Markets face rough ride on Thursday; Sensex loses over 100 points

Indian equity benchmarks faced rough ride on Thursday’s trading session, with Sensex and Nifty ending lower by around 0.25% each. After a cautious opening, key indices remained lackluster throughout the day, as India's factory output growth, measured in terms of Index of Industrial Production (IIP), contracted by 0.3% in December 2019 as compared to expansion of 2.5% in December 2018, mainly on account of a decline in manufacturing sector output. Adding more worries among traders, India’s retail inflation based on Consumer Price Index (CPI) jumped to 7.59% in January 2020. The CPI was 1.97% in January 2019 and 7.35% in December 2019.

Weak trade continued over the Dalal Street in the second half of the trading session, on the back of 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. Market participants paid no heed towards 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.

On the global front, European markets were trading in red, as Germany's consumer price inflation hit a six-month high at the start of the year, driven by a jump in energy prices. The final figures from Destatis showed that the consumer price index rose 1.7 percent year-on-year following a 1.5 percent increase in December. Asian markets ended mostly lower, after producer prices in Japan were up 0.2 percent on month in January. That exceeded expectations for a flat reading following the 0.1 percent increase in December. On a yearly basis, producer prices jumped 1.7 percent - again beating forecasts for 1.5 percent and up sharply from 0.9 percent in the previous month.

Back home, the realty sector stocks ended in negative territory, despite a private report stating that private equity (PE) investment in the real estate sector rose 3 per cent to Rs 43,704 crore during the last calendar year on increased interest of foreign investors in commercial properties. Further, stocks related to the insurance industry remained in limelight, after 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.

Finally, the BSE Sensex lost 106.11 points or 0.26% to 41459.79, while the CNX Nifty was down by 26.55 points or 0.22% to 12174.65.

The BSE Sensex touched high and low of 41709.30 and 41338.31, respectively and there were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.01%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.06%, Consumer Durables up by 0.95%, IT up by 0.88%, TECK up by 0.81% and FMCG up by 0.07%, while Bankex down by 0.94%, Oil & Gas down by 0.64%, Utilities down by 0.64%, Metal down by 0.62% and Realty down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were Titan up by 2.37%, SBI up by 2.33%, Infosys up by 1.45%, Sun Pharma up by 1.12% and Tech Mahindra up by 0.98%. On the flip side, Indusind Bank down by 3.68%, NTPC down by 1.71%, Tata Steel down by 1.57%, ICICI Bank down by 1.51% and Kotak Mahindra Bank down by 1.44% were the top losers.

Meanwhile, with a view to increase its scope to cover litigations pending in various debt recovery tribunals (DRTs), the Union Cabinet has given green signal to changes in the 'Direct Tax Vivad se Vishwas Bill, 2020'. The Bill was introduced in the Lok Sabha earlier this month with the aim of reducing litigations related to direct taxes.

It was proposed to cover tax disputes pending at the level of commissioner (appeals), Income Tax Appellate Tribunals (ITAT), high courts and the Supreme Court. Union minister Prakash Javadekar has said it has been decided to cover disputes pending in DRTs also. He said that cases involving over Rs 9 trillion of direct taxes are pending in various forums.

The minister hoped that people will take advantage of the scheme to settle the tax disputes before March 31, 2020 as 10 per cent more will be charged for settlement of disputes after the end of the current financial year. Meanwhile, the Cabinet also approved capital infusion of Rs 2,500 crore into three state-owned general insurance companies. These three companies are National Insurance Co, Oriental Insurance Co and United India Insurance Company.

The CNX Nifty traded in a range of 12,225.65 and 12,139.80. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 6.39%, Dr. Reddy's Lab up by 3.95%, Zee Entertainment up by 2.56%, SBI up by 2.28% and Titan up by 2.25 %. On the flip side, Indusind Bank down by 3.57%, 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.

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.