Bourses pain deepen on Wednesday

Indian equity bourses extended their southward journey for third straight session on Wednesday, with Sensex & Nifty ending lower by around 0.50% each. The start of day was on firm note, aided 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. But soon, indices lost gaining momentum, amid 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.

Losses got intensified during second half of the session, 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. Domestic sentiments remained downbeat, after credit rating agency, Ind-Ra report stated 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.

On the global front, European markets were trading in green terrain, as German economic confidence strengthened significantly at the start of the year to the highest level since 2015, as the signing of the Phase 1 deal between the US and China eased trade tensions. Asian markets ended mostly higher, after Malaysia's central bank unexpectedly reduced its interest rate as policymakers said it as a pre-emptive measure to secure growth amid price stability. The Monetary Policy Committee of Bank Negara Malaysia decided to reduce the overnight policy rate by 25 basis points to 2.75 percent.

Back home, the realty sector stocks ended in red terrain, amid a private report stating that housing sales fell 9 per cent during October-December across nine cities to 60,453 units due to economic slowdown and liquidity crisis. Further, stocks related to the auto industry also settled on lower note, after automobile dealers' body Federation of Automobile Dealers Associations (FADA) said retail sales of passenger vehicles (PV) dropped around 9 percent to 2,15,716 units in December 2019, as compared to sales of 2,36,586 units in December 2018, as even the best offers failed to lift weak consumer sentiments.

Finally, the BSE Sensex lost 208.43 points or 0.50% to 41,115.38, while the CNX Nifty was down by 62.95 points or 0.52% to 12,106.90.

The BSE Sensex touched high and low of 41532.29 and 41059.04, respectively and there were 09 stocks advancing against 21 stocks declining.

The broader indices ended in red; the BSE Mid cap index fell 0.32%, while Small cap index was down by 0.13%.

The few gaining sectoral indices on the BSE were IT up by 1.09%, TECK up by 1.06% and Telecom up by 0.24%, while Metal down by 1.57%, Oil & Gas down by 1.49%, Power down by 1.45%, PSU down by 1.37%, Utilities down by 1.25% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 1.86%, TCS up by 1.61%, Infosys up by 1.06%, HCL Tech. up by 1.02% and SBI up by 0.78%. On the flip side, ONGC down by 5.13%, NTPC down by 4.27%, Kotak Mahindra Bank down by 2.46%, Maruti Suzuki down by 2.28% and HDFC down by 1.92% were the top losers.

Meanwhile, in order to advise the Centre on measures needed to build a strong ecosystem for nurturing innovation and start-ups in the country, the government has set up a National Startup Advisory Council, which will help to drive sustainable economic growth and generate large scale employment opportunities.

The Council will suggest measures to foster a culture of innovation amongst citizens and students in particular, promote innovation in all sectors of economy across the country, including semi-urban and rural areas, support creative and innovative ideas through incubation and research and development to transform them into valuable products, processes or solutions to improve productivity and efficiency and create an environment of absorption of innovation in industry.

Besides, it will also suggest measures to facilitate public organizations to assimilate innovation with a view to improving public service delivery, promote creation, protection and commercialization of intellectual property rights, make it easier to start, operate, grow and exit businesses by reducing regulatory compliances and costs, promote ease of access to capital for startups, incentivize domestic capital for investments into startups, mobilize global capital for investments in Indian startups, keep control of startups with original promoters and provide access to global markets for Indian startups.

The CNX Nifty traded in a range of 12,225.05 and 12,087.90. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.89%, Grasim Industries up by 2.64%, Nestle up by 1.84%, TCS up by 1.78% and Adani Ports up by 1.07%. On the flip side, ONGC down by 5.25%, Coal India down by 5.24%, NTPC down by 3.97%, Tata Motors down by 3.03% and UPL down by 2.99% were the top losers.

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.