Indian equities add losses amid weak global cues

Indian equities added losses to continue weak trade in afternoon session, monitoring subdued Asian marketplace. Sentiments' on the street weakened further with RBI’s Consumer Confidence Survey released stating that the consumer confidence dropped further in January 2020 as against the last round. However, the future expectations index remained positive, implying an improvement in the last survey. Some anxiety also came with ICRA report 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. Meanwhile, Prime Minister Narendra Modi underlined the need for working together to make India a $5 trillion economy, while stressing that the government has been able to maintain macro-economic stability amid tough global environment. On the sectoral front, auto stocks remained in limelight 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.

On the global front, Asian markets were trading mostly in red, following three sessions of broad gains, as investors waited for the release of China’s January trade numbers. Back home, the BSE Sensex is currently trading at 41102.90, down by 203.13 points or 0.49% after trading in a range of 41100.97 and 41394.41. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.06%, Utilities up by 0.32%, IT up by 0.31%, Basic Materials up by 0.29% and Power up by 0.27%, while Energy down by 1.41%, Realty down by 1.40%, Auto down by 1.10%, Telecom down by 1.03% and Capital Goods down by 1.02% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.86%, Sun Pharma up by 1.61%, Hero MotoCorp up by 1.50%, Ultratech Cement up by 1.07% and Axis Bank was up by 0.69%. On the flip side, Indusind Bank down by 2.26%, Reliance Industries down by 1.77%, Kotak Mahindra Bank down by 1.42%, Power Grid was down by 1.35% and Larsen & Toubro down by 1.32% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the proposal of long-term repos to the tune of Rs 1 lakh crore are aimed at helping banks lower their lending rates, thus quickening the monetary policy transmission. At the sixth bi-monthly policy announcement, where the policy rates were left unchanged, the RBI announced long-term repurchase agreements (repos) of one-year and three-year tenors of appropriate sizes, totalling Rs 1 lakh crore at the policy repo rate, from the fortnight beginning on February 15. 

Das said it can be noted that the longest repo that the RBI has so far done is of 56 days, while most of its either overnight or for a fortnight. And given this, the one-year and three-year repos are a new beginning for the monetary authority's effort to contain cost of money. He also said ‘it is an effort to ensure better monetary policy transmission because we are giving the funds at the policy rate. We want to inject Rs 1 lakh crore into the banking system that will enable banks to reduce their lending rates.’

The governor further said it can be noted that given the very tepid demand for fresh loans, the banking system is flushed with over Rs 2.5 lakh in surplus liquidity. Average credit growth till the last fortnight of January was a low 7.21 per cent. He added that the process of monetary policy transmission quickens when the banks get cheaper funds. 

The CNX Nifty is currently trading at 12082.90, down by 55.05 points or 0.45% after trading in a range of 12082.20 and 12154.70. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.99%, NTPC up by 2.95%, UPL up by 2.37%, Yes Bank up by 2.08% and Sun Pharma was up by 1.64%. On the flip side, Tata Motors down by 2.82%, Eicher Motors down by 2.71%, Indusind Bank down by 2.19%, Reliance Industries down by 1.77% and Kotak Mahindra Bank was down by 1.44% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 179.34 points or 0.65% to 27,314.36, Taiwan Weighted dropped 136.87 points or 1.16% to 11,612.81, Nikkei 225 slipped 45.61 points or 0.19% to 23,827.98, Straits Times trembled 43.66 points or 1.35% to 3,187.89, KOSPI fell 15.99 points or 0.72% to 2,211.95 and Shanghai Composite was down by 2.59 points or 0.09% to 2,863.92.

On the flip side, Jakarta Composite was up by 9.14 points or 0.15% to 5,996.29.