Post Session: Quick Review

Indian equity indices concluded last trading session of calendar year --2019 --on weak note, as investors booked year-end profits. Heavy selling in the last hour of trade dragged Sensex and Nifty below their crucial 41,300 and 12,200 levels, respectively. Markets traded in negative note since morning, amid weakness in Asian peers. Traders remained wary on private report that the government might breach the fiscal deficit target this financial year amid drop in the revenue mobilisation and expected additional expenditure by the government. Some pessimism also came with credit rating agency ICRA stating that muted economic growth, lower working capital requirements and risk aversion among lenders have compressed the incremental credit growth in current financial year (April 2019 to March 2020).

Selling got intensified during final hours of trade, as sentiments on the street weakened further after India Ratings and Research (Ind-Ra) said that the aggregate fiscal deficit of states will touch 3 per cent gross domestic product (GDP) in FY20 against the budgeted figure of 2.6 per cent. The fiscal slippage will originate from a decline in tax revenue, a lower nominal GDP and higher expenditure. Traders failed to get any sense of relief with Secretary in the DPIIT Guruprasad Mohapatra’s statement that enthused by a record foreign investment inflow, India is optimistic of continuing to be one of the world's favourite FDI destinations in 2020 on the back of the Modi government's liberalised norms and a significant jump in the ease of doing business ranking.

On the global front, Asian markets ended mostly lower on Tuesday, while European markets were trading mixed, as investors locked in gains after a record rally that was fuelled by optimism around trade and easing fears of a global recession. Back home, Renewable energy sector stocks were in focus on report that ratings agency ICRA revised its outlook for India’s renewable energy sector from stable to negative amid delays in payments from discoms and execution of projects. Telecom stocks too were in focus as the government has decided to give 5G spectrum for trials to all players, including those partnering with Huawei.  

The BSE Sensex ended at 41255.31, down by 302.69 points or 0.73% after trading in a range of 41184.73 and 41607.49. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index fell 0.09%, while Small cap index was up by 0.42%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 0.78%, Power up by 0.59%, Realty up by 0.59%, PSU up by 0.46% and Industrials up by 0.21%, while Energy down by 1.18%, Telecom down by 0.96%, Auto down by 0.93%, TECK down by 0.77% and Consumer Discretionary Goods & Services down by 0.73% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 2.01%, Sun Pharma up by 0.57%, ONGC up by 0.35%, Bajaj Finance up by 0.14% and Larsen & Toubro up by 0.07%. (Provisional)

On the flip side, Tech Mahindra down by 2.45%, Bajaj Auto down by 2.10%, Reliance Industries down by 1.88%, Hero MotoCorp down by 1.46% and Indusind Bank down by 1.24% were the top losers. (Provisional)

Meanwhile, Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that the India’s exports are expected to touch $330-340 billion during the current financial year (FY20) due to uncertain global situation and rising protectionism. During April-November, 2019-20, exports dipped by about 2 per cent to $212 billion. He mentioned that the global situation is becoming extremely challenging as rising protectionism is leading to uncertainty in global trade which will have adverse impact on it. 

He said despite having a moderate share in global trade, India’s exports have always followed the trend in global imports. Therefore, when global imports are declining, India’s exports are also likely to take a hit. He added that the infrastructure improvement and initiatives on the logistics front will further improve competitiveness of exports. Moreover, he said ‘If the global situation improves, which is likely in the first half of 2020, we may look for 15 per cent growth in exports during the next financial year.’

Besides, he said exports have to be aligned with changing import patterns of the global economy. About 50 per cent of the global imports is accounted by electrical and electronics products, automobiles, machinery, petroleum products and plastic products. Meanwhile, he mentioned ‘unfortunately, the share of such products in our exports is less than 33 per cent despite having petroleum products accounting for roughly half of it. Our global share in such products is much less than 1 per cent.’

The CNX Nifty ended at 12173.60, down by 82.25 points or 0.67% after trading in a range of 12151.80 and 12247.10. There were 10 stocks advancing against 40 stocks declining on the index. (Provisional)

The top gainers on Nifty were Coal India up by 2.94%, NTPC up by 2.19%, GAIL India up by 1.85%, Grasim Industries up by 1.04% and Sun Pharma up by 0.56%. (Provisional)

On the flip side, Zee Entertainment down by 3.72%, Tech Mahindra down by 2.57%, Bajaj Auto down by 2.06%, Reliance Industries down by 1.93% and Eicher Motors down by 1.64% were the top losers. (Provisional)

European markets were trading mixed; France’s CAC increased 3.63 points or 0.06% to 5,985.85, while UK’s FTSE 100 was down by 26.32 points or 0.35% to 7,560.73.

Asian markets ended mostly lower on Tuesday, the last trading day of 2019, as investors booked profits from gains made this month after the United States and China reached a trade deal. White House trade adviser Peter Navarro said the Sino-US phase 1 trade deal was likely to be signed in the next week but confirmation would come from President Donald Trump or US Trade Representative Robert Lighthizer. The South China Morning Post reported, citing a source, that Chinese Vice Premier Liu He is set to lead a delegation to Washington this Saturday to sign the phase one trade deal with the United States. Though, Chinese shares ended higher after official data showed that China's manufacturing sector expanded for the second straight month in December. Meanwhile, the markets in Japan, South Korea, and Indonesia were closed for New Year's Eve.