Key equity benchmarks declined on Thursday, dragged by selling in banks stocks. Investors were cautious ahead of earnings reports from major IT services companies. A bout of volatility was observed amid weekly index options expiry on NSE.
The barometer index, the BSE Sensex, fell 297.55 points or 0.78% to 37,880.40. The Nifty 50 index fell 78.75 points or 0.70% to 11,234.55.
Sentiment was also hit after Moody's Investors Service on Thursday cut India's gross domestic product (GDP) growth forecast for 2019-20 to 5.8% from the earlier estimate of 6.2%. It attributed the deceleration to an investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation. It expects growth to pick up to 6.6% in FY21 and around 7% over the medium term.
The market breadth was weak. On the BSE, 878 shares rose and 1567 shares fell. A total of 184 shares remain unchanged.
The broader market was negative. The S&P BSE Small-Cap index fell 0.57%. The S&P BSE Mid-Cap index fell 0.87%.
The Nifty 50 index opened lower and traded in a range till morning trade. Selling pressure intensified in mid-morning session as Nifty gave up its crucial support of 200 DMA. The index hit fresh intraday low in afternoon trade. Buying in the last hour of trading session pushed the Nifty above 11,200 mark.
Overseas, most Europe shares were trading higher while most Asia stocks ended lower on Thursday. Media reports suggested that China has lowered expectations for significant progress from this week's trade talks with the United States, even as President Donald Trump on Wednesday expressed fresh optimism.
Top US and Chinese trade and economic officials will meet in Washington on Thursday and Friday to try to end a trade war that is slowing the global economy. Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to take part.
Meanwhile, in Europe the latest reports from Germany states how exports have fallen sharply for the month of August 2019. Fears engulf the market sentiments as downtrend in European manufacturing sector may push the economy towards recession.
US stocks gained on Wednesday on hopes of progress in US-China trade talks, though stocks pared gains late after Chinese officials said Beijing had lowered expectations for negotiations this week.
Most Federal Reserve policymakers supported the need for an interest rate cut in September, minutes of the central bank's last policy meeting showed, but they remained divided on the path ahead for monetary policy. The readout of the meeting, released on Wednesday, also showed that the Fed agreed it would soon need to discuss increasing the size of its balance sheet following ructions in short-term money markets.
On the equity front back home, Tata Consultancy Services (TCS) was down by 0.8% ahead of its Q2 results today, 10 October 2019.
Infosys fell 0.14% ahead of its Q2 results on Friday, 11 October 2019.
The Bank Nifty tumbled 2.68%, erasing previous session's sharp gains.
Among private sector banks, HDFC Bank (down 2.32%), ICICI Bank (down 2.95%) and Axis Bank (down 1.95%) declined.
IndusInd Bank tumbled 6.15% after the bank announced its Q2 September 2019 result today. Net profit jumped 50.33% to Rs 1383.37 crore in Q2 2019 as against Q2 2018. Total income rose 31.40% to Rs 8877.02 crore in Q2 September 2019 over Q2 September 2018.
Among PSU banks, State Bank of India (down 2.63%), Bank of Baroda (down 3.57%) and Punjab National Bank (down 3.50%) declined.
Union Bank of India fell 4.01%. Union Bank of India said that the Committee of Directors for raising of capital funds has approved preferential issue of new equity shares at issue price to be determined to the Government of India (President of India), for an amount aggregating up to Rs 11,768 crore (including premium). The announcement was made after market hours yesterday, 9 October 2019.
Bank of Maharashtra dropped 4.07%. The Reserve Bank of India (RBI) has intimated about its inability to accede to the request made by Bank of Maharashtra for setting-off Rs 7360.29 crore accumulated losses against the balance lying in Share Premium account and Revenue Reserve account of bank. The announcement was made after market hours yesterday, 9 October 2019.
Shares of two telecom firms advanced after rival Reliance Jio Infocomm started charging for voice calls made to subscribers of other telcos. Shares of Vodafone Idea rose 5.82%, while shares of Bharti Airtel rose 5.05%.
Telecom shares surged amid hopes that the price hike could possibly herald an end in India's bruising telecom price war unleashed by the entry of Reliance Jio. Forced by regulatory uncertainty, Mukesh Ambani's unlisted telecom firm Reliance Jio Infocomm on Wednesday announced that it will charge customers 6 paise per minute for voice calls made to rival phone networks, but will compensate them by giving free data of equal value.
Shares of Indiabulls Housing Finance tanked 18.85% while shares of Lakshmi Vilas Bank were locked in a lower circuit of 5% at Rs 25.65 after RBI informed that the application for voluntary amalgamation of the Indiabulls Housing Finance with Lakshmi Vilas Bank can't be allowed.
Debt ridden DHFL was locked in a lower circuit of 10% at Rs 23.45 on reports that Edelweiss Asset Management has approached the Bombay High Court to recover its dues of around Rs 70 crore from DHFL.
Century Textiles & Industries fell 4.62%. Shares of Century Textiles & Industries will turn ex-date on Friday, 11 October 2019, for the proposed de-merger. The company will hive off its cement division and merge it with UltraTech Cement. Century Textiles shareholders will get one share of UltraTech Cement for every eight held.
Torrent Pharmaceuticals rose 1.44%. The company announced that its Indrad facility in Gujarat received a warning letter from the US drug regulator. The company announced that it received a warning letter dated 8 October 2019 from the US Food & Drug Administration (USFDA) for its Indrad facility in Gujarat. This action follows the earlier intimation received from USFDA in August 2019, wherein the agency had classified its inspection as 'Official Action Indicated' (OAI). The company said it will engage with the agency to resolve this issue at the earliest. The company is also committed to maintaining the highest standards of compliances and quality manufacturing across all its facilities.
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