News Analysis

Bears grip Dalal Street on Thursday

Updated on 10 October 2019 05:01 PM

Bears gripped Dalal Street on Thursday, with Sensex and Nifty ending the trading session lower by around 300 and 80 points, respectively. Markets made a negative start of the day, as International Monetary Fund (IMF) chief Kristalina Georgieva said that the largest emerging market economies like India are facing an even more pronounced effect of the global downturn. The street remained pessimistic with a private report that a workforce analysis of listed companies reveals that the job loss in public sector was one of the worst in the recent times. In contrast to an increase of 9.2 per cent headcount in private sector, the public sector saw a decline of 2.6 per cent in FY19.

Key indices extended their losses in the second half of the session, after International rating agency Moody's Investors Service in its latest report cut India's gross domestic product (GDP) growth forecast to 5.8 per cent for the current fiscal year (FY20) from 6.8 per cent in FY19, but it expects GDP to pick up to 6.6 per cent in FY21 and around 7 per cent over the medium term. Adding more worries among market participants, the World Bank said that Asia Pacific economies are expected to slow this year due to uncertainty around U.S.-China trade tensions and slowdowns in major global economies could further hurt the region's exports.

On the global front, European markets were trading in green, after Estonia's trade deficit decreased in August as exports and imports declined. The figures from Statistics Estonia showed that the trade deficit fell to EUR 99 million in August from EUR 162 million in the same month previous year. In July, the deficit was EUR 201 million. Asian markets ended mostly in green, despite core machine orders in Japan fell a seasonally adjusted 2.4 percent on month in August, standing at 875.3 billion yen. That missed expectations for a flat reading following the 6.6 percent decline in July.

Back home, the healthcare industry stocks ended higher, amid a private report stating that the healthcare industry in India has been one of the country's largest economic sectors with regard to both employment and revenue. India is expected to rank amongst the top three healthcare markets in terms of incremental growth by 2020. Further, stocks related to the logistics industry remained in focus, after ratings agency ICRA said the domestic logistics industry is likely to grow at 8-10% over the medium term with the outlook remaining largely stable.

Finally, the BSE Sensex lost 297.55 points or 0.78% to 37,880.40, while the CNX Nifty was down by 78.75 points or 0.70% to 11,234.55.

The BSE Sensex touched a high and a low of 38,130.23 and 37,802.93, respectively and there were 08 stocks advancing against 23 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.87%, while Small cap index was down by 0.57%.

The top gaining sectoral indices on the BSE were Telecom up by 3.76%, Energy up by 1.69%, TECK up by 0.24%, Oil & Gas up by 0.08% and Consumer Durables up by 0.02%, while Bankex down by 2.61%, Realty down by 2.16%, Metal down by 1.54%, Auto down by 1.21% and PSU down by 1.16% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 5.05%, Reliance Industries up by 2.76%, Hindustan Unilever up by 1.65%, HCL Tech. up by 1.20% and Power Grid up by 0.94%. On the flip side, Indusind Bank down by 6.15%, Yes Bank down by 5.21%, Tata Motors down by 3.27%, Vedanta down by 3.02% and ICICI Bank down by 2.95% were the top losers.

Meanwhile, with an aim to encourage young entrepreneurs, Agriculture Minister Narendra Singh Tomar is likely to launch the Yuva Sahakar-Cooperative Enterprise Support and Innovation Scheme 2019 with an annual outlay of Rs 100 crore. This is in line with schemes like Start-up India and Stand-up India aimed at young entrepreneurs.

The scheme is aimed at cooperatives in the northeastern region, cooperatives registered and operating in aspirational districts as identified by NITI Aayog, and cooperatives with 100% women/SC/ST/persons with disability members. The scheme will be launched at the first-ever India International Cooperatives Trade Fair (IICTF) to be held here from October 11-13.

As 94% of total farmers in India are members of at least one cooperative institution, the IICTF is aimed at furthering the government's goal of doubling farmers' income by promoting cooperative-to-cooperative trade within India & abroad and promoting exports of key agriculture commodities and products.

The CNX Nifty traded in a range of 11,293.35 and 11,208.55. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.35%, Grasim Industries up by 3.67%, Reliance Industries up by 2.67%, Hindustan Unilever up by 1.64% and HCL Tech. up by 1.23%. On the flip side, Indusind Bank down by 6.04%, Yes Bank down by 5.43%, GAIL India down by 3.63%, Tata Motors down by 3.39% and Vedanta down by 3.23% were the top losers.

European markets were trading in green; France’s CAC increased 15.03 points or 0.27% to 5,514.17, Germany’s DAX rose 10.63 points or 0.09% to 12,104.89 and UK’s FTSE 100 was up by 14.43 points or 0.2% to 7,152.07.

Asian markets ended mostly higher on Thursday. Chinese shares ended higher as a dim services sector survey reinforced hopes that Beijing will roll out more stimulus measures to prop up growth. Japanese shares ended higher after reports emerged that the United States will soon issue licenses allowing some US companies to supply non-sensitive goods to China’s Huawei Technologies Company in a bid to resolve the trade war. Investors shrugged off official data showing that core machine orders in Japan fell a seasonally adjusted 2.4 percent on month in August. That missed expectations for a flat reading following the 6.6 percent decline in July. Meanwhile, Taiwan's market is closed for a holiday today.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,947.71
22.85
0.78

Hang Seng

25,707.93
25.12
0.10

Jakarta Composite

6,023.64
-5.52
-0.09

KLSE Composite

1,551.870.640.04

Nikkei 225

21,551.98
95.60
0.45

Straits Times

3,089.48
-0.42
-0.01

KOSPI Composite

2,028.15
-18.10
-0.88

Taiwan Weighted

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-
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