Weakness persists in markets in afternoon deals

Indian benchmark indices continued to suffer sharp losses in afternoon session, on the back of selloff across sectors - led by Metal and Realty stocks. Sentiments remained weak with International Monetary Fund (IMF) cut India’s FY20 growth forecast by 30 bps to 7%, owing to weaker-than-expected outlook for domestic demand. Similarly, the FY21 forecast has been slashed by 30 bps to 7.2%. Investors failed to draw any sense of relief from Finance minister Nirmala Sitharaman signalled that the government may extend the lower corporate tax rate of 25% to all companies, giving India Inc something to cheer about. Budget had lowered the rate for most companies but excluded the biggest. Meanwhile, in line with evolving macro-economic environment, the Reserve Bank of India (RBI) has launched Utkarsh 2022, the central banks' medium- term strategy framework. On the global front, Asian markets were trading mixed on hopes for a resumption of US-China trade talks next week.

The BSE Sensex is currently trading at 37750.57, down by 232.17 points or 0.61% after trading in a range of 37708.41 and 38102.84. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.37%, while Small cap index was down by 0.98%.

The top losing sectoral indices on the BSE were Metal down by 2.87%, Realty down by 1.98%, Capital Goods down by 1.82%, Basic Materials down by 1.82% and Industrials was down by 1.75%, while there were no gainers on the sectoral indices.

The top gainers on the Sensex were HDFC up by 1.39%, Hindustan Unilever up by 0.69%, HDFC Bank up by 0.65%, Kotak Mahindra Bank up by 0.51% and Yes Bank was up by 0.39%. On the flip side, Vedanta down by 3.69%, Tata Motors - DVR down by 3.66%, Tata Steel down by 2.97%, Indusind Bank down by 2.69% and Tata Motors was down by 2.34% were the top losers.

Meanwhile, refusing demands for rollback of import duty on the paper used for printing newspapers, Finance Minister Nirmala Sitharaman has said that 10 percent customs duty on imported newsprint was a move to provide a level playing field for domestic manufacturers. She noted that there is a capacity in this country to produce newsprint, but unfortunately, domestic newsprint manufacturers are not able to find buyers because most of the newsprint is imported.

Sitharaman has stated that in the previous few months, there has been a drastic fall in price overseas from $700 per tonne to $500 per tonne. She said that kind of fall in global newsprint prices has affected the Indian manufacturers so badly that they are not able to find takers for their product. She also pointed out that the duty would adversely impact small newspapers at a time when advertising revenue was also depleting. Therefore, she said “if we are talking of Make in India but allowing indirectly to import, it does not make sense at all. I am sure the member appreciate this point that when we are trying to make Indian industry survive this kind of onslaught, this is inevitable.

Meanwhile, the total consumption of newsprint in India is estimated at 2.5-million tonnes per annum and the manufacturing capacity of the domestic industry is only 1-million tonnes. Also, there are no domestic manufacturers of uncoated and lightweight coated paper.

The CNX Nifty is currently trading at 11250.45, down by 80.60 points or 0.71% after trading in a range of 11229.80 and 11359.75. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.41%, HDFC up by 1.39%, Bharti Infratel up by 1.24%, HDFC Bank up by 0.71% and Yes Bank was up by 0.61%. On the flip side, JSW Steel down by 4.37%, Eicher Motors down by 3.89%, Vedanta down by 3.84%, Adani Ports &SEZ down by 3.36% and BPCL was down by 3.01% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 88.69 points or 0.41% to 21,709.57, Hang Seng increased 155.46 points or 0.55% to 28,621.94, Shanghai Composite gained 18.89 points or 0.65% to 2,918.83 and Straits Times was up by 2.22 points or 0.07% to 3,375.35.

On the flip side, KOSPI fell 19.15 points or 0.91% to 2,082.30, Taiwan Weighted dropped 11.50 points or 0.11% to 10,935.76 and Jakarta Composite was down by 13.72 points or 0.21% to 6,390.09.