HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Bears continue to dominate equity markets; Sensex loses over 250 points
Oct-23-2018

Bears continued to be in a dominant position on Tuesday, as key equity indices closed the trading session lower for fourth consecutive session. After weak start, the markets remained in negative territory for whole day, amid reports that the crude oil import bill for India is expected to increase by $37 billion to $125 billion during the current financial year (2018-19, or FY19) - a 42% spike over the 2017-18 (FY18) bill of $88 billion. Domestic sentiments also got cautious with a private report stating that India is the second-most underinsured country in the world with an insurance gap of $27 billion (approximately Rs 1.98 lakh crore). Anxiety remained among the investors with another private report stating that the government doesn’t have centralised information as yet on prosecutions launched against persons identified for suspicious cash deposits. Responding to an RTI filing by FE, the I-T department, however, said 11.8 lakh of the 23.5 lakh persons identified for suspicious post-demonetisation deposits and sent notices to by it on the e-filing portal replied to the queries raised.

The street also got worried after Moody’s Investors Service in its latest report stated that the profitability of Indian banks is ‘distinctively weak’ compared to those in BRICS nations. The report explained that system wide asset quality in India is weak due to stressed public sector banks, which dominate the sector. However, market participants failed to take any sense of relief with EEPC India’s statement that the government is responding well to the rising trade tensions between the world's two largest economies, maintaining a stance that serves the cause of Indian exporters best, realising how critical exports are for the country's big macro picture. Investors also overlooked Commerce Secretary Anup Wadhwan’s statement that Indian exports will reach a record-high figure both in rupee and US dollar terms during the current financial year. Even firm tax collection data also failed to support the markets during the trading session. The net direct tax collection in India grew by 15.7% on year-on-year basis to reach Rs 4.89 lakh crore in the current fiscal till third week of October. This marks over 42% of the full-year direct tax collection target of Rs 11.5 lakh crore for the fiscal ending March 31, 2019.

On the global front, European markets were trading in red, as producer prices in Germany increased by 0.5% in September, over previous month. The street forecast prices to rise at a steady pace of 0.3%. Compared to the same month last year, producer prices were up 0.7%. Asian markets ended in red, following the lackluster cues overnight from Wall Street amid rising geopolitical tensions around the world and on worries about Italy's budgetary woes as well as Brexit. Investors were also cautious as they focus on several major upcoming corporate earnings results due this week.

Back home, on the sectoral front, stocks related to paints sector lost sheen after Asian Paints and Kansai Nerolac Paints reported weak set of numbers for the quarter ended September 2018 (Q2FY19). Sugar sector stocks remained in sweet spot with report that a second bailout package for sugar industry could be in the offing as the food ministry plans to float a Cabinet note seeking loan incentives for ethanol producers. This will be in addition to the sugar package announced in June. Further, stocks related to the agri companies remained in limelight, amid reports that the agriculture ministry is planning a massive increase in the number of seed-testing laboratories in the country as part of its push to boost crop yield.

Finally, the BSE Sensex slipped 287.15 points or 0.84% to 33,847.23, while the CNX Nifty was down by 98.45 points or 0.96% to 10,146.80.

The BSE Sensex touched a high and a low of 34,073.92 and 33,742.75, respectively and there were 13 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index slipped 0.89%, while Small cap index was down by 1.21%.

The only gaining sectoral indices on the BSE were Realty up by 0.41% and Power up by 0.10%, while IT down by 2.79%, TECK down by 2.48%, Healthcare down by 2.34%, Basic Materials down by 1.74% and Consumer Disc down by 1.23% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.62%, Tata Motors - DVR up by 1.99%, HDFC up by 1.79%, Yes Bank up by 1.26% and Bajaj Auto up by 1.16%. On the flip side, Asian Paints down by 5.21%, Sun Pharma down by 5.07%, Wipro down by 3.93%, TCS down by 3.05% and Infosys down by 3.01% were the top losers.

Meanwhile, union minister for road transport, highways and shipping Nitin Gadkari has asked domestic investors to pump their money into the various programmes undertaken by his ministry and promised them every support to improve waterway connectivity. He also said that the country's economic viability has improved and this is the right time for investors to enter the structural construction projects.

The minister said ‘we have come up with many innovative models. The Sagarmala project has opened huge investment opportunities to the private sector. We also have plans for RoRo services, hovercraft, catamarans, seaplanes among others where we want domestic companies to come forward and invest.’ Talking about the ambitious Sagarmala project, he said that it has a potential of nearly Rs 16 trillion of which around Rs 4.53 trillion is expected to come into port mechanisation and port modernisation.

Gadkari further said that his ministry is undertaking works worth Rs 2.35 trillion under the Sagarmala project in Maharashtra. He also informed that projects worth over Rs 1.50 trilllion are in various stages of implementation, while the work on remaining Rs 850 billion-worth projects is yet to begin. He said that work on these remaining projects, starting with preparation of detailed project reports, will be initiated soon. He added that government is planning to have water-way connectivity to the airports in the megapolis on the similar lines of the system in Venice in Italy.

The CNX Nifty traded in a range of 10,222.10 and 10,102.35. There were 22 stocks in green as against 28 stocks in red on the index.

The top gainers on Nifty were HPCL up by 4.30%, Indiabulls Housing Finance up by 3.62%, HDFC up by 2.04%, Indusind Bank up by 1.88% and YES Bank up by 1.70%. On the flip side, Sun Pharma down by 4.95%, Asian Paints down by 4.83%, Wipro down by 4.30%, Ultratech Cement down by 3.41% and  Grasim Industries down by 3.23% were the top losers.

European markets were trading in red; UK’s FTSE 100 dropped 63.14 points or 0.9% to 6,979.66, France’s CAC dipped 80.34 points or 1.62% to 4,972.97 and Germany’s DAX was down by 245.83 points or 2.18% to 11,278.51.

Asian markets ended lower on Tuesday as geopolitical tensions and uncertainty about near term outlook for the global economy forced investors to indulge in heavy selling in stocks from across various sectors. Further, worries about Italy's budgetary woes and Brexit too weighed on the markets even as investors geared up to upcoming corporate earnings results. Japanese shares ended lower, marking more than half a trillion dollars lost in market value this year, on growing investors’ concerns over upcoming corporate earnings and a slowdown in China’s economy.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,594.83

-60.05

-2.31

Hang Seng

25,346.55

-806.60

-3.18

Jakarta Composite

5,797.89

-42.55

-0.73

KLSE Composite

1697.60

-24.87

-1.44

Nikkei 225

22,010.78

-604.04

-2.74

Straits Times

3,031.39

-46.67

-1.54

KOSPI Composite

2,106.10

-55.61

-2.64

Taiwan Weighted

9,775.20

-199.08

-2.04
  RELATED NEWS >>
Most Viewed >>
April 22 , 2024
Invest lumpsum through systematic transfer pla
April 22 , 2024
FPIs mount bearish bets as risk aversion grows
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
April 23 , 2024
Sensex climbs 560 points, Nifty closes above 2
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.