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Benchmarks hover near flat line; IT stocks slide

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Last Updated : Nov 01 2019 | 12:04 PM IST

Key market barometers continued trading with minor losses in mid-morning trade. The Nifty hovered below 11,900 mark. Barring the IT index, all other sectoral indices were in the green. At 11:20 IST, the barometer index, the S&P BSE Sensex, was down 27.02 points or 0.07% at 40,102.03. The Nifty 50 index was down 3.05 points or 0.03% at 11,874.40.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index was up 0.51%. The S&P BSE Small-Cap index was up 0.58%.

The market breadth was tilted towards the buyers. On the BSE, 1230 shares rose and 856 shares fell. A total of 125 shares were unchanged. In Nifty 50 index, 23 stocks advanced and 23 stocks declined. 1 stock remained unchanged.

Macro data:

India's unemployment rate in October rose to 8.5%, the highest since August 2016, and up from 7.2% in September, according to data released by the Centre for Monitoring Indian Economy (CMIE) on Friday, reflecting the impact of a slowdown in the economy.

The headline seasonally adjusted IHS Markit India Manufacturing PMI fell to a two-year low of 50.6 in October 2019 from 51.4 in September. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.

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India's fiscal deficit reached nearly 93% of the budget estimate at Rs 6.52 lakh crore at the end of September in the current financial year, government data showed on Thursday. In absolute terms, the fiscal deficit or the gap between expenditure and revenue was Rs 6,51,554 crore as on 30 September, according to the data released by the Controller General of Accounts (CGA). The deficit stood at 95.3% of the 2018-19 budget estimate (BE) in the corresponding month a year ago. The government has pegged the fiscal deficit for the current financial year at Rs 7.03 trillion, aiming to restrict the deficit at 3.3% of the gross domestic product (GDP).

The output of the core sector fell a record 5.2% in September, with production by seven of the eight industries declining. In September 2018, it had risen 4.3%, and 0.1% in August 2019. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP) and includes industries like coal, crude oil, natural gas refinery products, fertilizers, steel, cement and electricity.

Buzzing sector:

IT stocks were trading lower. The S&P BSE IT Sector index was down 0.83% at 15264.17. Aptech (down 2.46%), Tata Consultancy Services (down 2.41%), Larsen & Toubro Infotech (down 2.13%), Datamatics Global Services (down 1.67%) and Hinduja Global Solutions (down 1.1%) were the top losers. Among the other losers were HCL Technologies (down 1.01%), Cyient (down 1%), Quick Heal Technologies (down 0.95%), Persistent Systems (down 0.94%) and NIIT (down 0.92%).

On the other hand, HCL Infosystems (up 5.78%) ,3i Infotech (up 4.06%) and Trigyn Technologies (up 3.85%) moved up.

Stocks in focus :

Bajaj Auto rose 0.21% to Rs 3253.50. The auto maker reported a 9% decline in total auto sales, selling 4.63 lakh units in October 2019 as against 5.06 lakh units October 2018. However, the total auto sales rose 15% on a month-on-month basis from 4.02 lakh units in September 2019.

Total domestic sales fell 13% to 2.78 lakh units in October 2019 as against 3.19 lakh units in October 2018. Total exports fell 1% to 1.84 lakh units in October 2019 as against 1.86 lakh units in October 2018. The announcement was made during market hours today, 1 November 2019.

In a separate announcement post trading hours yesterday, 31 October 2019, the auto maker informed about the settlement of a decade old patent dispute with TVS Motor. Both, TVS Motor and Bajaj Auto have mutually agreed to withdraw the pending proceedings and release each other from all liabilities, claims, demands and actions in respect of the pending proceedings.

Meanwhile, TVS Motor Company edged 0.24% higher to Rs 485.55.

Ahluwalia Contracts (India) rose 3.98% to Rs 315.05 after it secured new projects worth of Rs 521.71 crore.

Yes Bank fell 3.62% to Rs 67.90. A global brokerage continued to maintain its underweight rating on the stock with a target of Rs 55 per share. It believes the risk reward is unattractive.

The foreign broking house views the bank's $1.2 billion capital raise from a global investor as a positive as it would improve the common equity tier (CET) 1 ratio - a measure of bank solvency - by 260 bps. It feels this step will limit the downside, but expects a gradual turnaround to limit the upside.

Yes Bank will declare its earnings for the second quarter of FY20 today.

Shares of Bharti Airtel slipped 0.84% to Rs 371.25 after Standard & Poor's reportedly placed the company's ratings on credit watch negative following a Supreme Court order on unpaid regulatory dues. According to S&P, the company may not be able to absorb the payout.

Foreign market:

Overseas, Asian stocks were mostly higher Friday amid renewed concerns over the potential for a long-term trade deal between China and the U.S.

A private survey of factory activity in China showed manufacturing activity in the country expanded more than expected in October. The Caixin/Markit Purchasing Managers's Index (PMI) for the manufacturing sector rose from 51.4 in September to 51.7 in October.

The US stock market finished session lower on Thursday, 31 October 2019, on skepticism about a U.S.-China trade truce deal and weakening manufacturing data. Concerns around trade and the economy dampened the enthusiasm around strong earnings from Apple and Facebook.

Concerns over trade tensions resurfaced after reports that Chinese officials are doubtful that they will be able to reach a comprehensive, long-term trade deal with the U.S. The preliminary deal was meant to be signed at the APEC meeting in Chile, but the South American country announced this week that it will no longer be hosting. President Donald Trump tweeted Thursday "China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal."

The tariff war between the world's two biggest economies has disrupted supply chains and roiled financial markets for more than a year.

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First Published: Nov 01 2019 | 11:22 AM IST

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