Weakness persist in markets; Sensex below 36,750 mark

Indian benchmark indices continued to trade in red in afternoon session due to selling in frontline blue chip stocks and weak cues from global markets. The sentiment remained dull with disappointing third quarter number by Tata Motors. The company reported a consolidated net loss of Rs 26,960 crore for the third quarter of this fiscal due to asset impairment in its British arm Jaguar Land Rover (JLR).  Investors failed to take any sense of relief with a report that India has jumped eight places to 36th position on the International Intellectual Property (IP) Index, which analyses the IP climate in 50 global economies, this year. India's eight-point jump in 2019 from 44th position in 2018 is the highest increase among 50 nations mapped by the index. Besides, an appreciating rupee against the dollar in early trade, too failed to enthuse investors. On the sectoral front, auto stocks were trading lower, impacted with data released by the Society of Indian Automobile Manufacturers (SIAM) that Domestic passenger vehicle (PV) sales declined 1.87 percent to 2,80,125 units in January from 2,85,467 units in the same month last year.

On the global front, Asian markets were trading in red, following losses on Wall Street as fresh doubts emerged over the prospects for US-China trade talks and Europe's growth outlook. Back home, the BSE Sensex is currently trading at 36749.06, down by 222.03 points or 0.60% after trading in a range of 36716.11 and 36885.58. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.04%, while Small cap index was down by 0.47%.

The few gaining sectoral indices on the BSE were Realty up by 0.89%, Telecom up by 0.66%, TECK up by 0.15% and IT up by 0.13%, while Auto down by 2.88%, Industrials down by 2.12%, Metal down by 1.55%, Basic Materials down by 1.11% and Capital Goods down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 0.89%, HCL Tech. up by 0.62%, Infosys up by 0.50%, Yes Bank up by 0.40% and Indusind Bank up by 0.27%. On the flip side, Tata Motors down by 18.12%, Tata Motors - DVR down by 14.62%, Vedanta down by 2.63%, Larsen & Toubro down by 1.63% and Mahindra & Mahindra down by 1.51% were the top losers.

Meanwhile, cheering the Reserve Bank of India’s (RBI) move to bring down key interest rate by 25 basis points (bps), India Inc has expressed hopes that the move would encourage banks to lower lending rates, thereby stimulating consumption and investment demand to boost the country’s Gross Domestic Product (GDP) growth.

CII President Rakesh Bharti Mittal has stated that the 25 bps reduction in repo rate taken together with the shift in RBI's stance to 'neutral' from the earlier 'calibrated tightening, would go a long way in lifting sentiment among businesses. He noted that the rate cut is in the right direction, given that the inflation footprint has been benign for some time. According to him, the resumption of rate easing cycle, which is anticipated to bring down banks' lending rates, will provide a fillip to both consumption and investment demand.

As per Federation of Indian Chambers of Commerce and Industry (FICCI), which had hoped for a larger cut in repo rate, the 25 bps reduction will be followed up with more such measures in the subsequent months. FICCI President Sandip Somany stated that the monetary policy should complement the fiscal policy and strengthen the growth impulses slowly building in the economy. He also said “this is important as we do not foresee much impetus coming from external sources of growth as the global economy continues to show signs of moderation. In such a scenario, all levers must be used to strengthen India's domestic economy through greater consumption demand and investments.”

The CNX Nifty is currently trading at 11000.80, down by 68.60 points or 0.62% after trading in a range of 10988.65 and 11041.20. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 4.90%, Cipla up by 1.83%, BPCL up by 1.44%, Kotak Mahindra Bank up by 0.93% and HCL Tech. up by 0.53%. On the flip side, Tata Motors down by 18.35%, Indiabulls Housing finance down by 4.22%, Grasim Industries down by 3.96%, Eicher Motors down by 3.35% and Vedanta down by 2.72% were the top losers.

All the Asian markets were trading in red; Nikkei 225 slipped 418.11 points or 2.01% to 20,333.17, Hang Seng decreased 49.98 points or 0.18% to 27,940.23, KOSPI fell 26.37 points or 1.2% to 2,177.05, Jakarta Composite dropped 27.26 points or 0.42% to 6,509.20 and Straits Times was down by 2.19 points or 0.07% to 3,198.45.