Markets trade flat with negative bias in early deals

Indian equity benchmarks made a weak start and were trading flat with negative bias in early deals on Friday, ahead of quarterly results of index heavyweights Reliance Industries, TCS and HCL Technology amid economic growth concerns. Traders were cautious as United Nations World Economic Situation and Prospects (WESP) 2020 report lowered its GDP growth estimate for India to 5.7 percent in the current fiscal (from 7.6 percent forecast in WESP 2019) and lowered its forecast for the next fiscal to 6.6 percent (from 7.4 percent earlier). However, downside remained capped with government think-tank NITI Aayog member Ramesh Chand’s statement that farm sector growth is likely to be higher at 3.1 per cent in the current fiscal compared with 2.9 per cent in 2018-19. Traders also took note of report that the government may increase customs duty on several products like paper, footwear, rubber items and toys in the forthcoming Budget with a view to promote Make in India and boost manufacturing growth.

On the global front, Asian markets were trading mixed following overnight on the Wall Street amid upbeat economic data and corporate earnings results. In addition, the data showed that China's economy grew in line with expectations. Data released by the National Bureau of Statistics showed that China's gross domestic product or GDP grew 6.1 percent in 2019, which was well within the target of 6 to 6.5 percent growth.

Back home, telecom stocks were in focus today after the Supreme Court rejected the review petitions moved by Bharti Airtel, Vodafone Idea and Tata Teleservices against its October 2019 order on payment of dues linked to adjusted gross revenue (AGR). In stock specific development, CEAT gained as its board of directors will consider a proposal for issuance of listed/unlisted secured/unsecured redeemable non-convertible debentures on private placement basis.

The BSE Sensex is currently trading at 41887.56, down by 45.00 points or 0.11% after trading in a range of 41850.29 and 41956.12. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.06%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Energy up by 1.06%, Healthcare up by 0.32%, Capital Goods up by 0.28%, Consumer Durables up by 0.28% and Basic Materials was up by 0.24%, while Bankex down by 0.92%, PSU down by 0.76%, Realty down by 0.26%, Utilities down by 0.20% and Telecom was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.47%, Reliance Industries up by 1.66%, Nestle up by 1.00%, Tata Steel up by 0.42% and Mahindra & Mahindra was up by 0.28%. On the flip side, Indusind Bank down by 2.61%, SBI down by 2.32%, HDFC Bank down by 1.07%, HDFC down by 0.78% and ICICI Bank was down by 0.37% were the top losers.

Meanwhile, the United Nations (UN) in its World Economic Situation and Prospects (WESP) 2020 reprot has projected that India’s economy to grow by 5.7% in the current fiscal year (FY20) and expects it to rise to 6.6% in the next. The UN growth estimate for the current fiscal is drastically lower than the forecast of 7.6% made in last year’s report in January and 7% in the May update. The report said although there has been a steep decline in growth, India was still one of the high performers globally.

The report said it was expected to improve its growth rate in the coming year because of the steps being taken. According to the report, only China has a higher growth rate than India among the world’s large economies with a 6% forecast for the current calendar year. It presented a dire picture of the global economy last year when the world’s gross product growth rate dropped to 2.3%, the lowest in a decade.

In India, it said, the government has responded to those issues by announcing some stimulus steps, which we do expect to improve economic growth in 2020 going forward. However, fiscal stimulus in itself will not be enough. It mentioned two areas where India could do better: Labour and green energy. The labour markets are not performing optimally with high levels of informality (and) gender barriers that effectively limit the participation of women. In addition a high number of youth are neither working nor undergoing training. This is something the government will have address, to both improve long-term economic growth and to reach (the UN’s) sustainable development goals.

The CNX Nifty is currently trading at 12350.85, down by 4.65 points or 0.04% after trading in a range of 12321.40 and 12357.40. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.81%, Reliance Industries up by 1.76%, UPL up by 1.31%, Nestle up by 1.27% and Dr. Reddy’s Lab was up by 0.97%. On the flip side, Bharti Infratel down by 9.20%, Yes Bank down by 3.75%, Indusind Bank down by 2.35%, GAIL India down by 1.59% and SBI was down by 1.55% were the top losers.

Asian markets were trading mixed; Hang Seng decreased 12.75 points or 0.04% to 28,870.29, Jakarta Composite lost 10.25 points or 0.16% to 6,275.80, Straits Times trembled 3.13 points or 0.1% to 3,274.87 and KOSPI was down by 0.14 points or 0.01% to 2,247.91. On the flip side, Shanghai Composite gained 2.82 points or 0.09% to 3,076.90, Taiwan Weighted strengthened 8.42 points or 0.07% to 12,075.35 and Nikkei 225 was up by 117.50 points or 0.49% to 24,050.63.