Benchmarks make gap-down opening; Sensex declines below 37,800 mark

Indian equity benchmarks made a gap-down opening and are trading with a cut of around a percent in early deals on Monday, breaching their crucial 37,800 (Sensex) and 11,350 (Nifty) levels on  account of weak global cues amid growing concerns about an impending US recession. Trades remain concerned ahead of the fiscal deficit and infrastructure output data for the month of February are slated for a release later in the week. Market participants shrugged off the Reserve Bank of India’s (RBI) report showing that India’s foreign exchange reserves surged by a whopping $3.602 billion to $405.638 billion in the week to March 15, driven by rise in foreign currency assets. Investors also ignored the Employees' Provident Fund Organisation (EPFO) data showing that net employment generation in the formal sector touched a 17-month high of 8.96 lakh in January. The addition in January was 131% higher as compared with 3.87 lakh EPFO subscribers added in the year-ago month.

On the global front, Asian markets are trading in red at this point of time, as investors fled to the safety of bonds as on growing worries about an impending US recession, sending global yields plunging. The US markets ended sharply lower on Friday after a US recession indicator blinked red and a report on German manufacturing raised concerns about Europe’s most important economy.

Back home, banking sector stocks edged lower despite report that the RBI has deferred the implementation of the new accounting norms, Ind AS, indefinitely, as necessary amendments to the relevant law are yet to be made. Housing finance companies (HFCs) stocks remained in focus with ICRA’s report that the liquidity crisis has crimped credit growth for HFCs and is unlikely to improve much in FY20, even as the weak external environment will put a pressure on asset quality.

The BSE Sensex is currently trading at 37793.65, down by 370.96 points or 0.97% after trading in a range of 37786.98 and 38016.76. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.97%, while Small cap index was down by 0.87%.

The lone gaining sectoral index on the BSE was Oil & Gas up by 0.10%, while Metal down by 1.90%, Realty down by 1.60%, Basic Materials down by 1.47%, Bankex down by 1.22% and Telecom was down by 1.22% were the top losing indices on BSE.

The few gainers on the Sensex were NTPC up by 0.86%, ONGC up by 0.56%, Coal India up by 0.39% and Maruti Suzuki up by 0.30%. On the flip side, Vedanta down by 2.33%, Sun Pharma down by 1.80%, Kotak Mahindra Bank down by 1.75%, Tata Steel down by 1.69% and SBI down by 1.59% were the top losers.

Meanwhile, the government has surpassed its disinvestment target for the current fiscal ending March 31, 2019 (FY19) by Rs 5,000 crore. The divestment receipts have touched Rs 85,000 crore as against a target of Rs 80,000 crore for disinvestment for FY19. The Department of Investment and Public Asset Management (DIPAM) has crossed the disinvestment target for the second year in a row.

The fifth tranche of the Central Public Sector Enterprise Exchange Traded Fund (CPSE ETF) closed on March 22, clocking in Rs 9,500 crore. Also, Power Finance Corp completed the acquisition of the government’s 52.63% stake in Rural Electrification Corp for Rs 14,500 crore on the same day. This translated to Rs 24,000 crore worth of transactions realised in a day.

In the month of March, DIPAM had garnered Rs 1,000 crore from the strategic sale of Dredging Corp to a consortium of four ports and Rs 2,000 crore from the sale of enemy shares. The government has also completed two initial public offerings (IPOs) of Mazagon Docks and MSTC in March. As of February 28, the Centre had garnered Rs 56,473 crore.

In 2017-18, DIPAM had raised Rs 1 trillion compared to a budgeted target of Rs 72,500 crore. The bulk of that was realised from ONGC’s acquisition of Hindustan Petroleum. Besides, the government has fixed the disinvestment target for the next fiscal (FY20) at Rs 90,000 crore.

The CNX Nifty is currently trading at 11349.10, down by 107.80 points or 0.94% after trading in a range of 11342.90 and 11395.65. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corp. up by 1.69%, BPCL up by 1.07%, Zee Entertainment up by 0.82%, ONGC up by 0.79% and Maruti Suzuki up by 0.50%. On the flip side, Hindalco down by 2.97%, JSW Steel down by 2.55%, Vedanta down by 2.33%, Kotak Mahindra Bank down by 1.89% and Tata Steel down by 1.78% were the top losers.

All the Asian markets are trading in red; Nikkei 225 tumbled 699.71 points or 3.24% to 20,927.63, Straits Times declined 47.12 points or 1.47% to 3,164.98, Hang Seng fell 517.43 points or 1.78% to 28,595.93, Taiwan Weighted dropped 159.46 points or 1.50% to 10,479.61, KOSPI shed 36.12 points or 1.65% to 2,150.83, Jakarta Composite decreased 85.69 points or 1.31% to 6,439.58 and Shanghai Composite was down by 42.50 points or 1.37% to 3,061.65.