Local equities sink in red; Nifty drops below 12,300 mark

Tracking weak global cues, local equities added losses to continue their weak trade in the morning session hovering near the lowest point of the day on account of selling in frontline counters after US said its initial trade deal with China does not include tariff rollback. Selling crept in with report that the bilateral trade between India and China declined by about $3 billion last year while India’s trade deficit continues to be high amounting to $56.77 billion as both countries experienced economic slowdown. Adding some woes, a report stated that retail inflation, which accelerated to 7.35 per cent in December and could breach 8 per cent in January, may force the Reserve Bank of India to hold rates in the monetary policy review next month. However, market participants ignored FICCI President Sangita Reddy’s statement that she urged the government not to worry too much about the fiscal deficit and try to pump the economy by increasing investments to arrest slowdown and accelerate growth.

On the global front, all Asian markets are trading lower, as the luster of the ‘phase one’ trade deal between the US and China faded and the reality of a long road ahead loomed. Back home, California’s Lieutenant Governor Eleni Kounalakis stated that the US state of California wants to build robust partnership with India to create inclusive and sustainable economic growth.

The BSE Sensex is currently trading at 41746.99, down by 205.64 points or 0.49% after trading in a range of 41723.46 and 41969.86. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.22%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Realty up by 1.39%, Consumer Durables up by 0.85%, Consumer Disc up by 0.44% and Auto was up by 0.07%, while BANKEX down by 0.94%, TECK down by 0.57%, IT down by 0.56%, PSU down by 0.56% and Oil & Gas was down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.35%, Hero MotoCorp up by 1.19%, Bajaj Auto up by 1.08%, Bajaj Finance up by 0.31% and Sun Pharma was up by 0.27%. On the flip side, IndusInd Bank down by 4.07%, Infosys down by 1.13%, SBI down by 1.13%, ICICI Bank down by 1.10% and Ultratech Cement was down by 1.04% were the top losers.

Meanwhile, the Central Electricity Authority in its latest data has showed that India's annual electricity demand grew at its slowest pace in six years in 2019 amid a broader economic slowdown that led to a drop in sales of everything from cars to cookies and also to factories cutting jobs. Electricity demand is seen as an important indicator of industrial output in the country and a sustained decline could mean a further slowdown in the economy.

Data showed that India's power demand grew at 1.1% in 2019, the slowest pace of growth since a 1% uptick seen in 2013. The power demand growth slowdown in 2013 was preceded by three strong years of consumption growth of 8% or more. In December 2019, the country's power demand fell 0.5% from the year-earlier period, representing the fifth straight month of decline, compared with a 4.3% fall in November.

In October, power demand had fallen 13.2% from a year earlier, its steepest monthly decline in more than 12 years, as a slowdown in Asia's third-largest economy deepened. Industry accounts for more than two-fifths of India's annual electricity consumption, while homes account for nearly a fourth and agriculture more than a sixth. The slower demand growth is a blow for many debt-laden power producers, who are facing financial stress and are owed over $11 billion by state-run distribution companies.

The CNX Nifty is currently trading at 12297.30, down by 65.00 points or 0.53% after trading in a range of 12290.00 and 12350.30. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 1.28%, Hero MotoCorp up by 1.10%, Bajaj Auto up by 1.02%, Hindalco up by 0.94% and Zee Entertainment was up by 0.56%. On the flip side, IndusInd Bank down by 4.08%, Wipro down by 3.48%, BPCL down by 1.74%, Yes Bank down by 1.30% and Dr. Reddy’s Lab was down by 1.28% were the top losers.

All Asian markets are trading lower, Hang Seng decreased 261.15 points or 0.9% to 28,623.99, Nikkei 225 slipped 136.68 points or 0.57% to 23,888.49, Taiwan Weighted dropped 82.76 points or 0.68% to 12,097.05, Jakarta Composite lost 24.21 points or 0.38% to 6,301.20, Shanghai Composite declined 20.50 points or 0.66% to 3,086.32, Straits Times trembled 12.67 points or 0.39% to 3,257.87 and KOSPI fell 8.95 points or 0.4% to 2,229.93.