Indian markets pause gaining rally on Friday

Indian equity benchmarks paused the gaining rally on the last trading day of the week, with Sensex and Nifty ending lower by around 165 and 40 points respectively. After a negative opening of the trading session, indices remained lackluster for the whole day, as credit rating agency ICRA in its latest report stated that the performance of India Inc. continued to weaken under multiple headwinds during Q3 FY2020. The growth in revenue dipped to the lowest in more than sixteen quarters, due to continued weakness in consumer sentiments, benign commodity prices and general slowdown in the economy.

Losses got intensified over the street in second half of the session, on the back of weak cues from the global markets. Traders remained worried, after RBI’s Consumer Confidence Survey showed that the consumer confidence dropped further in January 2020 as against the last round. However, it said the future expectations index remained positive, implying an improvement in the last survey. Investors paid no heed towards RBI Governor Shaktikanta Das’ statement that the Rs 1-lakh-crore of long-term repos are aimed at helping banks lower their lending rates, thus quickening the monetary policy transmission.

On the global front, European markets were trading in red, as France industrial production declined at the fastest pace in nearly two years in December. The data published by the statistical office Insee revealed that industrial production decreased 2.8 percent on a monthly basis in December, after staying flat in November. Asian markets ended mostly lower, after Malaysia's industrial production grew at a softer pace in December driven by a fall in mining. The data from the Department of Statistics showed that Industrial production climbed 1.3 percent year-on-year in December, after a 2.1 percent increase in November.

Back home, the automobile sector stocks ended lower, even after Union road transport minister Nitin Gadkari said he has requested the finance ministry to support the automobile industry for undertaking research and development of new technologies. He also expressed confidence that India could become the global hub for exports and manufacturing of electric vehicles. Further, the aviation industry stocks remained in focus, with airlines body IATA’s statement that after four years of double-digit growth, the Indian domestic passenger traffic rose by just 5.1 per cent in 2019, down from 18.9 per cent in 2018.

Finally, the BSE Sensex lost 164.18 points or 0.40% to 41141.85, while the CNX Nifty was down by 39.60 points or 0.33% to 12098.35.

The BSE Sensex touched high and low of 41,394.41 and 41,073.36, respectively and there were 12 stocks advancing against 17 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.60%, Consumer Durables up by 1.33%, IT up by 0.65%, Metal up by 0.63% and TECK up by 0.50%, while Realty down by 1.93%, Auto down by 1.06%, Energy down by 0.94%, Telecom down by 0.90% and Capital Goods down by 0.77% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.30%, ONGC up by 1.91%, HCL Tech. up by 1.36%, Hero MotoCorp up by 1.25% and Axis Bank up by 1.21%. On the flip side, Indusind Bank down by 2.69%, Mahindra & Mahindra down by 1.95%, Reliance Industries down by 1.64%, Tata Steel down by 1.46% and Bharti Airtel down by 1.44% were the top losers.

Meanwhile, describing agriculture as the core of India’s developmental goals, Commerce Secretary, Anup Wadhawan has said that the states and union territories should focus on both quantity and quality of agri produce to promote exports of agricultural goods. He emphasized that the best agronomic practices in all the sectors of agriculture must be followed in the State agri export policy (AEP) because quality of India’s agri products should never be compromised.

Besides, Commerce Secretary stressed that the States/ Union Territories (UTs) will have to strengthen their institutional mechanisms for putting in place the AEP and development of clusters. He also said that this is an opportunity for the States/ UTs to formulate a comprehensive plan, covering all key areas of the AEP, across all sectors in agriculture like horticulture, fisheries, animal husbandry, dairying, food processing, floriculture and water shed development.

Wadhawan added that the institutional framework of the AEP must be outcome oriented and all States/ UTs must provide a budget for it. He further said that the AEP must have a decentralised focus that is built up from the cluster level to the district and the state level plan and the policy must link up with all schemes of Government of India across all Ministries and Departments and project the vision for the agriculture sector for the next five years.

The CNX Nifty traded in a range of 12,154.70 and 12,073.95. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 5.51%, NTPC up by 3.21%, Coal India up by 2.78%, ONGC up by 2.00% and UPL up by 1.33%. On the flip side, Eicher Motors down by 3.14%, Tata Motors down by 2.99%, Indusind Bank down by 2.72%, Mahindra & Mahindra down by 1.92% and Grasim Industries down by 1.81% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 43.98 points or 0.59% to 7,460.81, France’s CAC decreased 9.60 points or 0.16% to 6,028.58 and Germany’s DAX decreased 53.97 points or 0.4% to 13,520.85.

Asian markets ended mostly lower on Friday after China's customs bureau said it would delay the release of January's trade data and combine them with February's figures. Meanwhile, investors also awaited key US jobs report for directional cues. Japanese shares ended down as investors booked profit after gains in the previous session following China's decision to halve tariffs on some US imports. Though, Chinese shares ended up despite persistent worries over the global economic impact of the deadly corona virus in China, which has killed over 630 people.