Key equity benchmarks fell on Tuesday in line with other global stock markets as investors panicked after the US decision to impose tariffs on Argentina and Brazil. Concern about India's slowing economic growth and unabated foreign fund outflows also weighed heavily on the market sentiment. Investors were also cautious ahead of the central bank's monetary policy outcome on Thursday, 5 December 2019.
The barometer index, the BSE Sensex, fell 126.72 points or 0.31% to 40,675.45, as per the provisional closing data. The Nifty 50 index fell 47.15 points or 0.39% to 12,001.05, as per the provisional closing data.
In the broader market, the S&P BSE Mid-Cap index fell 0.95% while the S&P BSE Small-Cap index fell 0.74%. Both these indices underperformed the Sensex.
The market breadth favored the sellers. On the BSE, 862 shares rose and 1609 shares fell. A total of 203 shares were unchanged. In Nifty 50 index, 11 stocks advanced while 39 stocks declined.
Economy:
Rating agency CRISIL on Monday sharply cut its growth forecast for the current financial year to 5.1% from an earlier estimate of 6.3%. Key short-term indicators like industrial production, merchandise exports, bank credit offtake, tax mop-ups, freight movement, and electricity production, all point to a weakening growth momentum, Crisil said in a research report.
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India's (GDP) grew by 4.5% in Q2 September 2019, the lowest since Q4 March 2013. The farm sector grew 2.1% while the manufacturing sector de-grew by 1% in July-September 2019.
The Eight Core Industries, carrying 40.27% weight in the Index of Industrial Production (IIP), recorded 5.8% decline in the output for October 2019 over October 2018. Its cumulative output rose mere 0.2% in April-October 2019-20.
Politics:
Maharashtra Chief Minister Uddhav Thackeray reportedly ordered a review of all projects/proposals cleared by Devendra Fadnavis's government in the last six months. Further, Thackeray's specific instruction to the bureaucrats is to not release any payment for the projects till the time the Maha Vikas Aghadi government clears them. Payments for only those projects that are 100% complete will be released.
Immediately after taking charge as chief minister, Thackeray announced that the metro car shed at Aarey Colony has been put on hold pending review.
Apart from the Bullet Train project, the other major projects under the scanner are the Mumbai-Nagpur Samruddhi Corridor, estimated to cost Rs 46,000 crore, the Coastal Road linking south Mumbai to the Western suburbs, likely to cost Rs 12,000 crore, the Rs 7,000-crore Versova-Bandra Sea Link, and the construction of the third bridge on the Thane Creek, which is expected to cost Rs 800 crore. There's also the on-going tunnelling for a six-km missing link of the Mumbai-Pune Expressway which is being reviewed, media reports added.
Buzzing Index:
The Nifty Metal index witnessed heavy selling pressure after US president Donald Trump decided to re impose tariffs on imports of steel and aluminium from Brazil and Argentina after accusing the countries of a 'massive devaluation' of their currencies that hurt US farmers. The move, which was announced by Trump on Twitter on Monday, sharply escalates trade tensions with the two struggling Latin American economies as they build closer ties with China.
The Nifty Metal index was down 2.47% at 2,567.70. Jindal Steel & Power (down 6.4%), Tata Steel (down 5.2%), Steel Authority of India (down 3.55%), Vedanta (down 3.49%), Hindalco Industries (down 2.52%), Hindustan Copper (down 1.86%) and National Aluminium Company (down 0.35%) were top losers in metal segment.
Stocks in Spotlight:
Biocon and Mylan N.V. announced the U S launch of Ogivri TM (trastuzumab-dkst), a biosimilar to Herceptin (trastuzumab). It will offer Ogivri in both the 420mg and 150mg strengths, increasing access to treatment for thousands of HER2-positive breast and gastric cancer patients. Ogivri was the first biosimilar trastuzumab approved by the U.S. Food and Drug Administration (FDA) and unanimously recommended by the FDA Oncologic Drugs Advisory Committee (ODAC).
Shares of Biocon were trading 0.02% higher at Rs 286.
Cadila Healthcare was trading 0.23% higher at Rs 258.75. The company said it received the tentative approval from the USFDA to market Lorcaserin Hydrochloride tablets, used in treating obesity.
Maruti Suzuki India was up 0.1% higher at Rs 7144.35. The automobile manufacturer announced a price hike across various models effective from January 2020
United Spirits was down 1.35%. United Spirits said it has considered and approved a scheme of amalgamation and arrangement in relation to the proposed merger of the company's listed subsidiary Pioneer Distilleries with the company. POL is engaged in the business of manufacture and sale of extra neutral alcohol, malt spirits, Indian Made Foreign Liquor (IMFL) and other allied products, including bottling operations.
NMDC announced production and sales numbers for November 2019. The company's total iron ore production in November 2019 was 2.94 million tonnes as compared to 3.29 million tonnes in November 2018, recording a decline of 10.64%. The iron ore sales remained flat in November 2019 at 2.79 million tonnes. Shares of NMDC rose 2.56% to Rs 108.20.
Tata Motors announced that the company has bagged an order to supply 2300 buses for public transportation to State Transport Undertakings. The orders have been received from Rajasthan (RSRTC), Karnataka (KSRTC/ BMTC/ NWKRTC), Uttar Pradesh (UPSRTC), Tamil Nadu (IRT), and Andhra Pradesh (APSRTC). The company aims to deliver all orders by February 2020. Shares of Tata Motors were trading 1.83% lower at Rs 158.05.
RBL Bank was down 2.24%. RBL Bank said it has launched the qualified institutional placement issue for subscription on December 2. The Capital Raising Committee of the bank approved the floor price for the QIP being Rs 352.57 per equity share, at a 5.5% discount to Monday's closing price.
Karvy Fiasco:
The Securities Appellate Tribunal (SAT) on Tuesday asked Karvy Stock Broking (Karvy) to approach National Stock Exchange of India's (NSE) disciplinary committee on revoking the trading suspension. NSE's disciplinary committee after hearing Karvy's representation will pass final order on whether the trading suspension stays or is revoked by 6 December 2019.
NSE had suspended Karvy's trading license across all segments of equity, cash, commodities and currency. The suspension order by NSE was followed by BSE and Multi commodity Exchange (MCX). Domestic exchanges suspended Karvy's trading licence after discovering that the firm violated exchange rules as well as those of the market regulator. Karvy was indulging in merging its own securities with client securities and used client securities for funding purposes, the exchanges found in their disciplinary proceedings.
Foreign Markets:
Most shares in Europe and Asia declined on Tuesday after an escalation of global trade tensions during the previous session.
Meanwhile, investors are monitoring several high-level meetings as NATO leaders gather in the U.K. to celebrate the 70th anniversary of the organization.
In US, stock indexes fell on Monday, after US manufacturing data showed a continued contraction in November and fresh trade jitters put investors on the defensive.
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