Indian share markets witnessed a sharp decline in the afternoon session as the RBI lowered its growth forecast for the fiscal year 2019-20 to 6.1% from 6.9% earlier.

Selling pressure was also seen as the monetary policy committee (MPC) noted that risks to growth have emerged due to weak domestic demand and sagging export prospects on account of continuing trade tensions.

Barring IT sector, all sectoral indices ended on a negative note with banking stocks, consumer durables stocks and capital goods stocks, leading the losses.

At the closing bell, the BSE Sensex stood lower by 434 points (down 1.1%) and the NSE Nifty closed down by 139 points (down 1.2%). The BSE Mid Cap index ended the day down 0.9%, while the BSE Small Cap index ended the day down by 0.8%.

The rupee was trading at 70.96 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was down by 1.1% and the Shanghai Composite stood lower by 0.9%. The Nikkei was up 0.3%.

In news from the finance sector, Aavas Financiers share price witnessed buying interest today.

Shares of the company climbed 5% after the Reserve Bank of India (RBI) increased the household income and lending limit for non-banking finance companies (NBFC) and microfinance (MFIs) borrowers while announcing the monetary policy.

The stock of the housing finance company surpassed its previous high of Rs 1,670, touched on September 23, 2019 and hit a new high of Rs 1,693 on the BSE.

The RBI increased household income limit for borrowers of non-banking finance companies and microfinance Institutions to Rs 1.25 lakh for rural areas and Rs 2 lakh for urban and semi-urban areas. Earlier, the amount limit was Rs 1 lakh for rural areas and Rs 1.60 lakh for urban/semi urban areas.

RBI Governor Shaktikanta Das said the hike was in order to boost credit flow to the bottom of the economic pyramid. The central bank also raised the lending limit from Rs 1 lakh to Rs 1.25 lakh per eligible borrower.

Last month, Aavas had received an investment of Rs 3.5 billion from IFC, a member of the World Bank Group, through issuance of non-convertible debentures (NCDs).

The company said it will use the proceeds to grow its affordable housing finance program in the rural and semi-urban areas of Rajasthan, and neighboring areas.

In other news, shares of Indiabulls Housing Finance continued their downtrend and slipped over 7% today. Last week, the Delhi high court had ordered a probe into allegations of financial irregularities, siphoning of funds and other violations against the promoters of the company.

On Monday, shares of the company saw their sharpest intraday fall, plunging up to 38%.

Note that public and private sector banks have an exposure of around Rs 275.8 billion, in the form of loans and non-convertible debentures, to the company.

State Bank of India has the highest exposure of Rs 81 billion followed by Bank of Baroda and Yes Bank at Rs 64.6 billion and 60.4 billion, respectively.

How all the above matters pan out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Moving on to news from the automobile sector, Maruti Suzuki share price was in focus today. The company said it has sold over 2 lakh units of BS VI emission compliant vehicles in just six months of launching first such car in the country.

Maruti had launched its BS VI compliant range, starting with Alto 800 and Baleno in April 2019. Out of 16 models, the company has eight models which are now BS VI compliant.

To know more, you can read Maruti's latest result analysis and Maruti's 2018-19 annual report analysis on our website.

In other news, Force Motors share price was also in focus today. The company has reported the production, sales and export of the products manufactured by the company during the month of September 2019.

The company's production of Small Commercial Vehicles (SCV) & Light Commercial Vehicles (LCV) stood at 1,074 units and Utility Vehicles (UV), Sports Utility Vehicles (SUV) & Tractors stood at 808 units.

The company's domestic sales for SCV & LCV stood at 899 units and UV, SUV & Tractors stood at 826 units. The company has exported 130 units of SCV & LCV in month of September 2019.

Note that multiple factors have affected the auto sector of late. The liquidity crisis faced by NBFCs, regulatory changes leading to increased costs, new emission norms...they have all taken their toll.

The industry's sales and production levels have plunged, leading to job losses. In August, all major OEMs consisting of passenger, commercial, two and three-wheeler manufacturers have reported a massive decline in domestic sales.

As per Society of Indian Automobile Manufacturers' (SIAM) August sales figures, the overall sectoral offtake in the domestic market has plunged 23.6% to 1,821,490 units, from 2,382,436 units sold during the corresponding month of the previous year.

On 20 September, the government had reduced corporate tax rates from 30% to 22% to boost consumer demand and increase spending by private companies. The effective tax to be paid by the companies, including surcharge and cess, will be 25.17%.

However, in the euphoria of the government's tax rate cuts, an important announcement went unnoticed.

The road transport and highways ministry has proposed a huge increase in re-registration of vehicles which are more than 15 years old.

The proposed hike will be implemented from July 2020. The policy change is aimed at reducing pollution by scrapping older vehicles on the road.

As per Co-head of Research, Tanushree Banerjee, this might come as a welcome relief for automakers who have seen severe fall in sales over the past 1 year.

Signs of Revival in the Auto Sector

Here's what she wrote about it in a recent edition of The 5 Minute WrapUp...

• The upcoming festive season and the recent policy measures might just be the trigger needed to revive the sector.
  
  A leading auto player makes it to my list of 7 stocks to buy.
  
  I believe, rising disposable incomes and aspirations of India's youth, will be the key trends benefiting this market leader in the long run.

As per Tanushree, these are just some of the trends that will play a big part in the Sensex 1,00,000 journey.