Equity benchmarks Sensex and Nifty started on a volatile note on Thursday as weak domestic macroeconomic data and negative cues from global markets kept investors on edge.
After opening on a positive note, the 30-share index turned choppy to trade 54.61 points, or 0.14 percent, lower at 40,061.45. Similarly, the broader NSE Nifty slipped 33.20 points, or 0.28 percent, to 11,807.25, PTI said.
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On the domestic front, official data showed that retail inflation climbed to a 16-month high of 4.62 percent in October.
At 10:15 am, the BSE S&P Sensex was down by 17 points at 40,099 while the Nifty 50 edged lower by 13 points to 11,827. Except for Nifty auto and media, all sectoral indices at the National Stock Exchange were in the negative terrain, according to IANS report.
Top losers in the Sensex pack included Bharti Airtel, IndusInd Bank, Tata Motors, SBI, Tata Steel, ONGC and HUL, shedding up to 3.34 percent, according to a PTI report.
On the other hand, Infosys, Yes Bank, Asian Paints and Maruti were among the top gainers, rising up to 2.13 percent.
On Wednesday, the Sensex settled 229.02 points, or 0.57 points, lower at 40,116.06. Likewise, the Nifty dropped 73 points, or 0.61 percent, to close at 11,840.45.
Foreign institutional investors purchased shares worth Rs 584.92 crore in the capital market in the previous session, while domestic institutional investors sold equities worth Rs 890.03 crore, data available with the stock exchange showed.
According to traders, investors have turned jittery on account of weak macro numbers and negative global cues.
Retail price based consumer inflation spiked to 16-month high of 4.62 percent in October on costlier food items, reducing the headroom for a rate cut by the RBI in its monetary policy due next month.
“Weak economic data has alerted the market to turn cautious,” said Vinod Nair, Head of Research, Geojit Financial Services.
GDP data is also likely to be released by the end of the month, the expectation for which has worsened below 5 percent noted in Q1FY20, he said, adding that the central bank is unlikely to change its monetary policy soon.
Market players are now awaiting wholesale inflation numbers, scheduled to be released later in the day.
Stock exchanges on Wall Street ended on a mixed note on Wednesday after Federal Reserve chief Jerome Powell said the US economy is likely to continue to grow, but faces continued risks from the global slowdown and trade disputes.
The rupee depreciated 15 paise in early trade on Thursday tracking weak macroeconomic data, rising crude prices and negative cues from global markets.
At the interbank foreign exchange, the rupee opened marginally higher at 72.05 against the US dollar, before turning negative and dropping 15 paise to 72.24 against its previous close.
— CNBC-TV18 (@CNBCTV18Live) November 14, 2019
On Wednesday, the local unit crashed 62 paise to hit an over two-month low of 72.09 to the US dollar as poor macro data and lingering worries over US-China trade war weighed on sentiment.
Overall market sentiment remains weak on account of weak macro numbers and negative global cues, forex traders said.
Retail price based consumer inflation spiked to 16-month high of 4.62 per cent in October on costlier food items, reducing the headroom for a rate cut by the RBI in its monetary policy due next month.
Asian stocks retreat
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS, which had drifted in to positive territory in morning trade, turned negative to trade 0.4% lower.
Japan’s Nikkei stock index .N225 dropped 0.6%, while Shanghai blue chips .CSI300 turned from positive to flat and Australia’s S&P/ASX200 index wiped some of its gains to trade less than 0.5% higher by mid afternoon in Sydney.
China’s industrial production growth slowed sharply in October, rising 4.7% year-on-year, official data showed, missing forecasts of 5.4%, while retail sales also slowed to fall short of expectations and investment growth hit a record low.
“The weakness in investment and production would suggest that confidence is down and trade is probably a big factor within that,” said Shane Oliver, chief economist at AMP Capital in Sydney.
“What it does do is it puts more pressure on Chinese authorities to come to a deal with (U.S. President) Donald Trump on trade, just as President Trump’s desire to be re-elected puts pressure on him to come to a deal with the Chinese,” Oliver said.
However, the weak figures also landed as the latest round of markets optimism for such a resolution has begun to run dry.
Trump offered no update on the progress of negotiations in a policy speech on Tuesday. The Wall Street Journal reported on Wednesday that talks had snagged on farm purchases.
Meanwhile, the global fallout from the dispute is widening.
Japan’s economic growth hit its slowest pace in a year in the third quarter as soft demand knocked exports.
“Looking around the region, you’ve had some near misses of recession – Korea’s been one, Singapore’s also been one and you’ve got Hong Kong in a recession at the moment,” said Sean Darby, global equity strategist at Jeffries in Hong Kong.
“So it’s not great. It’s not a cycle that is not leaving any scars,” he said.
Worries about spiralling violence as anti-government protests intensify in Hong Kong have also soured investor sentiment.
Protesters paralysed parts of Hong Kong for a fourth day on Thursday, forcing school closures and blocking highways and other transport links in a marked escalation of unrest in the financial hub.
Hong Kong’s Hang Seng .HSI fell almost another percentage point on Thursday to a fresh one-month low. Safe havens such as the Japanese yen, Swiss franc and gold held on to gains.
U.S. stock futures ESc1 fell 0.1% in Asia on Thursday after the S&P 500 .SPX eked out a 0.07% gain on Wednesday and closed at a record high, helped by a surge in Walt Disney Co (DIS.N) shares.
U.S. stocks have climbed to record levels recently, fuelled by interest rate cuts, positive earnings, and signs the economy is bottoming out, but doubts about progress in trade talks remain a huge risk to financial markets and global growth.
A new Reuters poll showed most economists do not expect Washington and Beijing to reach a permanent trade truce over the coming year.
In currency markets, the yen JPY=EBS was quoted at 108.73 per dollar, close to a one-week high. The Swiss franc CHF=EBS traded at 0.9901 versus the greenback, near the highest in more than a week.
The Australian dollar skidded to a one-month low on Thursday after a worryingly weak reading on employment re-ignited speculation about another cut in interest rates.
U.S. crude rose 0.4% to $57.32 a barrel after a fall in stockpiles added to positive comments by the U.S. Federal Reserve head on the U.S. economy.
The yield on benchmark 10-year Treasury notes US10YT=RR fell slightly to 1.8774%
Brent futures, the global oil benchmark, rose 0.35 percent to $62.59 per barrel.
–With inputs from agencies