Key gauges extend losses in early noon trade

Indian equity benchmarks extended losses in early noon session as companies warned of the impact of coronavirus on their businesses. Sentiments remain dampened after Moody's Investors Service has slashed India's Gross Domestic Product (GDP) growth forecast to 5.4 percent for 2020 and 5.8 percent for 2021, down from its previous projections of 6.6 percent and 6.7 percent respectively, on slower than expected economic recovery. Global cues too remained shabby with Asian markets trading mostly in red  amid Apple Inc said it will not meet its revenue guidance for the March quarter as the coronavirus outbreak slowed production and weakened demand in China. Back home, shares of Vodafone Idea continued decline after Care Ratings (CARE) downgraded its ratings on the long-term bank facilities and non-convertible debentures. Shares of various banks edged lower on account of their exposure in telecom sector.

The BSE Sensex is currently trading at 40713.98, down by 341.71 points or 0.83% after trading in a range of 40677.04 and 41042.46. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined by 1.41%, while Small cap index was down by 1.41%.

The top losing sectoral indices on the BSE were Metal down by 2.81%, Telecom down by 2.31%, Power down by 2.11%, Basic Materials down by 2.11% and Auto was down by 1.61%, while there were no gainers on the BSE sectoral front.

The few gainers on the Sensex were Infosys up by 0.09%, Kotak Mahindra Bank up by 0.05% and TCS up by 0.04%. On the flip side, Indusind Bank down by 4.34%, Tata Steel down by 3.40%, NTPC down by 3.22%, Sun Pharma down by 1.99% and Bharti Airtel down by 1.85% were the top losers.

Meanwhile, Moody's Investors Service has slashed India's Gross Domestic Product (GDP) growth forecast to 5.4 percent for 2020 and 5.8 percent for 2021, down from its previous projections of 6.6 percent and 6.7 percent respectively, on slower than expected economic recovery. In its update on Global Macro Outlook, it said India's economy has decelerated rapidly over the last 2 years and economic recovery is likely to be 'shallow'. It added that the reduction in India's growth rate reflects domestic challenges rather than external factors.

Stating that the key to stronger economic momentum would be the revival of domestic demand and bank credit growth, Moody's said the Union Budget 2020 did not contain a significant stimulus to address the demand slump. With a weak economy and depressed credit growth reinforcing each other, it said it is difficult to envision a quick turnaround of either, even if economic deceleration may have troughed. It noted that as similar policies in other countries have shown, tax cuts are unlikely to translate into higher consumer and business spending when risk aversion is high.

The rating agency expects additional easing by the Reserve Bank of India (RBI). However, it said if the recent rise in CPI inflation, mainly as a result of higher food prices, is seen to have second-round effects, this would make it more challenging for the central bank to cut interest rates further. It also stated that resumption of credit growth is equally important as reviving demand, and banks have been reluctant to lend or lower lending rates despite successive rate cuts by the RBI.

The CNX Nifty is currently trading at 11939.00, down by 106.80 points or 0.89% after trading in a range of 11923.35 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 1.34%, GAIL India up by 0.85%, Cipla up by 0.30%, Eicher Motors up by 0.26% and Kotak Mahindra Bank up by 0.17%. On the flip side, Yes Bank down by 7.00%, Bharti Infratel down by 4.70%, Tata Motors down by 4.61%, Indusind Bank down by 4.34% and Tata Steel down by 3.42% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 350.48 points or 1.25% to 27,609.12, Nikkei 225 tumbled 329.44 points or 1.40% to 23,193.80, Taiwan Weighted dropped 114.53 points or 0.97% to 11,648.98, KOSPI fell 34.74 points or 1.55% to 2,207.43, Straits Times slipped 11.13 points or 0.35% to 3,201.87 and Shanghai Composite dipped 3.46 points or 0.12% to 2,980.16. On the flip side, Jakarta Composite was up by 28.92 points or 0.49% to 5,896.44.