Sensex, Nifty end with notable losses

Key Indian equity markets ended the Monday’s trading session with the notable losses of more than 0.40% each. The markets made a negative start of the week and remained bearish throughput the day, as the International Monetary Fund (IMF) warned governments to gear up for a possible economic storm as growth undershoots expectations. It said the bottom-line they see an economy that is growing more slowly than they had anticipated. Adding some worries among the traders, Economic Affairs Secretary Subhash Chandra Garg said that the country actually faces shortage of capital more than the scarcity of jobs. Domestic sentiments also got hit with a private report stating that India could lose a vital US trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a widening dispute over its trade and investment policies.

However, towards end of the session, markets managed to come off their intraday low points, tracking firm European markets. The market participants got some relief with a survey of the Federation of Indian Chambers of Commerce & Industry (FICCI) stating that higher production and a better growth outlook have instilled confidence in manufacturers in the October-December quarter of 2018-19 for ramping up hiring. Adding support, Prime Minister Narendra Modi exuded confidence that India would continue to be the fastest-growing large economy, and could be the second-largest economy in the world by 2030. Some comfort also came after the commerce ministry stated that India's exports to China has reached $12.7 billion during April-December 2018 on account of growth in shipments of marine products, chemicals, plastics, petroleum products, grapes and rice.

On the global front, European markets were trading in green, as France's manufacturing output rebounded in December, rising 1.1%, after falling by a revised 1.5% in the preceding month. According to preliminary data from the statistical office INSEE, growth was driven by a 5.7% rise in the manufacture of coke and refined petroleum products, followed by a 2.6% climb in the production of transport equipment. Other manufacturing registered a 1.3% increase and the manufacture of food products and beverages grew 0.9%. Asian markets ended mostly in green, after China commerce ministry said that China's retailer and catering enterprises earned over 1 trillion yuan (S$201 billion) during the Lunar New Year holiday, defying an economic slump to rise 8.5 per cent from last year.

Back home, auto stocks ended mixed, after the latest data from auto industry body, Society of Indian Automobile Manufacturers (SIAM) showed that at a time when two-wheeler manufacturers are finding sales moving at a slow pace in the domestic market, their exports have risen by 19.49 per cent in the April-January period this fiscal. Stocks of electronic industry remained in limelight, aided by Electronics and IT Secretary Ajay Prakash Sawhney’s statement that new schemes introduced by the government will focus not only on manufacturing of electronics in India, but also positioning the country as an export hub. Also, oil & gas stocks remained in focused, as a new study by think-tank, International Institute for Sustainable Development (IISD) found that Indian government subsidies for fossil fuels, including oil and gas, have decreased by 76% over the three years to 2017, but subsidies for the coal industry have remained stable over the same period.

Finally, the BSE Sensex fell 151.45 points or 0.41% to 36,395.03, while the CNX Nifty was down by 54.80 points or 0.50% to 10,888.80.

The BSE Sensex touched a high and a low of 36,588.41 and 36,300.48, respectively and there were 14 stocks advancing against 17 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 1.47%, while Small cap index was down by 1.51%.

The only gaining sectoral indices on the BSE were TECK up by 0.25% and IT up by 0.20%, while Healthcare down by 1.88%, Energy down by 1.53%, Capital Goods down by 1.46%, Oil & Gas down by 1.41%, Basic Materials down by 1.29% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.31%, Power Grid up by 1.36%, HCL Tech. up by 0.95%, Tata Motors up by 0.76% and Kotak Mahindra Bank up by 0.71%. On the flip side, Mahindra & Mahindra down by 5.31%, ONGC down by 3.14%, Bajaj Finance down by 1.92%, Reliance Industries down by 1.87% and SBI down by 1.84% were the top losers.

Meanwhile, Department of Financial Services (DFS) secretary Rajiv Kumar has said that the Reserve Bank of India’s (RBI) restructuring package for micro, small and medium enterprises (MSMEs) announced last month will help recast Rs 1 lakh crore of loans for 700,000 eligible MSMEs. The estimate from Rajiv Kumar is much higher than domestic rating agency Icra's assessment of Rs 10,000 crore. It comes even as some banks have seen a reluctance among the target MSMEs to take advantage of the scheme.

Kumar said that 700,000 MSME units need restructuring. He also said that they all can be restructured till March 2020 without downgrading the asset. According to him, the scheme will help free up additional resources which will fuel demand and create further opportunities in the industry.

With an aim to provide support to the MSME sector, the RBI has allowed a one-time restructuring of existing debt up to Rs 25 crore for the companies which have defaulted on payment but the loans given to them have continued to be classified as standard assets. Accordingly, the decision of RBI will help the MSMEs which are facing cash crunch in the wake of demonetisation and GST implementation.

The CNX Nifty traded in a range of 10,930.90 and 10,857.10. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were IOC up by 2.39%, Tata Steel up by 2.35%, CIPLA up by 1.68 %, Tata Motors up by 1.53% and ZEEL up by 1.39%. On the flip side, Dr. Reddy’s Lab down by 5.59%, Mahindra & Mahindra down by 4.71%, ONGC down by 4.09%, Hindalco down by 3.11% and Ultratech Cement down by 2.95% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 72.72 points or 1.03% to 7,143.90, France’s CAC rose 54.45 points or 1.1% to 5,016.09 and Germany’s DAX was up by 109.12 points or 1% to 11,015.90.

Asian markets ended mostly higher on Monday, after a highly lackluster session as investors stayed wary of making significant moves due to worries about global economic growth. The Chinese market, which resumed trading after Lunar New Year holidays, closed higher with investors lapping up some shares even as they awaited a new round of US-China trade talks, set to begin in Beijing later in the week. Meanwhile, the Japanese market remained closed for a holiday for National Foundation Day.