Post Session: Quick Review

Indian equity benchmarks recovered from day’s low points, but failed to erase all the losses and ended in red terrain, tracking weakness in Asian peers on concerns about global growth. It was a negative start to the markets, as traders remained pessimistic with India Ratings’ report warning that with populist decisions like farm loan waivers and other financial support schemes likely to gain significance in the run-up to the forthcoming next general elections, aggregate fiscal deficit of the states is expected to reach 3.2 per cent in FY20. It expects the states’ revenue account on aggregate to clock a deficit of 0.5 per cent of Gross Domestic Product (GDP) in FY20 due to a higher growth in revenue spends than revenue receipt. Markets extended their fall in mid-afternoon trade and traded near intraday low levels, as sentiment on the street weakened further even as the 12 large states grew faster than national GDP in FY18, the same has not translated into job creation, as Gross State Domestic Product (GSDP) expansion has come in from sectors which are less job-intensive. 11 states have recorded lower growth in employment-intensive sectors such as manufacturing, construction and trade, and hotels, transport and communication services, compared with the national rate.

However, key indices gave up most of their losses in last leg of trade and came off their intraday low points, due to some buying witnessed in Healthcare and Consumer Durables stocks. Traders also found some support with the International Monetary Fund’s (IMF) statement that India will further build its lead as the world’s fastest-growing major economy as it picks up pace next year while the global economy is forecast to slow. India’s GDP is forecast to expand 7.5% in FY20 and 7.7% in FY21, while China’s growth is seen at 6.2% in both years. Some comfort also came with the Reserve Bank of India (RBI) proposing to relax norms for entry of new players in the retail payment systems with a view to give a boost to innovation and competition. The RBI has been issuing guidelines for various payment systems and grants authorisation to non-banks for setting up and operating payment systems.

On the global front, Asian markets ended mostly in red on Tuesday, while European markets were trading in red, after the International Monetary Fund trimmed its global outlook for 2019 and 2020. The downgrade came after China said its economy grew at the slowest pace in 30 years in the last quarter of 2018. Back home, insurance sector remained in focus with global ratings agency Moody expressed confidence about the country’s insurance sector and said it will grow strongly on the back of robust GDP growth and evolving regulations.

The BSE Sensex ended at 36452.27, down by 126.69 points or 0.35% after trading in a range of 36282.93 and 36650.47. There were 9 stocks advancing against 22 stocks declining on the index.(Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.05%, while Small cap index was down by 0.45%.(Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.21%, Consumer Durables up by 0.93%, Realty up by 0.78%, Oil & Gas up by 0.28% and IT up by 0.21%, while Metal down by 2.34%, Basic Materials down by 1.20%, Telecom down by 1.03%, Auto down by 0.87% and Industrials down by 0.60% were the top losing indices on BSE.(Provisional)

The top gainers on the Sensex were Sun Pharma up by 4.88%, Kotak Mahindra Bank up by 1.87%, Hero MotoCorp up by 1.26%, Bajaj Finance up by 1.01% and Infosys up by 0.59%. (Provisional)

On the flip side, Vedanta down by 3.55%, Tata Steel down by 3.12%, Mahindra & Mahindra down by 3.00%, HCL Tech. down by 2.25% and Bharti Airtel down by 2.01% were the top losers.(Provisional)

Meanwhile, the International Monetary Fund (IMF) in its January World Economy Outlook update has said that India’s economy is expected to grow at 7.5% in the 2019, keeping an upward trajectory as the rest of the world slumps and added that the growth will accelerate further to 7.7% in 2020. It said India's economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease.

The IMF said India's growth rate in 2018 was 7.3%. It has been projected to grow at 7.5% in 2019, which is a marginal 0.1% above its previous projection. In 2020, India is projected to grow at 7.7%. Besides, China’s growth is estimated at 6.2% for 2019 and 2020. Despite fiscal stimulus that offsets some of the impact of higher US tariffs, China's economy will slow down due to the combined influence of needed financial regulatory tightening and trade tensions with the US.

As per the report, growth in emerging and developing Asia will dip from 6.5% in 2018 to 6.3% in 2019 and 6.4% in 2020. Meanwhile, the IMF cut the global growth forecast from last October’s estimate. The global economy is projected to grow 3.5% in 2019 and 3.6% in 2020, 0.2 and 0.1 percentage points below last October’s projections. It said the downward revisions are modest. However, it believes that the risks to more significant downward corrections are rising. It also cautioned that escalation of trade tensions and a worsening of financial conditions are key sources of risk and called for policymakers to act.

The CNX Nifty ended at 10917.45, down by 44.40 points or 0.41% after trading in a range of 10864.15 and 10949.80. There were 20 stocks advancing against 30 stocks declining on the index.(Provisional)

The top gainers on Nifty were Sun Pharma up by 4.85%, Wipro up by 3.09%, Titan Co up by 1.99%, Kotak Mahindra Bank up by 1.89% and Dr. Reddys Lab up by 1.52%. (Provisional)

On the flip side, Vedanta down by 3.70%, Tata Steel down by 3.25%, Mahindra & Mahindra down by 3.09%, Zee Entertainment down by 2.78% and JSW Steel down by 2.53% were the top losers.(Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 24.26 points or 0.35% to 6,946.33, France’s CAC fell 9.46 points or 0.19% to 4,858.32 and Germany’s DAX was down by 4.77 points or 0.04% to 11,131.43.

Asian markets ended mostly in red on Tuesday amid concerns about the global economic outlook after the International Monetary Fund (IMF) slashed its world economic forecast, citing a range of triggers beyond escalating trade tensions. These potential triggers include a ‘no-deal’ Brexit for the UK and a deeper-than-envisaged slowdown in China. The IMF now projects a 3.5 percent growth rate worldwide for 2019 and 3.6 percent for 2020, down 0.2 and 0.1 percentage points below its last forecasts in October. Brexit worries also lingered as British Prime Minister Theresa May offered nothing new to break the political deadlock just 10 weeks before Britain leaves the European Union. Chinese shares ended lower as investors braced for a tough start to 2019 amid weak economic outlook at home and abroad. Further, Japanese shares ended lower as the yen strengthened on worries over slowing global growth, stalled Brexit talks and the ongoing US government shutdown.