Sensex ends lower, banks drag; Nifty holds 11,9003 min read . Updated: 31 May 2019, 03:51 PM IST
- Metal, banking and auto stocks led the decline
- Sensex had crossed 40,000 level in early trade
Indian markets ended lower today in volatile trade, dragged down by declines in banking, auto, FMCG and metal stocks. The Sensex ended 117 points lower at 39,714, after earlier rising to 40,122 intraday. The broader Nifty settled at 11,922, down 0.19%.
Prime Minister Narendra Modi today named Nirmala Sitharaman, previously the country's defence minister, as the next finance minister.
Speaking about the market's expectations from the new finance minister, Ogesh Magaonkar, founder and CEO of Rowan Capital Advisors, said: "The initial expectation of the market from her would be to see how she addresses liquidity concerns. We need to have good liquidity in the market to achieve growth. How the PSU bank crisis will be addressed will also be watched."
Ajay Bodke, CEO of PMS at Prabhudas Lilladher, said: "Unprecedented squeeze in liquidity due to crisis in NBFC sector and consequent spike in risk aversion has severely impacted aggregate demand. Sectors such as real estate, automobiles, consumer goods etc need an immediate respite. With limited fiscal maneuverability it remains to be seen how the new finance minister can inject a strong dose of fiscal stimulus to revive animal spirits," he said.
Among the Sensex stocks, Yes Bank fell 4.2% while ITC declined 3.6%. M&M, Vedanta, NTPC, Hero MotoCorp and Tata Motors slipped between 1% and 2%.
IT stocks bucked the trend with TCS, HCL Tech and Infosys ending in the green.
The GDP data for the March quarter will be announced later in the day. A Reuters survey of economists forecast growth slipped to 6.3% annually in the three months ending in March, its slowest pace in six quarters.
Nifty PSU Bank continues to be the worst performer on Nifty slipping 1.46%. All the stock complied by the sector trades negative with Bank of India (3.05%) being the biggest laggard.
Nirmala Sitharaman becomes the new Finance Minister of India along with Minister of Corporate Affairs. Amit Shah becomes the Home Minister while Rajnath Singh gets the Ministry of Defence. Piyus Goyal will continue with Rail Ministry. Ravi Shankar Prasad is the Minister of Law and Justice, Minister of Communications and Minister of Electronics and Information Technology
The broader market remains volatile as both the Midcap and Smallcap indices staged a mixed performance. BSE Midcap up 0.19% while Smallcap is down 0.48%.
IT stocks were in the limelight today with TCS, HCL Tech and Infosys leading the gains. Shares of TCS were up 2%, extending gains to the fifth day.
Shares of oil marketing companies IOC, BPCL and Indian Oil were up around 2% in noon trade. Global oil prices were at 3-month low after US President Donald Trump said he would impose tariffs on imports from Mexico, stoking fears about global economic growth. Front-month Brent crude futures, the international benchmark for oil prices, were at $65.86, their lowest since March 11.
When Bharti Airtel Ltd released its statutory financial results earlier this month, the company did not share segmental details due to rights issue related compliance restrictions. The company released these details on Thursday and operating metrics show notable improvement. Shares were up 1% in noon trade. (Read: Q4 metrics show Bharti Airtel withstanding industry churn better)
Rupee was trading higher at 69.74 as compared to Thursday's close of 69.88. Traders are awaiting gross domestic product (GDP) data, to be released later today. Analysts are also factoring in a rate cut by the RBI early next month. "Inflation has been edging higher in recent months, but at sub-3%, readings are still below the 4% target, which provides the central bank the room to consider overriding growth concerns," said Radhika Rao, economist at DBS Bank.
The government 10-year bond yield today hit a fresh 18-month low as crude oil prices slipped slide after US President Donald Trump said the US would impose tariffs on all Mexican goods. At 9.20 am, the 10-year bond yield was at 7.065% - a level last seen on 7 December 2017, compared with Thursday's close of 7.135%. Bond yields and prices move in opposite directions.
State-owned Coal India on Thursday posted an over four-fold rise in consolidated profit at ₹6,024.2 crore for March 2019 quarter on the back of higher sales and lower expenses. The company had posted a profit of ₹1,302.6 crore in the year-ago period, Coal India (CIL) said in a filing to the BSE. Consolidated sales of the country's largest miner during the January-March quarter stood at ₹26,704.2 crore, an increase of 7.9 per cent. Total expenses during the quarter dropped to ₹21,473.1 crore, over ₹27,396.5 crore in the year-ago period.
China's factory activity in May contracted more than markets had expected, increasing the pressure on Beijing to roll out more stimulus to support an economy hit hard by a bruising trade war with the United States. The official Purchasing Managers' Index (PMI) fell to 49.4 in May from 50.1 in April, data from the statistics bureau showed. Analysts surveyed by Reuters had forecast the PMI to be down a notch at 49.9, below the 50-point mark separates expansion from contraction on a monthly basis. Friday's weak manufacturing readings, which follow a recent raft of soft data across the retail, export and construction sectors, increases concerns about the risk of a global recession and push more central banks to adopt an accommodative monetary stance. (Reuters)