Weakness persists in Indian markets

Mirroring weak global cues, Indian equity benchmarks continued to show a sluggish trend in morning session, both Sensex and Nifty were trading below their crucial 41500 and 12175 marks, respectively. After making pessimistic start, markets extended their losses. Weak broader indices along with sell off at Axis Bank, Kotak Mahindra Bank, Coal India and JSW Steel counters dragged the markets lower. Sentiments remain dampened with 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. Inflation in January is well above the Reserve Bank of India's (RBI) medium-term target of 4 per cent for the fourth straight month. Traders failed to get some relief with 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. Meanwhile, Chief Economic Advisor Krishnamurthy Subramanian’s stated 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.

Weak global cues also dented the sentiments with most of the Asian markets are trading in red, as investors mulled over the implications of a surge in the number of coronavirus cases in Hubei, after it deployed a revised methodology. Back on domestic turf, insurance stocks trading lower despite 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.

The BSE Sensex is currently trading at 41410.38, down by 155.52 points or 0.37% after trading in a range of 41402.77 and 41709.30. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.35%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.24%, PSU up by 0.23%, IT up by 0.22%, TECK up by 0.14% and Healthcare was up by 0.12%, while Metal down by 1.16%, Realty down by 0.78%, Bankex down by 0.68%, Utilities down by 0.66% and Telecom was down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.05%, Titan Company up by 2.49%, TCS up by 0.70%, Infosys up by 0.56% and Nestle was up by 0.55%. On the flip side, Axis Bank down by 1.61%, Kotak Mahindra Bank down by 1.50%, HCL Tech down by 1.48%, Maruti Suzuki down by 1.45% and ICICI Bank was down by 1.19% 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 is currently trading at 12154.05, down by 47.15 points or 0.39% after trading in a range of 12151.95 and 12225.65. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.40%, Zee Entertainment up by 3.40%, SBI up by 2.80%, Titan Company up by 2.49% and Dr. Reddys Lab was up by 0.84%. On the flip side, Coal India down by 2.02%, JSW Steel down by 1.62%, Adani Ports &Special down by 1.52%, Kotak Mahindra Bank down by 1.50% and Axis Bank was down by 1.49% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 87.23 points or 0.31% to 27,736.43, Nikkei 225 slipped 48.49 points or 0.2% to 23,812.72, Jakarta Composite lost 39.78 points or 0.67% to 5,873.30, Shanghai Composite declined 15.55 points or 0.53% to 2,911.35, Straits Times trembled 6.14 points or 0.19% to 3,217.23 and KOSPI fell 5.79 points or 0.26% to 2,232.59. On the flip side, Taiwan Weighted was up by 25.64 points or 0.22% to 11,799.83.