Weak trade continues on Dalal Street

Indian equity benchmarks continued to show a sluggish trend in morning session, with losses of over half a percent each. After making a negative start, markets added losses to continue their weak trade. Selling was broad based with both mid cap and small cap indices were trading down by over 0.80%. Tata Steel, Indusind Bank, Maruti Suzuki and Hero MotoCorp were the prime losers among heavy-weights, pushing the Sensex lower. Sentiments remained down-beat with report that investments in the Indian capital market through participatory notes (P-notes) continue to decline and hit a nearly 11-year low of Rs 64,537 crore till the end of December 2019. Traders remained pessimistic, as International Monetary Fund (IMF) stated that the goods and services tax (GST) collections in India have been below potential. The organisation said that multiple rates along with exemptions and implementation challenges have affected the GST collections in India. Meanwhile, the Commerce and Industry Minister Piyush Goyal has asked the industry to look for ways to expand the country’s export basket by adding more value-added products and cut shipments of raw materials. He said the country’s export basket is changing but it is not changing at fast pace.

Weak global cues also dampened the sentiments with most of the Asian markets were trading in red as the new coronavirus outbreak continued to roil companies amid expectations it would cause a slowdown. Back home, on the sectoral front, steel sector companies were in focus, as Union Minister Dharmendra Pradhan stated that the impact of Coronavirus outbreak will be felt on global steel industry for at least two to three years, as China is the largest producer of the alloy.

The BSE Sensex is currently trading at 40774.17, down by 281.52 points or 0.69% after trading in a range of 40763.66 and 41042.46. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.83%, while Small cap index was down by 0.98%.

The only gaining sectoral indices on the BSE were Consumer Durables was up by 0.01%, while Metal down by 1.89%, Power down by 1.50%, Auto down by 1.46%, Basic Materials down by 1.40% and Industrials was down by 1.22% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 0.35%, TCS up by 0.18%, Titan Company up by 0.06% and Kotak Mahindra Bank up by 0.02%. On the flip side, Indusind Bank down by 4.13%, Tata Steel down by 2.39%, Maruti Suzuki down by 1.82%, Hero MotoCorp down by 1.72% and NTPC down by 1.68% were the top losers.

Meanwhile, asking domestic steel makers to step up production in the aftermath of coronavirus outbreak, Union minister Dharmendra Pradhan has said India should target a larger global market share as the impact of the coronavirus will be felt on global steel industry for at least two to three years. India is the second largest global producer of steel with an annual output of over 106 million tonne (MT), but lags much behind China that accounted for 928.3 MT of the alloy in 2018.

He further asserted ‘When some markets in the globe face pressure, its positive reflection is felt in some other markets. This is an automatic (natural) law. India occupies number two slot in steel production. From capital goods to finished products - how can we derive benefit - we are holding talks with stakeholders.’ He mentioned that a strategy paper was being prepared for producing 10 million tonnes of special steel at a cost of Rs 50,000 crore with 50,000 employment potential in the present scenario.

Besides, Pradhan also said Prime Minister Narendra Modi has offered a helping hand to China to fight the deadly virus. He urged players - both large and small - including the startups to come forward for production of special steel and check its import, as countries like Japan and Korea where exporting finished goods to India after adding value to raw material imported from India.

The CNX Nifty is currently trading at 11958.65, down by 87.15 points or 0.72% after trading in a range of 11951.25 and 12030.75. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 0.90%, GAIL India up by 0.47%, Cipla up by 0.46%, Tech Mahindra up by 0.27% and Titan Company up by 0.14%. On the flip side, Yes Bank down by 6.19%, Indusind Bank down by 4.10%, Bharti Infratel down by 3.53%, Tata Motors down by 2.78% and Tata Steel down by 2.39% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 445.59 points or 1.59% to 27,514.01, Nikkei 225 slipped 344.37 points or 1.46% to 23,178.87, Taiwan Weighted dropped 116.06 points or 0.99% to 11,647.45, KOSPI fell 30.14 points or 1.34% to 2,212.03, Straits Times trembled 18.10 points or 0.56% to 3,194.90 and Shanghai Composite declined 11.60 points or 0.39% to 2,972.02. On the flip side, Jakarta Composite was up by 28.92 points or 0.49% to 5,896.44.