Indian equities extend losses in morning session

Indian equities added losses to continue their weak trade in the morning session, hovering near the lowest point of the day, on account of selling in frontline counters such as Mahindra & Mahindra, Tata Steel and Britannia Industries. After opening in red territory, markets extended their losses. Broader indices, BSE Mid cap and Small cap were too crumbling under pressure. Traders remained concerned with rating agency Icra’s statement that the GST compensation fund may see a shortfall of Rs 15,000-25,000 crore for 2019-20, and it pegged the unpaid GST compensation to the states at Rs 60,000-70,000 crore for the October 2019-January 2020 period. Investors got wary with the Reserve Bank data showing foreign borrowings of Indian companies fell over 45% to $2.09 billion in December 2019 as compared to the year-ago period. Indian firms had raised $3.81 billion in December 2018, which included $37 million through issuance of masala bonds.

Weak global cues also dampened the sentiments with all the Asian markets were trading lower after China reported an uptick in new cases of its virus outbreak and analysts warned optimism the disease is under control might be premature. Back home, on the sectoral front, pharma companies’ shares were trading lower despite report that total foreign direct investment in the drugs and pharmaceutical sector in the country rose to Rs 2,065 crore during April to September period of fiscal year 2019-20. Infrastructure stocks remained in focus with report that as many as 400 infrastructure projects, each worth Rs 150 crore or more, have been hit by total cost overruns of over Rs 4 lakh crore owing to delays and other reasons.

The BSE Sensex is currently trading at 40828.77, down by 313.08 points or 0.76% after trading in a range of 40818.14 and 41172.06. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.77%, while Small cap index was down by 0.45%.

The top losing sectoral indices on the BSE were Metal down by 2.55%, Auto down by 1.78%, Realty down by 1.45%, Consumer Durables down by 1.41% and Consumer Discretionary was down by 1.29%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Hindustan Unilever up by 0.34%, Bajaj Finance up by 0.27% and ICICI Bank up by 0.15%. On the flip side, Mahindra & Mahindra down by 4.89%, Tata Steel down by 4.34%, ONGC down by 2.20%, Indusind Bank down by 1.68% and Sun Pharma Industries down by 1.58% were the top losers.

Meanwhile, Minister of State for Shipping and Chemicals & Fertilizers Mansukh Mandaviya has said that total foreign direct investment (FDI) in the drugs and pharmaceutical sector in the country rose to Rs 2,065 crore during first half of current financial year (April to September period of FY20). He highlighted that the FDI equity inflow in the drugs and pharmaceutical sector stood at Rs 1,842 crore in FY19.  FDI in the sector was at Rs 6,502 crore in FY18, Rs 5,723 crore in FY17, Rs 4,975 crore in FY16 and Rs 9,052 crore in FY15.

To attract larger FDI in the pharmaceutical sector, Mandaviya said the government reviews FDI policy on an ongoing basis with a view to liberalise and simplify it progressively and improve the country's investment climate by providing ease of doing business. Also, he said various measures are taken under Make in India initiatives facilitating investment, fostering innovation and thereby promoting robust business environment in the country.

Further, he mentioned that the government amended the FDI policy on pharmaceutical sector in June 2016 by allowing 100 per cent FDI for greenfield pharmaceutical projects and up to 74 per cent FDI for brownfield pharmaceutical projects through the automatic route and beyond that through government's approval. Besides, he stated the drugs and pharmaceuticals sector is witnessing an era of unparalleled growth and innovation. Drugs and pharmaceuticals are India's largest sectors- both in terms of revenue and employment.

The CNX Nifty is currently trading at 11995.90, down by 102.45 points or 0.85% after trading in a range of 11993.40 and 12103.55. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.76%, Bharti Infratel up by 0.59%, Hindustan Unilever up by 0.32%, Bajaj Finance up by 0.21% and BPCL up by 0.16%. On the flip side, Zee Entertainment down by 6.17%, Mahindra & Mahindra down by 4.96%, Tata Steel down by 4.32%, Britannia Industries down by 3.05% and Vedanta down by 2.77% were the top losers.

All Asian markets are trading lower; Hang Seng decreased 235.38 points or 0.86% to 27,168.89, Nikkei 225 slipped 146.78 points or 0.62% to 23,681.20, Taiwan Weighted dropped 49.94 points or 0.43% to 11,562.87, Jakarta Composite lost 42.27 points or 0.7% to 5,957.34, KOSPI fell 18.26 points or 0.83% to 2,193.69, Straits Times trembled 17.86 points or 0.56% to 3,163.62 and Shanghai Composite was down by 11.33 points or 0.39% to 2,864.63.