Markets trade in red in early deals

Indian equity benchmarks made gap-down opening and were trading lower in early deals on Wednesday on economic growth concerns and tracking sell-off in Asian peers amid jump in oil prices. Traders were concerned with the first advance estimates released by the Central Statistics Ministry showing that the government has estimated India's GDP growth during fiscal 2019-20 at 5% as compared to 6.8% in the year-ago period. The decline has been mainly on account of deceleration in manufacturing sector growth, which is expected to come down to 2% in 2019-20 from 6.2% in the year-ago fiscal. Also, some cautiousness came in with a private report indicating that markets view the rally in Brent oil prices, triggered by geopolitical tensions, as a threat to the improvement in India's FY20 current account deficit and forecasts for a balance of payment surplus. Though, markets managed to recover some of the losses as market participants took note of Finance minister Nirmala Sitharaman’s statement that the government is taking various steps to simplify the taxation system and eliminate harassment of honest taxpayers. Moreover, the government data on national income showed that the country’s per-capita monthly income is estimated to have risen by 6.8% to Rs 11,254 during 2019-20.

On the global front, most of the Asian markets were trading in red amid escalating tensions in the Middle East after Iran fired missiles at Iraqi airbases hosting US troops. The attack, in retaliation for the US airstrike last week that killed top Iranian military commander Qasem Soleimani, has raised fears of a wider conflict in the Middle East. Back home, metal stocks were in focus with ICRA’s statement that prices of aluminium and copper are showing signs of recovery in the last three months as trade tensions in international markets have eased to an extent leading to an improvement in sentiment.

In stock specific development, Suzlon Energy fell as it defaulted on its loan obligations of Rs 7,256.38 crore. This includes principal of Rs 6,717.44 crore and Rs Rs 538.94 crore interests accrued thereon. On the other hand, YES Bank jumped as it is planning to hold a board meeting on January 10 to consider and approve raising of funds by issuance of equity shares or depository receipts or convertible bonds or debentures or warrants, through permissible modes.

The BSE Sensex is currently trading at 40655.91, down by 213.56 points or 0.52% after trading in a range of 40476.55 and 40694.10. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.52%, while Small cap index was down by 0.43%.

The only gaining sectoral indices on the BSE were IT up by 0.37% and TECK was up by 0.26%, while Capital Goods down by 1.14%, Bankex down by 0.97%, Industrials down by 0.95%, Realty down by 0.90% and PSU was down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.05%, Tech Mahindra up by 0.84%, Bajaj Auto up by 0.31% and Indusind Bank up by 0.08%. On the flip side, Larsen & Toubro down by 1.43%, Kotak Mahindra Bank down by 1.39%, HDFC Bank down by 1.30%, Axis Bank down by 1.17% and SBI down by 1.13% were the top losers.

Meanwhile, the National Statistical Office (NSO), under Ministry of Statistics and Programme Implementation, in its First Advance Estimates of National Income, 2019-20, has stated that India's Gross Domestic Product (GDP) growth is expected to fall to an 11-year low of 5% in the current fiscal year (FY20), as compared to the growth rate of 6.8% in 2018-19, mainly due to poor showing by manufacturing and construction sectors. According to back series GDP data released by the government in November 2018, the previous low in economic growth was recorded at 3.1% in 2008-09. Recently, the Reserve Bank of India (RBI) had also lowered its forecast for the economic growth to 5% while announcing its bi-monthly monetary policy.

As per the data, real GDP or GDP at Constant Prices (2011-12) in the year 2019-20 is likely to attain a level of Rs 147.79 lakh crore, as against the Provisional Estimate of GDP for the year 2018-19 of Rs 140.78 lakh crore, released on May 31, 2019. Real GVA, i.e, GVA at Basic Constant Prices (2011-12) is estimated to increase from Rs 129.07 lakh crore in 2018-19 to Rs 135.40 lakh crore in 2019-20. Estimated growth of real GVA in 2019-20 is 4.9% as against 6.6% in 2018-19.

Among the sectors, deceleration in growth will also be witnessed in other key segments, like agriculture; electricity; gas and water supply; trade; hotel and transport sector; financial; real estate; and professional services. Whereas, some sectors, including mining, public administration, and defence, showed minor improvement. The manufacturing sector output growth will decelerate to 2% in 2019-20, down from 6.9% in the previous financial year. Likewise, the construction sector growth is estimated at 3.2% as against 8.7% in 2018-19.

Besides, the GVA at basic prices for 2019-20 from agriculture, forestry and fishing sector is estimated to grow by 2.8% as compared to 2.9% in 2018-19. As regards, mining and quarrying sector, the GVA at basic prices for 2019-20 is estimated to grow at 1.5% as compared to 1.3% in 2018-19. GVA at Basic Prices for 2019-20 from ‘Electricity, Gas, Water Supply and Other Utility Services’ sector is expected to grow by 5.4% as compared to growth of 7.0% in 2018-19. The estimated growth in GVA for the Trade, Hotels, Transport and Communication and Services related to Broadcasting services during 2019-20 is placed at 5.9% as against growth of 6.9%in the previous year.

The Per Capita Net National Income during 2019-20 is estimated to be Rs 1,35,050 showing a rise of 6.8% as compared to Rs 1,26,406 during 2018-19 with the growth rate of 10.0%. Gross Fixed Capital Formation (GFCF) at Current Prices is estimated at Rs 57.42 lakh crore in 2019-20 as against Rs 55.70 lakh crore in 2018-19. At Constant (2011-12) Prices, the GFCF is estimated at Rs 45.93 lakh crore in 2019-20 as against Rs 45.48 lakh crore in 2018-19. Government Final Consumption Expenditure (GFCE) at Current Prices is estimated at Rs 24.34 lakh crore in 2019-20 as against Rs 21.35 lakh crore in 2018-19. At Constant (2011-12) Prices, the GFCE is estimated at Rs 16.65 lakh crore in 2019-20 as against Rs 15.06 lakh crore in 2018-19.

The CNX Nifty is currently trading at 12023.50, down by 29.45 points or 0.24% after trading in a range of 11929.60 and 12026.85. There were 14 stocks advancing against 35 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 2.77%, Ultratech Cement up by 0.89%, TCS up by 0.81%, Indusind Bank up by 0.71% and Bajaj Auto up by 0.69%. On the flip side, Larsen & Toubro down by 1.59%, BPCL down by 1.37%, Eicher Motors down by 1.07%, Kotak Mahindra Bank down by 0.95% and Zee Entertainment down by 0.95% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 291.24 points or 1.24% to 23,284.48, Hang Seng decreased 216.56 points or 0.76% to 28,105.50, Jakarta Composite lost 45.72 points or 0.73% to 6,233.63, Straits Times trembled 26.20 points or 0.81% to 3,221.66, KOSPI fell 18.46 points or 0.85% to 2,157.08 and Shanghai Composite declined 17.67 points or 0.57% to 3,087.13. On the flip side, Taiwan Weighted was up by 1.32 points or 0.01% to 11,881.64.