Indian markets ended lower for third straight session on Wednesday, dragged down by weakness in banking, metal, oil & gas and power stocks. Today, the markets are likely to get a cautious start following weakness in Asian peers amid economic growth concerns. There will be some concern with report that the largest democracy in the world, India, dropped ten places in the Democracy Index’s global ranking to 51, with an overall score of 6.90 in 2019 from 7.23 in 2018. The primary cause of democratic regression was an erosion of civil liberties in the country. However, some support may come with rating agency Crisil’s statement that it expects a recovery in rural demand in the country from March-April onwards owing to an increase in farm incomes, good monsoons and improving urban demand. Traders may take note of report that in a major relief for small traders with an annual turnover of Rs 5 crore or less, the government has announced the extension of the cut-off date for filing monthly GST returns by up to 4 days. Meanwhile, markets regulator SEBI has notified norms governing portfolio managers, under which the minimum investment limit for investors has been doubled to Rs 50 lakh, and the managers have been directed to increase their net worth to Rs 5 crore within three years. Separately, to streamline the process and reduce the time taken for rights issues by companies, SEBI has cut down the period for advance notice given to stock exchanges to three days from the current seven days. There will be some buzz in the coal stocks with a Central Electricity Authority data showing that coal imports by power producers in the country rose by 17.6 per cent during April-December this fiscal to 52.48 million tonnes compared to 44.64 million tonnes a year ago. Infra stocks will be in focus as the government said that Road Transport and Highways Minister Nitin Gadkari will review road projects worth Rs 3 lakh crore on January 23 and January 24 with a view to fast track highway projects. Besides, a private report indicated that investments in Indian infrastructure increased by around 25 per cent to $ 28.74 billion in 2019, highest since 2016. There will be lots of important earnings announcements too, to keep the markets in action.
The US markets ended mostly higher on Wednesday, as a healthy forecast from IBM helped mitigate worries over the developing coronavirus outbreak. Asian markets were trading mostly in red on Thursday as the death toll rises in China due to a mysterious pneumonia-like virus.
Back home, 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. 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.
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