Benchmarks trade lower with marginal cut in early deals

 Indian equity benchmarks made slightly negative start and continued their lackluster performance in early deals on Friday with marginal cut amid profit booking. Weakness in index-heavyweight IT stocks weighted on market sentiments. Traders got worried over India’s economic growth as ICRA said it expects further deterioration in India's Gross Domestic Product (GDP) growth rate in Q2 due to subdued domestic demand and weak investment activity. It forecasted the country’s GDP growth at 4.7% in second quarter of current fiscal year (Q2FY20) from 5.0% in Q1FY20. Also, some cautiousness came with report that claiming that India will need another 22 years of sustained growth to become a developed country, former Reserve Bank of India (RBI) governor C Rangarajan said that at the current growth rate, India becoming a $5 trillion economy by 2025 is simply out of question. Meanwhile, India and the United States are in talks to resolve trade issues and both New Delhi and Washington hope to find an early solution.

On the global front, Asian markets were trading mixed following the negative cues overnight from Wall Street. Worries about US-China tensions eased slightly after a report from the Wall Street Journal said China's chief trade negotiator has invited his American counterparts to Beijing for a new round of face-to-face talks. Besides, the Ministry of Internal Affairs and Communications said that overall consumer prices in Japan were up 0.2 percent on year in October. That was unchanged from the September reading, although it was shy of estimates for a gain of 0.3 percent. Back home, on the sectoral front, IT stocks came under pressure amid reports of changes in US work visa requirements aimed at protecting American workers. In scrip specific development, NTPC gained around 3% amid report that the company is likely to make an aggressive bid of about Rs 10,000 crore to buy out the Centre's stake in two hydro power producing companies - NEEPCO and THDC.

The BSE Sensex is currently trading at 40524.07, down by 51.10 points or 0.13% after trading in a range of 40493.35 and 40653.17. There were 14 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.14%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Power up by 1.35%, Energy up by 1.26%, Utilities up by 1.09%, Healthcare up by 0.83% and PSU was up by 0.40%, while IT down by 2.21%, TECK down by 2.09%, Telecom down by 1.67%, Consumer Durables down by 0.84% and Capital Goods was down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.92%, NTPC up by 2.91%, Power Grid Corporation up by 2.30%, Reliance Industries up by 1.81% and Yes Bank up by 1.56%. On the flip side, Infosys down by 3.22%, TCS down by 2.02%, HCL Technologies down by 1.66%, Tech Mahindra down by 1.59% and Bharti Airtel down by 1.43% were the top losers.

Meanwhile, amid quiet domestic demand and weak investment activity, ratings agency ICRA has said it expects further deterioration in the growth of India's Gross Domestic Product (GDP) to 4.7% in second quarter of current fiscal year (Q2FY20) from 5.0% in Q1FY20. It also forecast the country's gross value added (GVA) at basic prices in year-on-year (Y-o-Y) basis to 4.5% in the quarter ending September of FY2020 against 4.9% in Q1FY20. It added that the agriculture and services may maintain the growth rate recorded in Q1.

ICRA said with subdued domestic demand, investment activity, and non-oil merchandise exports weighing upon volume expansion, manufacturing growth is expected to decelerate further from the marginal 0.6% in Q1 of FY2020. Heavy rainfall in August-September of 2019 along with the delayed withdrawal of the monsoon and constrained activities in the mining and construction sectors also contributed to a lower demand for electricity from the agricultural and household sectors.

In addition to that, muted industrial activity reduced the demand for electricity generation. The rating agency expects the Y-o-Y GVA growth of mining and quarrying, construction, and electricity, gas, water supply and other utilities to weaken in Q2 of FY2020. It also said various lead indicators of trade reveal a broad-based deterioration in Q2 of FY2020, which would weigh upon service sector growth in that quarter.

The CNX Nifty is currently trading at 11950.75, down by 17.65 points or 0.15% after trading in a range of 11939.40 and 11968.10. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.15%, NTPC up by 2.86%, Power Grid Corporation up by 1.96%, Reliance Industries up by 1.78% and ITC up by 1.34%. On the flip side, Bharti Infratel down by 3.27%, Infosys down by 3.06%, TCS down by 1.89%, Tech Mahindra down by 1.69% and Wipro down by 1.64% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 75.74 points or 0.33% to 23,114.32, Hang Seng increased 69.18 points or 0.26% to 26,536.06, Straits Times advanced 18.84 points or 0.59% to 3,211.05 and KOSPI rose 1.37 points or 0.07% to 2,097.97. On the flip side, Jakarta Composite lost 16.36 points or 0.27% to 6,101.00, Taiwan Weighted dropped 16.61 points or 0.14% to 11,541.66 and Shanghai Composite was down by 17.17 points or 0.59% to 2,886.47.