Weak trade continues on Dalal Street

Indian equity benchmarks continued their weak trade in afternoon deals, following a slew of weak earnings from top companies and as the International Monetary Fund (IMF) revised its 2019 growth forecast for India to 4.8 percent from its October projection of 6.1 percent. Some anxiety also came with a private report that surging inflation and slowing growth are raising serious concerns about the future growth prospects of the economy and as a remedial measure the government should resolve supply side hurdles and ensure more stringent governance norms. However, losses remain capped as some support came with the United Nations Conference on Trade and Development (UNCTAD) report that India was among the top 10 recipients of Foreign Direct Investment (FDI) in 2019, attracting $49 billion in inflows, a 16 percent increase from the 42 billion dollars recorded in 2018, driving the FDI growth in South Asia. On the sectoral front, coal stocks remained in focus with report that India's thermal coal imports fell for three straight months for the first time in over two years, as an economic slowdown stifled demand from industries such as cement and sponge iron.

On the global front, Asian markets were trading mostly in red, as investor sentiment was dampened following news that the International Monetary Fund or IMF lowered its global growth forecasts for this year and the next year. Investors also remained cautious as they looked ahead to major corporate earnings results and central bank policy meetings due this week. Back home, the BSE Sensex is currently trading at 41416.16, down by 112.75 points or 0.27% after trading in a range of 41301.63 and 41532.59. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.08%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were Telecom up by 1.45%, Oil & Gas up by 0.40%, Healthcare up by 0.28%, Energy up by 0.24% and TECK was up by 0.22%, while Realty down by 1.02%, Auto down by 0.89%, Metal down by 0.84%, Consumer Discretionary down by 0.76% and FMCG was down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.19%, HDFC up by 0.75%, Tech Mahindra up by 0.60%, Ultratech Cement up by 0.43% and Indusind Bank was up by 0.41%. On the flip side, Asian Paints down by 2.52%, Mahindra & Mahindra down by 2.08%, Tata Steel down by 2.08%, Power Grid down by 1.54% and Titan Company was down by 1.43% were the top losers.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in its Global Investment Trend Monitor report has stated that India was among the top 10 recipients of Foreign Direct Investment (FDI) in 2019, attracting $49 billion in inflows, a 16 percent increase from the 42 billion dollars recorded in 2018, driving the FDI growth in South Asia. It noted that the majority went into services industries, including information technology.

According to the report, the FDI flows to developed countries remained at a historically low level, falling by a further 6 percent to an estimated $643 billion. It also said that global FDI remained flat in 2019 at $1.39 trillion, a 1 percent decline from a revised $1.41 trillion in 2018. This is against the backdrop of weaker macroeconomic performance and policy uncertainty for investors, including trade tensions. Besides, it showed that cross-border M&As decreased by 40 percent in 2019 to $490 billion - the lowest level since 2014. Slowed down by sluggish Eurozone growth and Brexit, European M&A sales halved to $190 billion. Deals targeting United States companies remained significant - accounting for 31 per cent of total M&As.

Going ahead, the report expects the FDI flows to rise moderately in 2020, as current projections show the global economy to improve somewhat from its weakest performance since the global financial crisis in 2009. It also said GDP growth, gross fixed capital formation and trade are projected to rise, both at the global level and, especially, in several large emerging markets. It also expects corporate profits to remain high and signs of waning trade tensions emerge. However, it said that the decrease of announced greenfield projects by 22 per cent - an indicator of future trends, high geopolitical risks and concerns about a further shift towards protectionist policies temper expectations.

The CNX Nifty is currently trading at 12194.80, down by 29.75 points or 0.24% after trading in a range of 12162.45 and 12230.05. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 7.23%, Zee Entertainment up by 2.29%, BPCL up by 1.51%, Coal India up by 1.42% and GAIL India was up by 0.82%. On the flip side, Asian Paints down by 2.40%, Tata Steel down by 2.00%, Mahindra & Mahindra down by 1.93%, JSW Steel down by 1.82% and Indian Oil Corporation was down by 1.62% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 759.12 points or 2.64% to 28,036.79, Nikkei 225 slipped 218.95 points or 0.91% to 23,864.56, Straits Times trembled 38.03 points or 1.16% to 3,242.06, Shanghai Composite declined 35.09 points or 1.13% to 3,060.70 and KOSPI was down by 22.95 points or 1.01% to 2,239.69.

On the flip side, Jakarta Composite was up by 1.61 points or 0.03% to 6,246.65.