Benchmarks witness bloodbath in early deals

Indian equity markets made gap-down start and are trading lower with cut of around a percent in early deals on Tuesday amid report that India's economic growth has slumped for the fifth straight quarter to an over six-year low of 5% in the first three months (April-June) of current fiscal year (Q1FY20). The previous low in Gross Domestic Product (GDP) growth was recorded at 4.3% in the January-March quarter of 2012-13. Domestic sentiments remained pessimistic with the report that India's manufacturing growth declined to its 15-month low in August. Some cautiousness also came with the report that the government data showing that growth of eight core industries -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- dropped to 2.1 per cent in July, mainly due to contraction in coal, crude oil and natural gas production. The eight core sector industries had expanded by 7.3 per cent in July last year.

On the global front, the Asian markets were also mostly trading in red as the US-China trade tensions continue to rise after China lodged a complaint against the United States at the World Trade Organization over US import duties. The US markets remained closed on Monday on account of Labor Day.

Back home, banking stocks remained in focus after the government unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth. Auto stocks also remained in focus on report that India’s automakers reported their monthly sales numbers, which showed that sales of four- and two-wheelers almost halved in August, compared to the equivalent month last year.

The BSE Sensex is currently trading at 36985.96, down by 346.83 points or 0.93% after trading in a range of 36962.82 and 37188.38. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.88%, while Small cap index was down by 0.41%.

The only gaining sectoral indices on the BSE were IT up by 0.68% and TECK was up by 0.47%, while Bankex down by 1.62%, Metal down by 1.56%, Oil & Gas down by 1.55%, PSU down by 1.39% and Consumer Durables was down by 1.34% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.17%, HCL Technologies up by 1.25%, TCS up by 0.99%, Hero MotoCorp up by 0.60% and Power Grid Corporation up by 0.47%. On the flip side, Tata Motors down by 4.03%, Tata Motors - DVR down by 3.55%, Mahindra & Mahindra down by 2.37%, ICICI Bank down by 2.34% and Tata Steel down by 2.16% were the top losers.

Meanwhile, continuing downward turn, India's economic growth has slumped for the fifth straight quarter to an over six-year low of 5% in the first three months (April-June) of current fiscal year (Q1FY20). The growth slumped as consumer demand and private investment slowed amid deteriorating global environment. The previous low in Gross Domestic Product (GDP) growth was recorded at 4.3% in the January-March quarter of 2012-13. The growth had stood at 5.8% in January-March of 2019 and 8% in April-June 2018. India's GDP growth was behind China's 6.2% in April-June, its weakest pace in at least 27 years.

As per the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation data, GDP at Constant (2011-12) Prices in Q1 of 2019-20 is estimated at Rs 35.85 lakh crore, as against Rs 34.14lakh crore in Q1 of 2018-19, showing a growth rate of 5.0%. Quarterly GVA at Basic Price at Constant (2011-12) Prices for Q1 of 2019-20 is estimated at Rs 33.48 lakh crore, as against Rs 31.90 lakh crore in Q1 of 2018-19, showing a growth rate of 4.9% over the corresponding quarter of previous year. GDP at Current Prices in Q1 2019-20 is estimated at Rs 48.93 lakh crore, as against Rs 45.31 lakh crore in Q1 2018-19, showing a growth rate of 8.0%. GVA at Basic Price at Current Prices in Q1 2019-20, is estimated at Rs 45.14 lakh crore, as against Rs 41.82 lakh crore in Q1 2018-19, showing an increase of 7.9%.

The data showed that the economic activities which registered growth of over 7% in Q1 of 2019-20 over Q1 of 2018-19 are ‘Electricity, Gas, Water Supply & Other Utility Services’, ‘Trade, Hotels, Transport, Communication and Services Related to Broadcasting’ and ‘Public Administration, Defence and Other Services’. Besides, the Gross Value Added (GVA) growth in the manufacturing sector tumbled to 0.6% in the first quarter of this fiscal from 12.1% expansion a year ago. Similarly, farm sector GVA growth remained subdued at 2% as compared to 5.1% in the corresponding period of the previous fiscal. Construction sector GVA growth too slowed to 5.7% from 9.6% earlier. However, mining sector growth climbed to 2.7% from 0.4% a year ago.

Meanwhile, the government's Chief Economic Adviser K V Subramanian has said India's GDP numbers indicate that growth, while still high, has shown some slowdown. Similar phenomenon has been observed previously in the last quarter of 2013-14. He noted that this has been on account of both exogenous and endogenous factors. The government is quite alive to the situation especially global headwinds arising out of deceleration in the developed economic and Sino-American trade conflict which has contributed to the slowdown.

The CNX Nifty is currently trading at 10891.20, down by 132.05 points or 1.20% after trading in a range of 10885.90 and 10967.50. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.53%, HCL Technologies up by 1.38%, Bharti Infratel up by 1.24%, TCS up by 0.91% and Britannia up by 0.83%. On the flip side, Tata Motors down by 3.90%, Indian Oil Corporation down by 3.88%, Ultratech Cement down by 3.05%, ICICI Bank down by 3.01% and Indiabulls Housing down by 2.95% were the top losers.

Asian markets were trading mostly in red; Hang Seng slipped 24.85 points or 0.10% to 25,601.70, Taiwan Weighted tumbled 47.68 points or 0.45% to 10,587.17, KOSPI decreased 3.87 points or 0.20% to 1,965.32, Jakarta Composite slipped 7.96 points or 0.13% to 6,282.59 and Shanghai Composite declined 1.57 points or 1.57% to 2,922.54.On the flip side, Nikkei 225 gained 17.86 points or 0.09% to 20,638.05 and Straits Times was up by 7.66 points or 0.25% to 3,090.62.