Market declines on negative global cues

Key benchmark indices declined as negative global cues spoiled investors' sentiment. The barometer index, the S&P BSE Sensex, fell 156.13 points or 0.57% to 27,274.15, as per the provisional closing data. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty fell 51.20 points or 0.60% to 8,433.75, as per the provisional closing data. Selling pressure was witnessed in select mid-cap and small-cap stocks. The Sensex declined for the fifth consecutive session today, 4 November 2016. The Nifty declined for the third consecutive session today, 4 November 2016.

The Sensex and the Nifty hit their lowest intraday levels in almost four months in mid-afternoon trade. The Sensex fell 236.67 points, or 0.86% at the day's low of 27,193.61 in mid-afternoon trade, its lowest level since 8 July 2016. The index rose 68.63 points, or 0.25% at the day's high of 27,498.91 in early trade. The Nifty fell 84.70 points, or 1% at the day's low of 8,400.25 in mid-afternoon trade, its lowest level since 8 July 2016. The index rose 19.05 points, or 0.22% at the day's high of 8,504 in early trade.

The broad market depicted weakness. There were more than three losers against every gainer on BSE. 2,205 shares rose and 696 shares fell. A total of 119 shares were unchanged. The BSE Mid-Cap index provisionally fell 1.34%. The BSE Small-Cap index provisionally fell 2.20%. The fall in both these indices was higher than the Sensex's decline in percentage terms.

The total turnover on BSE amounted to Rs 4534.84 crore, higher than turnover of Rs 3202.47 crore registered during the previous trading session.

In overseas stock markets, European stocks were trading lower today, 4 November 2016, following declines overnight on Wall Street as the closeness of the US elections continues to rattle nerves in the market. Meanwhile, the Bank of England (BoE) scrapped its plan to cut interest rates, which it said could now move up or down, and raised its forecasts for 2017 growth and inflation sharply due to the slide in sterling since Britain's vote to leave the European Union. The BOE's nine policymakers all voted to keep rates on hold yesterday, 3 November 2016. There was also unanimous support to stick with August's bond-buying plans.

Most Asian stocks declined as investors were spooked by growing uncertainty about the outcome of the US presidential election next week. US stocks closed lower yesterday, 3 November 2016, marking the S&P 500's longest losing streak since the depths of the financial crisis, as Facebook shares slumped and investors fretted over election uncertainty. Fresh polls released yesterday, 3 November 2016 reportedly showed that Democrat Hillary Clinton, who is seen as the status quo candidate by markets, maintained her narrow lead over Republican Donald Trump. Investors generally view Clinton as a known quantity, but there is deep uncertainty about what a Trump win might mean for US economic policy, free trade and geopolitics.

Shares of cigarette major ITC jumped 3.62% to Rs 249.05 as fears of goods and service tax (GST) overhang has subsided after GST council has finalised four-tier tax structure. Earlier, there were uncertainties about charging higher tax on tobacco post GST. ITC gets over 45 percent of its revenue from tobacco products. The sin or demerits products (tobacco, aerated drinks, pan masala and luxury cars) will be taxed at 28 percent with additional cess, quantum of which has not been stated/finalised. However, the government has indicated that overall tax incidence on these categories will remain broadly unchanged.

Engineering and construction major L&T fell 1.77% to Rs 1,419. Media reports suggested that the government is selling stake in L&T via block deal mechanism on the stock exchanges today, 4 November 2016. As per reports, the government proposes to offload up to 3% stake in the company held under Specified Undertaking of the Unit Trust of India (Suuti). The base price for the share sale has been set at Rs 1,415.66 per share, about 2% discount to the stock's closing price of Rs 1,444.55 on the BSE yesterday, 3 November 2016, reports added. Suuti currently holds 8.14% stake in L&T as per the shareholding pattern as on 30 September 2016.

State run coal mining major Coal India lost 3.32% to Rs 315.90 on reports that a foreign brokerage has maintained underperform rating on the stock with a target price of Rs 270.

Colgate-Palmolive (India) rose 3.47% to Rs 984.55 on reports a foreign brokerage has upgraded the stock to outperform from neutral and revised target price on the stock to Rs 1,150 from Rs 1,100 earlier.

On the economic front, the GST council yesterday, 3 November 2016 approved four main tax slabs 5%, 12%, 18% and 28% under a proposed Goods and Services Tax (GST). While there will be two standard tax rates - 12% and 18% - under the GST, half of the items in the consumer price index would not be taxed at all to safeguard the interests of the poor.

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