to 3,278.99 and Jakarta Composite was up by 30.61 points or 0.44% to 7,044.99.

European markets were trading mostly in green, France’s CAC increased 12.54 points or 0.19% to 6,619.76 and Germany’s DAX was up by 104.03 points or 0.73% to 14,338.06. On the flip side, UK’s FTSE 100 was down by 16.79 points or 0.23% to 7,334.40.