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Domestic markets continue to trade under selling pressure
Oct-19-2018

Barometer gauges continued to droop under selling pressure in the early noon session with Nifty and Sensex posting losses of 115 and 324 points respectively amid weak cues from Asian markets. Sustained selling in key heavyweights along with broader indices kept the markets way below the neutral line. In stock specific development, Shares of Reliance Industries (RIL) has dipped after a mixed bag results for the quarter ended September 2018 (Q2FY19) with its retail and digital services (telecom; Jio) businesses continuing to post strong growth, while its core refining business performance was a bit disappointing amid high expectations. Some concerns came with report that consumer confidence declined in September due to worries about savings, investment and personal finances for household expenses. Adding to the woes, confirming fears of a jobless growth in the country, Care Ratings’ report highlighted that employment growth in corporate India moderated to 3.8 percent in FY18, from 4.2 percent in FY17, with jobs in smaller companies being hit the hardest.

On the global front, Asian markets were trading mostly in red as political turbulence ferments due to concerns about trade disputes, rising US interest rates and Italy’s free-spending budget. Back home, stocks related to Non-life insurance were in focus with Insurance Regulatory and Development Authority of India (Irdai) data showing that non-life insurance companies reported a rise of 9 percent premium income to Rs 19,098.51 crore in September.

The BSE Sensex is currently trading at 34455.14, down by 324.44 points or 0.93% after trading in a range of 34288.25 and 34563.29. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.06%, while Small cap index down by 1.61%.

The few gaining sectoral indices on the BSE were Telecom up by 0.56%, Utilities up by 0.13% and PSU up by 0.08%, while Energy down by 3.30%, IT down by 2.20%, TECK down by 1.96%, Basic Materials down by 1.49% and Auto was down by 1.40% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.88%, Sun Pharma by 1.47%, ICICI Bank up by 0.95%, ITC up by 0.54% and Bharti Airtel up by 0.54%. On the flip side, Yes Bank down by 5.39%, Reliance Industries down by 4.91%, Tata Motors - DVR down by 3.15%, Infosys down by 2.76% and Hero MotoCorp down by 2.60% were the top losers.

Meanwhile, confirming worries of jobless growth in India, Credit rating agency Care Ratings in its latest report has stated that job creation by corporate India dropped to 3.8 percent in 2017-18 from 4.2 percent growth achieved in 2016-17, with jobs in smaller firms being hit the hardest. It pointed out that the moderation in employment growth is reflective of the proposition that higher economic growth is weakly translating into higher job creation.

Based on an analysis of over 1,600 corporates, the report noted that smaller companies, with net sales of less than Rs 500 crore, have showed contraction in employment growth, while larger companies, with over Rs 500 crore sales, had a positive employment growth in FY18. It also said that with a 14 percent growth, the finance sector led the pack in job creation, followed by retail (13.05 percent), construction (9.6 percent), infrastructure (9 percent) and ratings (8 percent). On the negative growth front, it indicated that telecom topped the chart with a 7.6 percent decline in job creation, followed by education and training registering a 5.3 percent dip.

According to the report, from a cost perspective, the overall employee cost came at 8.3 percent in FY18, while the average employee cost rose 4.3 percent. It also said that just like growth in total permanent employees has seen a moderation in FY18 over FY17, both employee cost and average employee cost also witnessed a moderation in FY18 over FY17.

The CNX Nifty is currently trading at 10337.85, down by 115.20 points or 1.10% after trading in a range of 10290.75 and 10380.10. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 3.08%, Bharti Infratel up by 2.31%, HPCL up by 1.76%, Sun Pharma up by 1.58% and Asian Paints up by 1.54%. On the flip side, Indiabulls Housing down by 12.23%, Yes Bank down by 5.76%, Reliance Industries down by 5.32%, HCL Tech down by 3.52% and Infosys down by 2.89% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 0.31 points or 0.01% to 3,069.36, Jakarta Composite decreased 3.63 points or 0.06% to 5,841.61, Nikkei 225 decreased 126.08 points or 0.56% to 22,532.08 and Taiwan Weighted decreased 34.47 points or 0.35% to 9,919.26.

On the flip side, Hang Seng increased 265.610 points or 1.03% to 25,720.16, Shanghai Composite increased 47.60 points or 1.88% to 2,534.02 and KOSPI increased 8.71 points or 0.4% to 2,157.02.

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