Key indices continue to trade lower in afternoon deals

Indian equity benchmarks continued their weak trade in afternoon session, on the back of sustained selling activities by market-participants. Traders remained wary 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. Meanwhile, the government has set up a National Startup Advisory Council to advise the Centre on measures needed to build a strong ecosystem for nurturing innovation and start-ups in the country. On the sectoral front, stocks related to FMCG sector remained in focus with ratings agency Crisil in its latest report stating that the Rs 4-lakh crore FMCG sector is likely to register 9 percent growth in FY20, down 4 percentage points. However, it said an expected recovery in rural demand, coupled with steady urban demand, is set to lift revenue growth of the FMCG industry to 10-11 percent in FY21.

On the global front, Asian markets were trading mostly higher, as China's response to a virus outbreak tempered some fears of a global pandemic. Back home, the BSE Sensex is currently trading at 41178.79, down by 145.02 points or 0.35% after trading in a range of 41174.03 and 41532.29. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.17%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were IT up by 1.21%, TECK up by 0.90%, Healthcare up by 0.51%, Basic Materials up by 0.38% and Realty was up by 0.10%, while Power down by 1.77%, PSU down by 1.48%, Utilities down by 1.40%, Metal down by 1.06% and Auto was down by 1.05% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.55%, HCL Technologies up by 1.31%, Nestle up by 1.27%, TCS up by 1.17% and Ultratech Cement was up by 0.65%. On the flip side, ONGC down by 4.11%, NTPC down by 3.46%, Power Grid down by 2.64%, Maruti Suzuki down by 2.22% and Kotak Mahindra Bank was down by 2.03% were the top losers.

Meanwhile, domestic ratings agency Crisil in its latest report has said that the Rs 4-lakh crore fast moving consumer goods (FMCG) industry is likely to register 9 percent growth in the current financial year (FY20), down 4 percentage points. However, it said an expected recovery in rural demand, coupled with steady urban demand, is set to lift revenue growth of the FMCG industry to 10-11 percent in FY21. It added that better storage levels in reservoirs, which are over 40 percent higher than the year-ago period due to better rains, an 8 percent increase in winter crop output and better visibility for the upcoming seasons will lift the rural consumption.

According to the report, higher spending by the government on rural infrastructure could benefit rural incomes and thereby demand for FMCG products. It said urban areas growth for the FMCG industry is unlikely to improve over the 8 percent level due to a growth in modern retail. However, the growth will not be uniform across companies. Besides, it noted that packaged food segment, which accounts for 50 percent of the industry's revenues will continue to grow at up to 10 percent in FY20 and inch up to 12 percent in next fiscal on a shift to branded products and deeper penetration of product segments.

The report further stated that the personal and home care segment, which accounts for a third of FMCG revenue, is also likely to see recovery in growth to 8-9 percent in FY21 from 6-7 percent in FY20, attributing the slower growth to a focus on discretionary spend-driven products in the segment. It expects the operating profits of companies to remain healthy at up to 20 percent level despite a hit of up to 1.5 percentage points on raw material costs and promotional expenses. It added that the credit profiles of FMCG companies are likely to remain stable, supported by well-capitalised balance sheets.

The CNX Nifty is currently trading at 12120.95, down by 48.90 points or 0.40% after trading in a range of 12119.15 and 12225.05. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 1.88%, Infosys up by 1.45%, Zee Entertainment up by 1.41%, Nestle up by 1.28% and TCS was up by 1.22%. On the flip side, Coal India down by 4.70%, ONGC down by 4.20%, NTPC down by 3.93%, Tata Motors down by 3.13% and Power Grid was down by 2.84% were the top losers.

Asian markets were trading mostly higher; Hang Seng increased 295.19 points or 1.05% to 28,280.52, Nikkei 225 surged 166.79 points or 0.7% to 24,031.35, KOSPI rose 27.56 points or 1.23% to 2,267.25, Shanghai Composite gained 15.09 points or 0.49% to 3,067.23 and Straits Times was up by 6.86 points or 0.21% to 3,254.03.

On the flip side, Jakarta Composite was down by 4.35 points or 0.07% to 6,233.80.