Markets settle off day’s low points on Tuesday

Indian equity bourses settled Tuesday’s trading session off day’s low points. After a lackluster start, bourses remained negative throughout the day, as Care Ratings’ report stated 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. Adding more worries, International Monetary Fund (IMF) said 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.

However, in the last hour of the day, indices managed to trim most of their losses, with a US-based think tank World Population Review report showing that India emerged as the world's fifth largest economy by overtaking the UK and France in 2019. Traders got some support, as Union Finance Minister Nirmala Sitharaman defended the fiscal deficit figures in the union budget and termed it as absolutely realistic. She noted that the government has been absolutely realistic both on the score of revenue generation and on the score of what can spend or borrow, so figures therefore are absolutely realistic keeping in mind the economy.

On the global front, European markets were trading in red terrain, after Bundesbank in its latest monthly report said that Germany's economy is set to remain sluggish in the first quarter of 2020, hurt by weak demand for exports and the supply disruptions caused by the Covid-19 outbreak in China. Asian markets ended in red terrain, as Singapore's non-oil domestic exports decreased in January. The data from Enterprise Singapore showed that non-oil domestic exports dropped 3.3 percent year-on-year in January, after a 2.4 percent rise in December. Electronic NODX declined by 13.0 percent, and non-electronic NODX fell 0.1 percent.

Back home, textile stocks came under pressure, after Ind-Ra revised the outlook on India's textile sector to negative from stable for 2020-21 as weak domestic demand growth, threat of cheap imports and dwindling incentives and exports are likely to keep volumes muted. It expects withdrawal of incentives under the merchandise exports from India scheme to affect export players of made-ups (home textiles) & garments. Metal stocks remained in focus, as Union Minister Dharmendra Pradhan said 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.

Finally, the BSE Sensex lost 161.31 points or 0.39% to 40,894.38, while the CNX Nifty was down by 53.30 points or 0.44% to 11,992.50.

The BSE Sensex touched high and low of 41,042.46 and 40610.95, respectively and there were 09 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.60%, while Small cap index was down by 0.45%.

The top gaining sectoral indices on the BSE were IT up by 0.52%, Oil & Gas up by 0.21%, PSU up by 0.16%, Capital Goods up by 0.12% and Healthcare up by 0.01%, while Telecom down by 4.23%, Metal down by 1.19%, Auto down by 1.08%, Realty down by 0.97% and Basic Materials down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.08%, Infosys up by 1.02%, Power Grid up by 0.82%, Tech Mahindra up by 0.71% and TCS up by 0.55%. On the flip side, Bharti Airtel down by 3.05%, Indusind Bank down by 2.44%, Maruti Suzuki down by 1.92%, Hero MotoCorp down by 1.35% and Tata Steel down by 1.19% were the top losers.

Meanwhile, the share of foreign portfolio investments (FPI) in domestic capital markets 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. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly after going through a due diligence process.

According to the latest data from the Securities and Exchange Board of India (SEBI), the cumulative value of P-note investments in the domestic markets -- equity, debt, and derivatives -- fell to Rs 64,537 crore till December-end from Rs 69,670 crore in November-end. Out of the total investments made till the end of December, Rs 52,486 crore was invested in the equities segment, Rs 11,415 crore in debt and Rs 636 crore in the derivatives market.  A total investment of Rs 76,773 crore was registered at the end of October. This was first gain after a continuous decline since June.

Earlier in September, the Securities and Exchange Board of India (Sebi) simplified KYC requirements and registration process for FPIs. Besides, the regulator broad-based the classification of such investors. Under the new rules, FPIs have been divided into two categories and around 80 percent falls under Category-I and investors planning to set up shop as Category-I is required a simple application form. Earlier, such investors were slotted into three categories -- I, II and III.

The CNX Nifty traded in a range of 12,030.75 and 11,908.05. There were 20 stocks advancing against 29 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Coal India up by 2.92%, Zee Entertainment up by 2.72%, BPCL up by 2.31%, GAIL India up by 1.48% and Adani Ports up by 1.43%. On the flip side, Bharti Infratel down by 11.34%, Yes Bank down by 6.33%, Tata Motors down by 3.87%, IndusInd Bank down by 2.97% and Hindalco down by 2.86% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 33.29 points or 0.45% to 7,399.96, France’s CAC fell 33.31 points or 0.55% to 6,052.64 and Germany’s DAX was down by 106.82 points or 0.77% to 13,677.07.

Bears continued to linger over Asian markets with most of the major indices ending in red terrain after Apple warned the new coronavirus had hit output and demand in China, fueling fears over the wider impact of the epidemic on corporate earnings and economic growth. Singapore’s index Straits Times edged lower by over half a percent as investors remained worried on the government’s decision to cut its economic growth forecast for this year as the virus batters the city state’s tourism and trade. However, Chinese benchmark edged higher as investors have taken some comfort from a slowdown in new infections outside hardest-hit Hubei province, which Chinese officials say is a sign that the outbreak is under control. Further, moves by China’s central bank on Monday to cushion the world’s second-largest economy against the health crisis appear to have done little to ease worries.