Post Session: Quick Review

Indian equity benchmarks recovered from day’s low points, but failed to erase all the losses and ended in red terrain on Thursday, following negative cues from global equities. The market indices snapped a two-session gaining run, with Sensex and Nifty slipping below their crucial 41,500 and 12,200 levels, respectively. Key bourses made pessimistic start, weighed down by disappointing macroeconomic data. India's retail inflation based on Consumer Price Index (CPI) spiked to 7.59 per cent for the month of January 2020 from 7.35 per cent in December 2019, due to costlier food products like vegetables, pulses and protein-rich items. Industrial production contracted by 0.3 per cent in December 2019 as against 2.5 per cent growth in same month a year ago, weighed by a decline in the manufacturing sector. Markets added losses and were hovering near the intraday low points in afternoon session, as traders remained cautious with Finance Minister Nirmala Sitharaman’s statement that Goods and Services Tax (GST) compensation to states is delayed due to inadequate realisation of cess and that the Centre was not according any differential treatment to states.

However, in late trade, the markets managed to trim most of their initial losses, as traders found some solace with Chief Economic Advisor Krishnamurthy Subramanian’s statement that the coronavirus outbreak in China provides an opportunity for India to expand exports. India is one of China's leading trade partners in Asia and has a huge trade deficit with that country. Traders also took a note of Union Minister Nitin Gadkari’s statement that the government is targeting khadi and village industries to boost job creation in the rural and tribal areas and improve purchasing power of people. He said ‘Our focus is on village industries including honey, kulhads, bamboo, fishing, bio-fuels towards employment generation in the agriculture, rural and tribal sectors and to enhance their purchasing power through favourable policies.

On the global front, Asian markets ended mostly lower on Thursday, while European markets were trading in red, after a dramatic spike in the number of coronavirus deaths and cases in mainland China, with traders concerned about the scale of the epidemic. Back home, Insurance related stocks were in limelight as the Cabinet approved the proposal for capital infusion and immediate release of Rs 2,500 crore for three public sector general insurance companies in the light of the critical financial position and breach of regulatory solvency requirements. IT sector stocks were in focus after Industry body Nasscom has projected revenue growth of 7.7 percent at $191 billion for the IT sector in the ongoing fiscal (FY20).

The BSE Sensex ended at 41471.20, down by 94.70 points or 0.23% after trading in a range of 41338.31 and 41709.30. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.04%, while Small cap index was up by 0.05%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.04%, IT up by 0.98%, TECK up by 0.95%, Consumer Durables up by 0.91% and Telecom up by 0.38%, while Bankex down by 0.97%, Utilities down by 0.70%, Oil & Gas down by 0.68%, Metal down by 0.64% and Realty down by 0.50% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Titan Company up by 2.34%, SBI up by 2.31%, Infosys up by 1.61%, Sun Pharma up by 1.07% and Tech Mahindra up by 1.05%. (Provisional)

On the flip side, Indusind Bank down by 3.59%, ICICI Bank down by 1.67%, NTPC down by 1.59%, Tata Steel down by 1.56% and Kotak Mahindra Bank down by 1.48% were the top losers. (Provisional)

Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said that the coronavirus outbreak in China provides an opportunity for India to expand exports and follow an export-driven model. He mentioned ‘it is very hard to say how this will manifest in terms of India's trade relations with China. If we go by the experience of SARS (outbreak), India was not affected that much.’ India is one of China's leading trade partners in Asia and has a huge trade deficit with that country.

He said China imports a lot of components, parts, assembles and integrates and then exports them. India has been following the same pattern in terms of mobile manufacturing in the country. So, if one looks from this perspective, it provides a good opportunity for India.

Besides, talking about GDP, Subramanian said the economic survey has projected it to be in the range of 6-6.5 per cent in the next fiscal. This has been done by collating many pieces of evidence using business cycles which prevailed in India. He added the Union Budget has laid emphasis on rural consumption and capital expenditure.  He further said ‘in any economy, you don't get growth rates that are constant. We need the average to be in that range’.

The CNX Nifty ended at 12166.90, down by 34.30 points or 0.28% after trading in a range of 12139.80 and 12225.65. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 6.53%, Dr. Reddys Lab up by 3.95%, Zee Entertainment up by 2.56%, SBI up by 2.31% and Titan Co up by 2.25%. (Provisional)

On the flip side, Indusind Bank down by 3.55%, Tata Steel down by 1.77%, NTPC down by 1.71%, ICICI Bank down by 1.68% and Kotak Mahindra Bank down by 1.48% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 87.07 points or 1.16% to 7,447.30, France’s CAC fell 33.28 points or 0.55% to 6,071.45 and Germany’s DAX was down by 94.74 points or 0.69% to 13,655.04.

Asian markets ended mostly lower on Thursday as China's official death toll from the new corona virus spiked dramatically after authorities changed their counting methods, fuelling concern the epidemic is far worse than being reported. Health officials in China's hard-hit central province of Hubei reported that 242 more people died from the corona virus as of Wednesday - the highest in a single day and more than twice the previous record high - pushing the death toll across the country to 1,355. There was also a huge increase in the number of cases, with 14,840 people diagnosed with the virus. Further, Japanese shares ended lower as the safe-haven yen firmed against the dollar.