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Bourses end volatile session near day’s low points
Nov-21-2019

Indian equity bourses ended the highly volatile day near their intraday low points. The start of the day was slightly higher, amid the retirement fund body, Employment Provident Fund Organisation’s (EPFO) latest ‘Provisional Estimate of Net Payroll’ data report showing that India created 9,98,051 new jobs in the month of September 2019 as against revised figure of 9,41,800 in August 2019. As per the report, the maximum jobs were created in the age bracket of 22-25. But soon, markets turned volatile, impacted by a private report stating that India’s economic growth probably hit a new low last quarter, with early forecasts showing expansion below 5%. 

In the last hour of the trading session, key markets extended their losses to settle in negative terrain, on the back of weak cues from the global markets. Investors remained anxious with the Commerce and Industry Minister Piyush Goyal’s statement that the government did not join the mega free trade agreement RCEP as the grouping did not address the outstanding issues and concerns of India. The street paid no heed towards the Reserve Bank of India’s (RBI) latest data report stating that bank credit rose by 8.07 percent to Rs 98.47 trillion, while deposits grew 9.92 percent to Rs 129.98 trillion in the fortnight ended November 6.

On the global front, European markets were trading in red, as Denmark's consumer confidence fell for the third straight month in November. The survey data from Statistics Denmark showed that the consumer confidence index fell to 1.4 in November from 1.7 in October. In September, the confidence index reading was 4.3. Asian markets ended in red, despite Japan's all industry activity rose in September. The figures from the Ministry of Economy, Trade and Industry showed that the all industry activity index rose 1.5 percent month-on-month in September, after remaining unchanged in August.

Back home, the realty sector stocks ended higher, despite a private report stating that residential projects worth around $66 billion are facing bankruptcy proceedings, owing to the financial crisis and the slowdown in the real estate sector. Further, stocks related to the automobile sector remained in watch, after credit rating agency, India Ratings and Research in its latest report said that the implementation of the BS VI emission norms from April 1, 2020 could create short-term headwinds for the commercial vehicle (CV) segment.

Finally, the BSE Sensex lost 76.47 points or 0.19% to 40,575.17, while the CNX Nifty was down by 30.70 points or 0.26% to 11,968.40.

The BSE Sensex touched high and low of 40,744.85 and 40,534.12, respectively and there were 11 stocks advancing against 20 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.73%, while Small cap index was down by 0.43%.

The few gaining sectoral indices on the BSE were Realty up by 0.45%, Capital Goods up by 0.28%, IT up by 0.08% and TECK up by 0.01%, while Metal down by 2.23%, Oil & Gas down by 2.14%, Telecom down by 2.08%, Energy down by 1.27% and Basic Materials down by 1.25% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.15%, Larsen & Toubro up by 0.89%, Bajaj Auto up by 0.82%, SBI up by 0.81% and HDFC Bank up by 0.75%. On the flip side, Tata Steel down by 3.35%, Bharti Airtel down by 2.52%, Yes Bank down by 2.43%, ONGC down by 1.98% and ITC down by 1.96% were the top losers.

Meanwhile, Cellular Operators Association of India (COAI) Director General Rajan Mathews has said that the combination of three things -- two-year moratorium for telecom companies to pay their spectrum dues, proposed tariff hikes in mobile phone call and data charges and modifying adjusted gross revenue will provide a relief to debt-laden telecom sector. However, he said the deferred payment will be adjusted in balance annual instalments to be paid by the service providers for spectrum they purchased through auctions.

Mathews has said that as per legal opinion given by legal stalwarts that DoT is well within its right to modify definition of AGR prospectively. He also said the AGR judgement of the Supreme Court has added debt burden on another Rs 2 lakh crore on the telecom sector. He said “If the government removes AGR prospectively, as we pay for entire spectrum in auction, or modifies it as per TDSAT judgement, it will resolve telecom sector issues.” He noted the telcos pay up to 30 percent of their revenues to the government, by way of various levies and taxes, which is an enormous burden on the industry. He stated that “we have been requesting the government that these levies and Taxes be rationalised and the same is also one of the important goals of NDCP. However, these aspects of the NDCP are yet to be operationalised and we are engaging with the government on the same.”

Director General further said that the 2-year moratorium will not reduce debt on the telecom sector as government will charge interest on the deferred payments. He said it will help industry if government aligns interest with prime lending rate or floating method instead of fixed rate of 9.5 percent. He noted that the interest rates have been coming down. Adding further, he said the debt on telecom service providers at present is close to Rs 6 lakh crore and telecom operators will need to increase their average revenue per user by at least 20 percent for partial relief.

The CNX Nifty traded in a range of 12,028.20 and 11,956.90. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 11.73%, Eicher Motors up by 2.09%, Dr. Reddy’s Lab up by 1.43%, Adani Ports & SEZ up by 1.39% and Hindustan Unilever up by 1.01%. On the flip side, BPCL down by 5.97%, Coal India down by 3.37%, Tata Steel down by 3.25%, Yes Bank down by 3.11% and Bharti Airtel down by 2.39% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 52.73 points or 0.73% to 7,209.76, France’s CAC fell 23.99 points or 0.41% to 5,870.04 and Germany’s DAX was down by 54.00 points or 0.41% to 13,104.14.

Asian markets ended lower on Thursday as trade experts have warned the completion of a ‘phase one’ US-China trade deal could slip into next year. Adding to the tensions between the world's two biggest economies, the US House of Representatives on Wednesday passed two bills to back protesters in Hong Kong and send a warning to China about human rights, with President Donald Trump expected to sign the legislation passed by both chambers of Congress. Japanese shares closed lower on concerns of delay in US-China trade deal, but pared losses after China’s vice premier, Liu He, reportedly said he was ‘cautiously optimistic’ about getting to a preliminary phase One trade pact with the United States.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,903.64
-7.41
-0.25

Hang Seng

26,466.88
-422.73
-1.57

Jakarta Composite

6,117.36
-37.75
-0.61

KLSE Composite

1,592.19

-8.95

-0.56

Nikkei 225

23,038.58
-109.99
-0.48

Straits Times

3,192.21
-37.57
-1.16

KOSPI Composite

2,096.60
-28.72
-1.35

Taiwan Weighted

11,558.27
-72.93
-0.63
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