HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Last hour sell-off drags markets lower; Sensex settles below 34,200 mark
Oct-22-2018

Last hour selling dragged the markets down on Monday, with Sensex and Nifty giving up their crucial psychological levels of 34,200 and 10,250, respectively. The key indices made a positive start of the week, aided by a private report stating that India is likely to emerge as the third-largest economy in the world in just over a decade from now, surpassing Japan and Germany.  Traders got relief after the Finance Ministry extended the deadline for filing the GSTR-3B summary return of sales for September by five days to October 25. With this extension, businesses, which wish to claim input tax credit (ITC) benefit for July 2017-March 2018 period, can do so till October 25. Adding some optimism, ASSOCHAM said that the Reserve Bank of India’s decision to incentivise banks will help NBFCs in tackling liquidity crunch. The RBI allowed the banks to use government securities equivalent to their incremental credit to NBFCs for a three-month period to meet their liquidity coverage ratio requirements.

However, in the last hour of the trade, the markets erased all of their gains to end the session lower, despite firm cues from global markets. The market participants got cautious as traders' body CAIT warned that allowing central as well as state tax administrations to initiate action against any taxpayer irrespective of jurisdiction would lead to harassment of traders and complicate the tax system. Anxiety spread on the street after job creation slowed down by 8.39 percent to stand at 8,94,769 in August month as against the revised figure of 9,76,675 in July month. The trade also got hit with the Reserve Bank of India’s (RBI) report showing that India’s forex reserves declined by $5.14 billion during the week ended October 12, when the rupee slipped to 74 and beyond against the US dollar. Meanwhile, the Central Board of Direct Taxes (CBDT) said that the number of taxpayers earning above Rs 1 crore per annum has risen to over 1.40 lakh in the country in the last four years, depicting a growth of about 60 percent.

On the global front, European markets were trading in green, as Euro area current account surplus increased in August from the previous month. As per preliminary data from the European Central Bank, the current account surplus rose to EUR 24 billion from EUR 19 billion in July. Meanwhile, the UK budget deficit reached its lowest September level in 11 years. The data from the Office for National Statistics showed that public sector net borrowing excluding public sector banks was GBP 4.1 billion, which was GBP 0.8 billion less than in September 2017. Asian markets ended in green, following soothing comments from top officials about the health of the economy.

Back home, on the sectoral front, airlines stocks ended mostly lower, despite a private report stating that domestic airlines will operate 22 percent more flights during the winter schedule 2018 with 23,117 departures a week as compared with the winter schedule of 2017. Sugar stocks remained in limelight, amid reports that state governments' announcement of cash subsidy is likely to improve the liquidity of mills, helping them in making cane payments to farmers, while stocks related to oil and gas space too remained in focus on report that petrol and diesel prices were cut in the range of 27-30 paise across metro cities on October 22, 2018, for the fifth consecutive day in a row. In the national capital, petrol is priced at Rs 81.44 per litre, 30 paise down from price of Rs 81.74 on October 21.

Finally, the BSE Sensex plunged 181.25 points or 0.53% to 34,134.38, while the CNX Nifty was down by 58.30 points or 0.57% to 10,245.25.

The BSE Sensex touched a high and a low of 34,748.69 and 34,082.76, respectively and there were 10 stocks advancing against 21 stocks declining on the index.
The broader indices ended in red; the BSE Mid cap index slipped 0.71%, while Small cap index was down by 1.97%.

The sole gaining sectoral indices on the BSE was Power up by 0.06%, while Energy down by 2.98%, Oil & Gas down by 2.45%, Basic Materials down by 1.48%, Consumer Durables down by 1.27% and Industrials down by 1.17% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.84%, NTPC up by 1.95%, Bajaj Auto up by 1.86%, HDFC Bank up by 1.38% and Bharti Airtel up by 1.34%. On the flip side, Indusind Bank down by 8.52%, Reliance Industries down by 3.56%, Tata Motors - DVR down by 3.18%, Yes Bank down by 3.08% and ONGC down by 3.07% were the top losers.

Meanwhile, expressing cautiousness over recent depreciation of Indian currency and non-performing assets (NPAs) issue, former Reserve Bank of India (RBI) Governor Bimal Jalan has said that declining value of rupee and high NPAs continue to remain a cause for concern. Though, he also said government has launched several reforms, including the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) and direct benefit transfer scheme, are good for the economy; and there is no doubt that the growth rates are one of the highest in emerging markets; inflation is low.

On the non-economic front, Jalan said the country is still suffering from mis-governance, civil protests in several states over different issues and non-secular announcements. He further said the government should adopt a cautious approach with regard to minimum support price as it also affects the price of food grains for consumption for poor people in rural and semi urban areas.

Regarding sustained fall in the value of rupee, former RBI Governor said ‘I would not say it (depreciation of rupee) is cause for worry per se, in the sense that we have enough resources but the movement in rupee's value in the last couple of months has been a matter of concern.’ However, he highlighted that the government has taken some measures to contain the fall of the rupee. Pointing out that NPAs is a problem, he expressed hope that bad loans issue is going to be resolved as the government has introduced IBC and also the RBI has announced some prompt corrective actions (PCA).

The CNX Nifty traded in a range of 10,408.55 and 10,224.00. There were 16 stocks in green as against 33 stocks in red, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 8.93%, ICICI Bank up by 4.04%, Eicher Motors up by 4.03%, NTPC up by 2.20% and Bajaj-Auto up by 1.74%. On the flip side, Indusind Bank down by 6.96%, BPCL down by 4.51%, Ultratech Cement down by 3.95%, Reliance Industries down by 3.46% and Asian Paints down by 3.12% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 31.96 points or 0.45% to 7,081.76, France’s CAC rose 10.48 points or 0.21% to 5,095.14 and Germany’s DAX was up by 48.24 points or 0.42% to 11,602.07.

Asian markets ended mostly higher on Monday as China surges on hopes for more stimulus, while caution prevailed elsewhere across Asia on geopolitical concerns over Saudi Arabia, Italy and Brexit. Japanese shares ended with modest gains on expectations that China will step up economic stimulus in the months ahead. Chinese stocks extended Friday’s rally as authorities took steps to support the market after the release of weaker-than-expected GDP data.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,654.88

104.41

3.93

Hang Seng

26,153.15

591.75

2.26

Jakarta Composite

5,840.44

3.15

0.05

KLSE Composite

1,722.47

-9.67

-0.56

Nikkei 225

22,614.82

82.74

0.37

Straits Times

3,078.06

15.55

0.51

KOSPI Composite

2,161.71

5.45

0.25

Taiwan Weighted

9,974.28

55.02

0.55
  RELATED NEWS >>
Most Viewed >>
April 22 , 2024
Nifty 500: Get diversification with better ret
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
April 22 , 2024
Invest lumpsum through systematic transfer pla
April 22 , 2024
Investment bankers to receive hefty bonuses as
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.