Key equity barometers ended almost flat after a volatile session on Monday. Weak economic data and subdued auto sales numbers impacted sentiment. Investors were cautious ahead of the central bank's monetary policy meeting on Thursday, 5 December 2019.
The barometer index, the BSE Sensex, rose 8.36 points or 0.02% to 40,802.17. The Nifty 50 index fell 7.85 points or 0.07% to 12,048.20. The Nifty failed to close above 12,050.
Weakness in pharma and IT shares put pressure on bourses. Strength in telecom shares supported the indices.
In the broader market, the S&P BSE Mid-Cap index fell 0.77% while the S&P BSE Small-Cap index fell 0.39%. Both these indices underperformed the Sensex.
The market breadth was tilted in favor of sellers. On the BSE, 1051 shares rose and 1501 shares fell. A total of 190 shares were unchanged.
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.
India's (GDP) grew by 4.5% in Q2 September 2019, the lowest since Q4 March 2013. Gross value added (GVA), which is GDP minus taxes, grew 4.3% in Q2 September 2019, compared to 4.9% in Q1 June 2019 and 6.9% in Q2 September 2018. 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.
IHS Markit announced Purchasing Managers' Index (PMI) numbers for India. PMI is an economic indicator derived from monthly surveys of private sector companies. The headline seasonally adjusted IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in October, when it had fallen to a two-year low. The latest reading was below the survey average (53.8) and indicated only a slight improvement in the health of the sector. 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.
The Reserve Bank of India's (RBI) monetary policy committee (MPC) will meet between 3rd and 5th December 2019 to review the interest rates.
Regulatory Action:
NSE on Monday suspended Karvy Stock Broking's license due to non compliance of regulatory provisions of the exchange. This included its trading in capital market, futures & options, currency trading, debt and commodity derivatives segments. Investors with accounts with brokerage will be able to migrate to other brokers.
Rupee and Crude
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 71.665, compared with its close of 71.74 during the previous trading session.
In the commodities market, Brent crude for February 2020 settlement rose $1.35 at $61.84 a barrel.
Foreign Markets:
Shares in Europe and Asia edged higher on Monday as official data over the weekend showed Chinese factory activity rising unexpectedly in November. Also investors clung to hopes Beijing and Washington could reach a compromise in trade talks.
The Purchasing Managers' Index (PMI) bounced back to 50.2 in November, its highest since March, China's National Bureau of Statistics (NBS) said on Saturday. The result compared with 49.3 in October.
In US, stocks closed lower on Friday as investors worried about the deterioration in US-China trade relations after a bill supporting Hong Kong protesters was signed by President Trump late on Wednesday.
President Donald Trump is expected to arrive in the U.K. on Monday morning ahead of a NATO summit. His trip to London comes at a hyper-sensitive time in U.K. politics, with just 10 days to go before Britons head to the ballot box.
Buzzing Index:
The Nifty Pharma index fell 0.74% to 8,128.95. The index has fallen 1.75% in two sessions.
Sun Pharmaceutical Industries (down 2.17%), Dr Reddy's Laboratories (down 1.51%), Lupin (down 0.89%), Cipla (down 0.46%), Aurobindo Pharma (down 0.29%), GlaxoSmithKline Pharmaceuticals (down 0.21%) and Divi's Laboratories (down 0.03%) declined.
The Nifty IT index fell 0.97% to 14,852. The index has fallen 1.78% in two sessions.
Tech Mahindra (down 1.77%), TCS (down 1.55%), MphasiS (down 0.84%), Infosys (down 0.44%), Hexaware Technologies (down 0.43%), Persistent System (down 0.37%) and HCL Technologies (down 0.13%) declined. Wipro rose 0.34%.
Shares of three telecom companies surged after announcing plans to raise telecom tariffs.
Vodafone Idea (up 14.06%), Bharti Airtel (up 3.67%) and Reliance Industries (up 2.28%) gained.
Grasim Industries advanced 2.65% to Rs 807.80. Grasim Industries has exposure to the telecom sector via its 11.55% stake in Vodafone Idea.
Bharti Airtel said its revised tariff plans for its mobile customers will be applicable from 3 December 2019. New plans, represent tariff increases in the range of a mere 50 paise/day to Rs. 2.85/day and offer generous data and calling benefits, Bharti Airtel said.
Meanwhile, Bharti Airtel said the meeting of the board of directors of the company is scheduled to be held on 4 December 2019 to consider and evaluate any and all proposals for raising of funds either by issuance of equity shares, and or bonds including foreign currency convertible bonds / debentures / non-convertible debt instruments along with warrants / convertible debentures / securities and / or any other equity based instruments / securities including through qualified institutions placement or rights issue, or through any other permissible mode or any combination thereof of any of the above.
Vodafone Idea announced new tariffs/plans for its prepaid products and services. New plans will be available across India starting 3 December 2019.
Reliance Industries (RIL) said Jio will be introducing New All-in-One plans with unlimited voice and data. These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from 6 December 2019.
Stocks in Spotlight:
RBL Bank fell 0.15% to Rs 373.25. The lender's board has approved the lender's plan to raise about Rs 825 crore via preferential issue of shares, according to an exchange notification.
Jagran Prakashan surged 7.25% to Rs 59.15. The company's board will consider a proposal for buy-back of the fully paid-up equity shares of the company on Monday, 9 December 2019.
Maruti Suzuki India fell 1.55% to Rs 7137.45. The company's total sales fell 1.9% to 1.50 lakh units in November 2019 from 1.53 lakh units in November 2018.
Mahindra & Mahindra rose 0.79% to Rs 534.25. M&M said its overall automotive sales (domestic + exports) stood at 41,235 vehicles in November 2019, compared to 45,101 vehicles during November 2018, down by 9% on a year-on-year basis.
M&M's Farm Equipment Sector sold 21,032 units during November 2019, down by 19% from 25,949 units in November 2018.
Bajaj Auto fell 0.50% to Rs 3160.20 after total vehicles sales declined 1% to 4.03 lakh units in November 2019 as against 4.06 lakh units in November 2018.
Hero MotoCorp slipped 1.08% to Rs 2405.80. The company's total sales tumbled 15.32% to 516,775 units in November 2019 as against 610,252 units in corresponding period last year.
Tata Motors fell 0.28% to Rs 161. The auto major's total vehicle sales slumped 25.32% to 41,124 units in November 2019 from 55,074 units in November 2018.
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