Markets reel under losses; Sensex closes below 36,000 mark

Indian equities suffered weakness on Tuesday, with both the larger peers, Sensex and Nifty closing the day below their psychological levels of 36,000 and 10,850, respectively. The indices made a weak start of the session impacted by domestic ratings agency Icra’s report that India Inc witnessed a dip in both revenue growth as well as margins in the December quarter compared to the preceding three months. The analysis is based on the aggregate numbers reported by 648 listed companies, which shows a revenue growth of 17.3% in Q3 down from 19.4% in the preceding three months. Domestic sentiments also got hit with Bibek Debroy, the head of Prime Minister’s economic advisory panel, stating that India lacks good data on economy and jobs as it is majorly an informal economy. Some concerns also came with reports that the flow of foreign direct investment (FDI) into India is dropping and may suffer its first full-year decline since Prime Minister Narendra Modi came to power in 2014. Inbound FDI dropped 7% to $33.5 billion in the nine months between April and December 2018, compared with $36 billion in the year-earlier period.

The markets remained sluggish throughout the day but managed to settle off day’s low points, taking support from the State Bank of India (SBI) Research report that Indian economy is likely to grow in the range of 6.6-6.7 percent during the third quarter of the current fiscal year 2018-19 (FY19). It added that for the full financial year, the growth will be 7.2 percent. The market participants got some relief with reports that the Ministry of Housing & Urban Affairs gave approval for the construction of another 5,60,695 more affordable houses for the benefit of urban poor under Pradhan Mantri Awas Yojana (Urban). Adding some support, the Commerce and Industry Minister Suresh Prabhu said that India’s goods and services exports, which are recording healthy growth so far, would surpass $500 billion in fiscal 2018-19, despite challenges being faced on the global trade front. Prabhu also said that the ministry is working on identifying new products and new markets to further push the shipments.

On the global front, European markets were trading in red, as Austria's production growth eased in December, mainly due to weaker expansion in construction. The data from Statistics Austria showed that the production index that combines both industry and construction advanced 1.8 percent year-over-year in December, following a 2.9 percent rise in November. Besides, Germany's consumer confidence is set to hold steady in March, amid the sustained sharp decline in economic expectations and stable income expectations. The survey data from the GfK revealed that the forward-looking consumer confidence indicator showed a reading of 10.8 for March, same as in February. Asian markets ended in red, as investors seek more clarity on the US-China trade talks and awaited the outcome of US President Donald Trump's second meeting with North Korea's Kim Jong Un.

Back home, reality sector stocks ended lower with CRISIL Research’s report that even as the latest GST cut on under-construction housing projects is expected to increase demand, real estate developers may see mixed results. It added that the withdrawal of input tax credit (ITC) would impact the profitability of developers. Sugar sector stocks ended mixed with India Ratings’ report that even as there is lower sugar production due to deficient rainfall in sugar season (SS) 2018-19, surplus situation continued following high carry-over stock from the last season. Further, stocks related to pharma & chemicals industries remained in focused after Commerce and Industry Suresh Prabhu, met representatives of pharma and chemicals industries. The meeting was held to discuss the preparation of a strategy and an action plan which will help chemicals and pharma companies to boost exports and identify specific problems that are effecting both these industries and hampering production and exports.

Finally, the BSE Sensex lost 239.67 points or 0.66% to 35,973.71, while the CNX Nifty was down by 44.80 points or 0.41% to 10835.30.

The BSE Sensex touched a high and a low of 36,172.52 and 35,714.16, respectively and there were 09 stocks advancing against 22 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.27%, while Small cap index was down by 0.50%.

The top gaining sectoral indices on the BSE were Auto up by 0.32%, Oil & Gas up by 0.18%, Utilities up by 0.12%, Metal up by 0.07% and TECK up by 0.04%, while Realty down by 1.63%, Bankex down by 0.75%, Capital Goods down by 0.69%, FMCG down by 0.47% and Energy down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.07%, Coal India up by 2.82%, TCS up by 2.39%, Tata Motors - DVR up by 1.23% and Axis Bank up by 0.87%. On the flip side, HCL Tech down by 2.26%, HDFC down by 2.18%, ICICI Bank down by 2.08%, Infosys down by 1.75% and SBI down by 1.44% were the top losers.

Meanwhile, NITI Aayog CEO Amitabh Kant has said that upliftment of over 100 aspirational districts can help Indian economy to grow at 9-10 percent over the next three decades as it is imperative to have equity for growth to sustain. As part of the NITI Aayog's vision, the 'Transformation of Aspirational Districts' programme aims to quickly and effectively transform these 115 districts.

Kant said “It is very important to focus on nutrition, learning outcomes and health. The prime minster's focus is on the 115 aspirational districts of India...you can't have growth without equity.” He noted that the broad contours of the programme are convergence of central and state government schemes, collaboration of central, state level 'Prabhari' officers and district collectors, and competition among districts driven by a mass movement. He pointed out that with states as the main drivers, this programme focuses on the strength of each district, identify low-hanging fruits for immediate improvement, measure progress, and rank districts.

Talking about the pharma sector, NITI Aayog CEO said that India entrepreneurship in the pharmacy sector has been truly top-class. He said “India has demonstrated its ability, and Ayushman Bharat is a great example of that. You will providing health facility to 500 million people, more than the population of USA, Europe, Mexico put together.” He stated that India has demonstrated its ability to provide medical health care at one-tenth the cost over the European and the American nations and that's a great example.

The CNX Nifty traded in a range of 10,888.75 and 10,729.30. There were 19 stocks advancing against 30 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were ZEE up by 6.01%, Tata Motors up by 4.13%, Indian Oil Corporation up by 2.81%, Coal India up by 2.75% and TCS up by 2.39%. On the flip side, Indiabulls Housing Finance down by 3.49%, HCL Tech. down by 2.20%, HDFC down by 2.03%, ICICI Bank down by 2.00% and Infosys down by 1.77 % were the top losers.

European markets were trading in red; UK’s FTSE 100 dipped 73.45 points or 1.02% to 7,110.29, France’s CAC dropped 24.53 points or 0.47% to 5,207.32 and Germany’s DAX was down by 34.29 points or 0.3% to 11,471.10.

Asian markets ended mostly in red on Tuesday as optimism on United States-China trade talks faded and caution set in ahead of the second summit between US President Donald Trump and North Korean leader Kim Jong Un. Investors also awaited Federal Reserve Chairman Jerome Powell's testimony before Congress for fresh clues about the outlook for US interest rates. Japanese shares ended lower amid selling pressure owing to window-dressing towards the end of the fiscal year. Further, Chinese shares fell on profit taking after strong gains in the previous session.