Post Session: Quick Review

Indian equity benchmarks traded choppy throughout the day and ended with cut of around half a percent amid continued fears about the outbreak of the deadly coronavirus in China. Markets made a slightly positive start, as some support came with a report that the government is planning to raise at least Rs 10,000 crore through the seventh tranche of CPSE ETF which will open for anchor investors on Thursday. Some positivism also came in with a private report indicating that Finance Minister Nirmala Sitharaman's first full year Budget is expected to provide short-term stimulants to boost consumer demand, and such measures will get a positive response from markets. Meanwhile, India pressed its largest LNG supplier Qatar to lower the price of gas under the existing long-term supply contracts, a request that Doha turned down saying sanctity of contracts is important for the credibility of both sides.

However, markets wiped out all of their gains to turn negative in the afternoon trade, as investors turned anxious with Nobel laureate and economist Abhijit Banerjee’s statement that the country could be passing through a phase of recession, and there is ‘nothing in the data’ that suggests otherwise. He added that the priority of the government should be on refinancing the banking sector, which is in ‘doldrums’. Traders also took note of a report that foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 438.85 crore on January 27.

On the global front, Asian markets ended in red, as investors sought bargains after selloff on concerns over the coronavirus outbreak in China. European stocks rose slightly, after suffering their worst single-day loss in about four months the previous day on growing concerns over the economic impact of the deadly coronavirus outbreak in China. Back home, Steel sector stocks remained in limelight as India's crude steel output increased marginally by 1.8 percent to 111.2 million tonnes (MT) in 2019, according to World Steel Association. The country's crude steel production was at 109.3 MT in 2018.

The BSE Sensex ended at 40953.79, down by 201.33 points or 0.49% after trading in a range of 40869.75 and 41333.25. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.57%, while Small cap index down by 0.23%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.20%, Oil & Gas up by 0.19% and Realty was up by 0.02%, while Telecom down by 4.57%, Metal down by 2.77%, Energy down by 1.61%, Auto down by 1.23% and Basic Materials was down by 1.22% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC up by 1.41%, Sun Pharma up by 1.04%, Bajaj Finance up by 1.02%, HDFC Bank up by 0.75% and TCS was up by 0.68%. (Provisional)

On the flip side, Bharti Airtel down by 4.96%, Tata Steel down by 3.97%, Reliance Industries down by 2.27%, Maruti Suzuki down by 2.12% and Titan Company was down by 1.74% were the top losers. (Provisional)

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that the margins of cotton textiles are expected to improve in the coming period. It expects cotton prices to soften till March 2020 due to better yield leading to higher productivity of cotton in the current season. It highlighted that cotton prices had dropped in November 2019 however, December 2019 marked the beginning of an upward movement in prices by 2-3 percent year-on-year.

According to the report, while the arrival of cotton during first quarter of the current season (October to September) as expected by the Cotton Corporation of India (CCI) will improve by 8.5 percent, the impact on actual prices is not visible. It said the CCI has maintained its forecast for cotton production at 35.4 million bales during the current season. Further, it said the yield per hectare is expected to improve by more than 6 per cent over the previous season due to higher acreage and better monsoon.

The report has stated that the demand for fabric exports has contracted owing to weak market sentiments and increased competition from southeast Asian countries. Fabric exports fell 12 percent year-on-year in November and improved 12 percent year-on-year. It pointed out that crude oil prices could remain volatile in the short-run owing to geopolitical tensions and production cuts by OPEC, which impacts the man-made textile margins. Besides, it said man-made fibres saw the third consecutive month of low volatility until November of raw material prices on the back of stable crude oil prices, which has helped the segment maintain stable EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins and improve credit metrics.

The CNX Nifty ended at 12059.60, down by 59.40 points or 0.49% after trading in a range of 12024.50 and 12163.55. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 2.65%, HDFC up by 1.40%, Bajaj Finance up by 1.14%, Sun Pharma up by 1.12% and HDFC Bank was up by 0.95%. (Provisional)

On the flip side, Bharti Airtel down by 4.36%, Vedanta down by 4.33%, Tata Motors down by 3.32%, Tata Steel down by 3.07% and JSW Steel was down by 2.68% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 12.89 points or 0.17% to 7,424.94 and France’s CAC was up by 2.81 points or 0.05% to 5,865.83. On the other hand, Germany’s DAX was down by 3.58 points or 0.03% to 13,201.19.

Asian markets ended lower on Tuesday on growing concerns about a hit to global economic growth after Chinese health authorities reported 24 more deaths from corona virus epidemic, taking the number of fatalities to 106 as the confirmed cases of pneumonia caused by the outbreak stand at 4,515. The virus has now spread to more than ten countries, including the US, France, Australia and Canada. Seoul shares ended lower amid worries that the corona virus outbreak will have a significant impact on China's GDP this quarter. In an effort to curb the outbreak, China has extended the Lunar New Year holiday to 2 February from the original 30 January date to reduce travel. Authorities have also locked down cities with a combined 40 million people around Wuhan, as they race to contain the virus. The US consulate in Wuhan plans to evacuate some Americans in a charter flight, while France and Japan have also said they plan to repatriate citizens. Global corporations are also stepping up their response in an effort to protect workers. Markets in China, Hong Kong and Taiwan were closed for the Lunar New Year holidays.