HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Markets fail to hold gains; settle a percent lower
May-21-2019

Indian equity benchmarks failed to hold gains on Tuesday, with Sensex and Nifty closing lower by losses of around a percent each. After a positive start, key indices remained in green terrain during first half of the session, aided by the retirement fund body, Employment Provident Fund Organisation’s (EPFO) latest ‘Provisional Estimate of Net Payroll’ data report which showed that India created 8.15 lakh new jobs in the month of March 2019. According to the data report, 9962 new jobs were created in less than 18 age group category, while 214699 jobs in 18-21 age group category. Adding comfort among market participants, IHS Markit’s report stated that India’s economic policy will continue to focus on maintaining strong economic growth and creating jobs for the country’s large and growing population. It added that the government will also focus on the expansion of already announced policies including infrastructure investment, the Goods and Services Tax (GST) rationalisation and financial sector regulations.

But, markets turned negative in second half of the trading session and ended on a pessimistic note, with Trade Promotion Council of India’s (TPCI) statement that the proposed Regional Comprehensive Economic Partnership (RCEP) agreement may hurt India's export competitiveness as the trade balance is already skewed. Traders also got worried with India Ratings and Research’s (Ind-Ra) latest report stating that a continued slowdown in loan disbursements by housing finance company, owing to tight liquidity condition, could have a spillover impact on retail home loan borrowers and property developers. Some concerns also came with a report that rising trade tensions have prompted the World Trade Organization (WTO) to dim its prospect for trade growth in the second quarter of the 2019 calendar year. The WTO said world trade growth is likely to remain weak into the second quarter of 2019.

On the global front, European markets were trading in green, as Denmark's consumer confidence grew to the highest level in eight months in May. The survey data from Statistics Denmark showed that the consumer confidence index rose to 5.9 in May from 3.7 in April. The latest score was the highest since September last year, when the confidence index was 6.9. Asian markets ended mixed, after the US government decided to temporarily ease some trade restrictions on Huawei. Meanwhile, Hong Kong's unemployment rate remained stable during the February to April period. The data from the Census and Statistics Department showed that the jobless rate remained steady at 2.8% during the February to April period, same as in the previous three-month period.

Back home, metals sector stocks ended lower, after India Ratings and Research (Ind-Ra) said that steel production in the country will be significantly affected if the auction of mines completing 50 years of operations by March 2020 is materially delayed. Consequently, the credit profile of merchant miners and thus non-integrated steel players could come under stress. Further, stocks related to the telecom industry also fell, impacted by TRAI’s latest report showing that the number of telephone subscribers in India declined from 1,205.40 million at the end of February 2019 to 1,183.51 million at the end of March 2019, thereby showing a monthly decline rate of 1.82%. The overall Tele-density in India declined from 91.86% at the end of February 2019 to 90.11% at the end of March 2019.

Finally, the BSE Sensex lost 382.87 points or 0.97% to 38,969.80, while the CNX Nifty was down by 119.15 points or 1.01% to 11,709.10.

The BSE Sensex touched a high and a low of 39,571.73 and 38,884.85, respectively and there were 03 stocks advancing against 28 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.84%, while Small cap index was down by 0.61%.

The only gaining sectoral indices on the BSE were Consumer Durables up by 0.65% and Energy up by 0.19%, while Auto down by 2.60%, PSU down by 1.92%, Telecom down by 1.61%, Metal down by 1.55% and TECK down by 1.50% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.08%, Bajaj Finance up by 0.76% and Hindustan Unilever up by 0.62%. On the flip side, Tata Motors down by 7.05%, Tata Motors - DVR down by 6.42%, Maruti Suzuki down by 3.25%, Indusind Bank down by 3.02% and Bharti Airtel down by 2.66% were the top losers.

Meanwhile, Former Reserve Bank of India (RBI) Governor Bimal Jalan has said that the Prime Minister Narendra Modi-led government has taken a number of reforms but further needs to be done by the next government on the implementation front to ensure employment generation. He also said that the government should take up administrative reforms that are complicated but essential for the implementation of government policies.

Talking about what economic reforms need to be taken by the next government, Jalan said the next government should implement policies that are already announced. Moreover, he said ‘equally important is the administrative reforms, at the moment, the administrative structure is highly complicated, and for anything you want to do, you probably require 15-16 approval by the central government.’

Therefore, former RBI Governor has stated that the role of the central government in the policy making is important but in the implementation, the state governments should be given more power.

The CNX Nifty traded in a range of 11,883.55 and 11,682.80. There were 07 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 2.92%, Bharti Infratel up by 2.10%, Titan up by 1.34%, Britannia up by 1.26% and Reliance Industries up by 1.06%. On the flip side, Tata Motors down by 6.60%, Zee Entertainment down by 4.33%, BPCL down by 4.20%, Adani Ports & SEZ down by 3.39% and Indusind Bank down by 3.38% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 45.39 points or 0.62% to 7,356.27, France’s CAC rose 23.56 points or 0.44% to 5,382.15 and Germany’s DAX added 108.19 points or 0.9% to 12,149.48.

Asian markets ended mixed on Tuesday after Washington temporarily eased trade restrictions imposed last week on China’s Huawei, although fears of a further escalation in tensions kept investors on edge. Chinese shares ended higher as the easing of US trade restrictions on Chinese telecoms firm Huawei brought relief to investors, lifting sentiment battered by a bruising trade war between the world’s two largest economies. Though, Japanese shares closed lower, tracking global economic concerns as investors fret over the latest flare-up in the China-US trade war involving Chinese tech giant Huawei and concerns about the future course of the global economy.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,905.97
35.37
35.37

Hang Seng

27,657.24
-130.37
-0.47

Jakarta Composite

5,951.37
44.25
0.75

KLSE Composite

1,603.74

-1.62

-0.10

Nikkei 225

21,272.45
-29.28
-0.14

Straits Times

3,183.26

-22.20

-0.69

KOSPI Composite

2,061.25
5.54

0.27

Taiwan Weighted

10,464.50
66.09
0.64
  RELATED NEWS >>
Most Viewed >>
April 22 , 2024
Invest lumpsum through systematic transfer pla
April 24 , 2024
Fund managers trim PSB exposure, see better va
April 22 , 2024
FPIs mount bearish bets as risk aversion grows
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.