Markets extend previous session’s losing streak with negative start

Indian equity benchmarks extended their previous session’s losing streak with negative start on Tuesday, in line with Asian peers. Markets were trading lower with cut of over 0.60% each in early deals, amid rising coronavirus threats. Some cautiousness came in with Care Ratings’ report that performance of companies during the quarter ended December of the financial year 2019-20 was weak with contraction in revenue and moderation in the growth rate of net profits. Traders were also concerned with a report that the International Monetary Fund (IMF) has stated that the goods and services tax (GST) collections in India have been below potential. Adding more concern, investments in the capital market through participatory notes (P-notes) continued to decline and hit a nearly 11-year low of Rs 64,537 crore at the end of December 2019. Though, downside remained capped as a US-based think tank World Population Review in its report said that India emerged as the world's fifth largest economy by overtaking the UK and France in 2019. It added that India is developing into an open-market economy from its previous autarkic policies.

Global cues also remained subdued with most of the Asian markets were trading lower in the absence of fresh cues from Wall Street, which was closed overnight for a public holiday, and as tech giant Apple warned it does not expect to achieve its revenue forecast for the March quarter due to disruptions in China from the coronavirus.

Back home, Reserve Bank Governor Shaktikanta Das has said that on the back of countercyclical measures undertaken by the government, structural reforms need to be continued to revive demand and support the economy. In stock specific developments, Vodafone Idea lost around 10% on concerns that it may be heading for liquidation. Reliance Industries remained in focus after it announced consolidation of its all media and distribution businesses under one umbrella brand. However, JSW Energy gained around 6% after it entered an agreement to buy GMR Energy's 1,050 mw-Kamalanga power project located in Odisha.

The BSE Sensex is currently trading at 40792.79, down by 262.90 points or 0.64% after trading in a range of 40786.66 and 41042.46. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.67%, while Small cap index was down by 0.58%.

The top losing sectoral indices on the BSE were Metal down by 1.83%, Power down by 1.57%, Auto down by 1.20%, Basic Materials down by 1.15% and Industrials was down by 1.13%, while there were no gainers on the BSE sectoral front.

The sole gainer on the Sensex was Bharti Airtel up by 0.27%. On the flip side, Indusind Bank down by 4.11%, Tata Steel down by 2.22%, Hero MotoCorp down by 1.81%, Maruti Suzuki down by 1.49% and Bajaj Finance down by 1.32% were the top losers.

Meanwhile, a US-based think tank World Population Review in its report has said that India emerged as the world's fifth largest economy by overtaking the UK and France in 2019. It added that India is developing into an open-market economy from its previous autarkic policies. As per the report, India's economy is the fifth largest in the world with a Gross Domestic Product (GDP) of $2.94 trillion, overtaking the UK and France in 2019 to take the fifth spot. The size of the UK economy is $2.83 trillion and that of France is $2.71 trillion.

The report further said that in purchasing power parity (PPP) terms, India's GDP (PPP) is $10.51 trillion, exceeding that of Japan and Germany. Due to India's high population, India's GDP per capita is $2,170 (for comparison, the US is $62,794). However, report mentioned that India's real GDP growth is expected to weaken for the third straight year to 5% from 7.5%.

The report observed that India's economic liberalisation began in the early 1990s and included industrial deregulation, reduced control on foreign trade and investment, and privatisation of state-owned enterprises. These measures have helped India accelerate economic growth. It said India's service sector is the fast-growing sector in the world accounting for 60% of the economy and 28 per of employment, and added that manufacturing and agriculture are two other significant sectors of the economy.

The CNX Nifty is currently trading at 11962.20, down by 83.60 points or 0.69% after trading in a range of 11958.95 and 12030.75. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.11%, GAIL India up by 0.47%, Bharti Airtel up by 0.33% and Cipla up by 0.08%. On the flip side, Yes Bank down by 5.79%, Indusind Bank down by 4.22%, Vedanta down by 2.39%, Bharti Infratel down by 2.32% and Tata Motors down by 2.31% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 378.41 points or 1.35% to 27,581.19, Nikkei 225 slipped 371.79 points or 1.58% to 23,151.45, Taiwan Weighted dropped 86.61 points or 0.74% to 11,676.90, KOSPI fell 33.24 points or 1.48% to 2,208.93, Straits Times trembled 17.90 points or 0.56% to 3,195.10 and Shanghai Composite declined 11.60 points or 0.39% to 2,972.02. On the flip side, Jakarta Composite was up by 23.57 points or 0.4% to 5,891.09.