The market declined for second consecutive day amid weakness in financial stocks. Fears of a global recession, ongoing US-China trade tensions and uncertainty over Brexit spoiled investor sentiment.
The Nifty opened a tad above 11,000 mark, but soon gave up that level in early trade. Continuous selling pressure during mid-morning trade dragged Nifty below 10,950. The index found support near 10,920 level and it managed to close above 10,950. Trading was volatile as the August 2019 F&O contracts expired today, 29 August 2019.
The barometer index, the S&P BSE Sensex, fell 344.68 points or 0.92% to 37,107.16, as per the provisional closing data. The Nifty 50 index fell 87.15 points or 0.79% to 10,958.95 as per the provisional closing data.
The S&P BSE Small-Cap index was down 0.61%. The S&P BSE Mid-Cap index was down 0.05%.
The market breadth was weak. On the BSE, 907 shares rose and 1574 shares fell. A total of 158 shares were unchanged.
Bharti Infratel (up 3.96%), JSW Steel (up 3.06%) and NTPC (up 2.84%) advanced.
State Bank of India (down 3.76%), Yes Bank (down 3.61%), HDFC (down 2.86%) and Axis Bank (down 2.63%) declined.
Indiabulls Housing Finance (down 2.58%) will be replaced by Nestle India (up 1.6%) in NSE's Nifty 50 Index with effect from 27 September 2019.
Infibeam Avenues (down 0.75%) and Oracle Financial Services Software (down 0.6%) will replace Hexaware Technologies (up 0.12%) and Just Dial (down 0.72%) in Nifty IT index effective 27 September 2019.
On domestic front, the Union Cabinet after market hours yesterday, 28 August 2019, relaxed Foreign Direct Investment (FDI) norms in several sectors. Cabinet approved 26% FDI with government approval for digital news media and 100% FDI via automatic route for coal mining and ancillary activities. Cabinet eased local sourcing norms for FDI in single brand retail. Single-brand retailers allowed to open online stores before setting up brick-and-mortar shops. Cabinet approves 100% FDI in contract manufacturing and approved export subsidy for 60 lakh metric tonne of sugar.
Most sugar stocks rose after the cabinet approved sugar export policy for evacuation of surplus stocks during sugar season 2019-2020. Rana Sugars (up 5.24%), DCM Shriram Industries (up 2.94%), Balrampur Chini Mills (up 1.43%), EID Parry (India) (up 1.02%), KCP Sugar & Industries Corporation (up 0.47%) and Bajaj Hindusthan Sugar (up 0.21%) advanced.
The cabinet on Wednesday approved providing a lump sum export subsidy of Rs 10,448 per metric tonne (MT) to sugar mills for the sugar season 2019-20. The total estimated expenditure of about Rs 6,268 crore will be incurred for this purpose. The lump sum export subsidy will be provided for expenses on marketing costs including handling, upgrading and other processing costs, costs of international and internal transport and freight charges on export of up to 60 lakh metric tonne (LMT) of sugar limited to maximum admissible export quantity (MAEQ) allocated to sugar mills for the sugar season 2019-20.
In wake of surplus sugar production during sugar season (SS) 2017-18 and 2018-19, notwithstanding various measures taken by the Government, the ensuing sugar season 2019-20 is expected to commence with an opening stock of about 142 LMT and season end stock are expected to be about 162 LMT. The surplus stock of 162 LMT of sugar would create downward pressure throughout the season on sugar prices affecting liquidity of the sugar mills thereby leading to accumulation of cane price arrears of farmers.
Coal India rose 2.43% to Rs 189.7 after the cabinet on Wednesday approved 100% foreign direct investment (FDI) under automatic route for sale of coal, for coal mining activities including associated processing infrastructure with an aim to attract international players to create an efficient and competitive coal market.
Sun Pharmaceutical Industries surged 5.17% to Rs 434.1 after the media reported that the market regulator, Sebi, cleared the drug major of charges of irregularities emerged. According to media reports, a preliminary enquiry by the Securities and Exchange Board of India (Sebi) has found no merit in allegation of violation of securities laws, levelled by a whistleblower, against pharmaceutical major Sun Pharmaceutical Industries. The enquiry followed allegations made by a whistleblower in a 150-page complaint to Sebi accusing Sun Pharma of committing corporate governance and tax-related offences and securities market-related violations. Sebi had sought detailed answer on alleged fund diversion of Rs 42,000 crore, through the company's key distributor and subsidiary, Aditya Medisales (AML). It also sought clarification on the company's 2004 fund raising through foreign currency convertible bonds (FCCB). The investigation team is of the view that the matter does not require further probe, reports added.
CG Power and Industrial Solutions were locked in 5% upper circuit at Rs 9.95 after the company decided to remove Gautam Thapar as the chairman of the board with immediate effect. This decision has been taken in the interests of the company and its stakeholders in discharge of the fiduciary responsibilities of the board, the company said in a statement during market hours today, 29 August 2019.
Government owned oil producer, ONGC rose 2.1% after the company announced that it has set up a Euro Medium Term Note (EMTN) Programme of $ 2 billion which will be listed on Singapore Stock Exchange.
L&T Finance Holdings fell 1.64%. IIFL Wealth Group (IIFLWealth) entered into a definitive agreement to acquire 100% equity shares of L&T Capital Markets (LTCM), a wholly owned subsidiary of L&T Finance Holdings (LTFH), which provides wealth management services for individual and institutional clients. The transaction is subject to regulatory approvals.
Overseas, European markets were trading higher as soft inflation data boosted hopes that the European Central Bank will inject stimulus into the economy next month.
The German state of Saxony reported CPI (consumer price index) inflation at +1.4% year-on-year, falling further below the ECB target, while Spain's August HCPI (harmonized consumer price index) came in at +0.4%, down from +0.6% on the year in July. The ECB indicated that stimulus could be forthcoming if inflation continues to languish well below its target of almost 2%.
Meanwhile, U.K. Prime Minister Boris Johnson announced plans to suspend parliament until 14 October, less than three weeks before the Britain's scheduled exit from the European Union on 31 October. The move is seen as increasing the chances of a no-deal Brexit that economists estimate could deal a significant blow to economic growth in the U.K and Europe.
Asian stocks ended mixed on Thursday as investors continued to watch the yield curve in U.S. Treasury, which inverted further overnight.
US stocks climbed on Wednesday on gains in energy and financial shares. Meanwhile, the White House is scheduled to impose the first stage of U.S. tariffs on $300 billion worth of Chinese imported goods on Sunday, when China is set to respond with tariffs on U.S. products also.
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