Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in early noon session, amid negative signal from other Asian markets. Stocks from energy, capital goods and realty counters were trading lower, while healthcare, FMCG and basic materials counters were supporting the markets. Domestic sentiments were pessimistic with ICRA’s report that weak consumer sentiment, the slowdown in the infrastructure sector, and benign commodity prices have negatively impacted the performance of companies in Q3FY20. Sentiments also remained downbeat with report that the RBI projected the economy to expand by 6% during the next financial year, pegging it at the lower end of the GDP growth estimate of the Economic Survey.

On the international front, Asian markets are trading mostly in red as China's National Health Commission confirmed the death toll in the country due to coronavirus outbreak has peaked to 636, while the number of people infected has increased to 31,161. Back home, in scrip specific developments, shares of Bharat Electronics gained on inking MoU with RailTel. JSW Steel shined on wining 4th iron ore mine in Odisha auctions.

The BSE Sensex is currently trading at 41185.06, down by 120.97 points or 0.29% after trading in a range of 41155.20 and 41394.41. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.22%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.33%, FMCG up by 0.47%, Basic Materials up by 0.39%, Consumer Durables up by 0.30% and IT was up by 0.23%, while Energy down by 1.00%, Capital Goods down by 0.87%, Realty down by 0.86%, Telecom down by 0.79%, Oil & Gas was down by 0.76% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.14%, Sun Pharma up by 2.09%, Ultratech Cement up by 1.52%, Hero MotoCorp up by 1.37% and HCL Tech was up by 0.90%. On the flip side, Power Grid Corporation down by 1.66%, Indusind Bank down by 1.55%, Kotak Mahindra Bank down by 1.31%, Reliance Industries down by 1.24% and Larsen & Toubro was down by 1.17% were the top losers.

Meanwhile, rating agency ICRA in its latest report has 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. ICRA’s analysis of Q3 FY2020 financial results of listed companies in the Indian corporate sector (excluding financial sector entities) showed aggregate revenues contracting by 0.1 percent on a year-on-year (Y-o-Y) basis.

Rating agency noted that the major impact on revenues came from commodity-linked sectors, revenues from which contracted by 4 percent on a Y-o-Y basis. It also said that during Q3 FY2020, the profitability of India Inc. improved to some extent on a Y-o-Y as well as sequential basis, supported by cost-control initiatives undertaken by companies in the challenging demand environment, coupled with commodity tailwinds. Nevertheless, it continues to be weighed down by the weak demand, high discounting, tepid realizations in commodity sectors, and negative operating leverage.

The report further stated that despite the seasonally strong festive period, automobiles sales contracted by double-digits, while FMCG volumes failed to offer impetus. Additionally, it said tepid realisations driven by benign commodity prices, coupled with subdued volumes in light of the macroeconomic slowdown, resulted in revenue contraction for all major commodity sectors, including oil & gas entities, metals & mining and iron & steel.

The CNX Nifty is currently trading at 12101.30, down by 36.65 points or 0.30% after trading in a range of 12095.95 and 12154.70. There were 23 stocks advancing against 26 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Zee Entertainment up by 3.18%, Sun Pharma up by 2.40%, UPL up by 2.20%, NTPC up by 2.10% and Hindalco was up by 1.60%. On the flip side, Eicher Motors down by 2.46%, Power Grid down by 1.74%, Indusind Bank down by 1.69%, Tata Motors down by 1.45% and Reliance Industries was down by 1.37% were the top losers.

Asian markets were trading mostly in red, KOSPI fell 23.75 points or 1.07% to 2,204.19, Shanghai Composite declined 18.12 points or 0.63% to 2,848.39, Straits Times trembled 37.54 points or 1.16% to 3,194.01, Nikkei 225 slipped 38.60 points or 0.16% to 23,834.99, Taiwan Weighted dropped 152.92 points or 1.3% to 11,596.76 and Hang Seng was down by 212.27 points or 0.77% to 27,281.43. On the other hand, Jakarta Composite was up by 9.14 points or 0.15% to 5,996.29.