Post Session: Quick Review

Extending their losing streak for third straight session, Indian equity benchmarks ended Wednesday’s trade on a pessimistic note with losses of over half a percent, as traders remain concerned ahead of key corporate results. Markets edged higher in opening trade, following positive cues from global markets. Traders also found some support with Union Minister Piyush Goyal’s statement that India is working on ways to have fairer and more equitable terms in its trade relationships with various countries. However, key indices soon pared all of their gains and took a turn towards the negative zone, as sentiments got spooked with a report that direct tax collections till January 15 stood at Rs 7.3 lakh crore, down 5.2% from the year-ago period. Gross direct tax collections - after refunds but before devolution to states - for FY20 is budgeted to grow at 17.4% to Rs 13.35 lakh crore. Traders remained in lackluster mood with a private report that India may be witnessing the most glaring setback among emerging economies, but its double pain of slowing growth and surging inflation is spreading far and wide.

Markets continued a downward trajectory in the last leg of trade, as a UN study report stated that economic inequality has risen to historic high levels across various countries with over 70 per cent of the world population living in countries where inequality has grown further and these include India and China. Some concern also came with India Ratings and Research (Ind-Ra) report that it expects GDP to grow at 5.5 percent year-on-year in FY21 but added that downside risks persist. This is only a marginal improvement over the GDP growth of 5 percent estimated by the National Statistical Office for the FY20. Traders also took a note of private report that India needs a whopping $2.64 trillion investment to meet the UN's sustainable development goals (SDGs), offering the private sector an investment opportunity of over $1.12 trillion by 2030.

On the global front, Asian markets ended mostly higher on Wednesday, while European markets were trading in green boosted by a clutch of positive earnings updates and China's effort to contain a virus outbreak. Back home, Auto stocks were in focus with Automobile dealers' body FADA stating that retail sales of passenger vehicles in December 2019 declined 9 percent to 2,15,716 units year-on-year, as even the best offers failed to lift weak consumer sentiments. Besides, insurance stocks were in focus, on global ratings agency Moody’s Investors Service report that despite low penetration, the ongoing economic slowdown will impact insurance premium collections over the next two to three years.

The BSE Sensex ended at 41087.23, down by 236.58 points or 0.57% after trading in a range of 41059.04 and 41532.29. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.35%, while Small cap index was down by 0.15%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 1.05%, TECK up by 1.03% and Telecom up by 0.17%, while Metal down by 1.61%, Oil & Gas down by 1.49%, Power down by 1.41%, PSU down by 1.36% and Utilities down by 1.22% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.60%, Nestle up by 1.52%, Infosys up by 1.06%, HCL Technologies up by 0.95% and SBI up by 0.83%. (Provisional)

On the flip side, ONGC down by 5.01%, NTPC down by 4.18%, Kotak Mahindra Bank down by 2.52%, Maruti Suzuki down by 2.35% and HDFC down by 2.09% were the top losers. (Provisional)

Meanwhile, in order to have fairer and more equitable terms in trade relationships with various countries, the commerce and industry minister Piyush Goyal has said India is working on it. He also called for greater cooperation among various nations to realise the huge growth prospects in the Indian Ocean region and also for tackling the important issue of climate change. He added that the Regional Comprehensive Economic Partnership (RCEP) in its present form was clearly an unworkable agreement. Any pact needs to take into account several factors. He noted that the country is grappling with a huge trade deficit, particularly with China and many other nations in the region.

Referring to India's decision to pull out of the RCEP, Goyal said for the first time, India demonstrated that trade cannot be dictated by diplomacy. He asserted that the RCEP has had to factor in several diversities among partners, but India has serious concerns about climate change and is seeking greater cooperation on fair terms. He said ‘we are like a pivot for the Indian Ocean and we believe this region has huge potential. At the same time, India is very much concerned about the issue of climate change.’

He further said the entire grouping around the Indian Ocean will play a very important role, while keeping in mind fair and equitable distribution. India also expects greater cooperation among various nations on climate change. He said ‘we in India are also working on how to put in place more equitable terms in our trade relations with various countries.’ Besides, the Indian Ocean Rim sees two-thirds of the world's oil shipments pass through its waters and is home to half of the world's container ships that support 2.7 billion people.

The CNX Nifty ended at 12103.00, down by 66.85 points or 0.55% after trading in a range of 12087.90 and 12225.05. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 5.44%, Grasim Industries up by 2.48%, TCS up by 1.70%, Nestle up by 1.70% and Infosys up by 1.06%. (Provisional)

On the flip side, Coal India down by 5.39%, ONGC down by 5.38%, NTPC down by 4.31%, Tata Motors down by 3.11% and UPL down by 2.72% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 13.99 points or 0.18% to 7,624.69, France’s CAC fell 1.10 points or 0.02% to 6,047.09 and Germany’s DAX was up by 29.49 points or 0.22% to 13,585.36.

Asian markets ended mostly higher on Wednesday as earlier concerns about the coronavirus outbreak in China abated. The World Health Organization (WHO) is expected to declare a Public Health Emergency of International Concern in response to the coronavirus outbreak which appears to have originated in eastern China, and spread to more Chinese cities including Beijing and Shanghai. Seoul shares ended higher after data showed South Korea's government spending surge helped the economy post its fastest quarterly growth in more than two years. Though, Malaysian shares ended lower after government report showed that the country's consumer price inflation rose 1% year-on-year in December, following a 0.9% increase in November.