Markets remain under pressure; Sensex down by over 300 points

Indian equity benchmarks remained under pressure in late afternoon session, tracking weak opening of European markets. Heavy selling at Telecom, metal and Basic Materials counters kept the markets down, while Indusind Bank performed the worst among major industry leaders on the BSE in noon deals. Domestic sentiments remained pessimistic, as 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. The street paid no heed towards reports that private equity and venture capital investments recorded an all-time high of $48 billion in 2019 in India.

On the global front, European markets were trading in red, 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 were also trading in red, 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 rating agency 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. Ind-Ra expects withdrawal of incentives under the merchandise exports from India scheme (MEIS) to affect export players of made-ups (home textiles) and garments.

The BSE Sensex is currently trading at 40716.76, down by 338.93 points or 0.83% after trading in a range of 40610.95 and 41042.46. There were 4 stocks advancing against 25 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.11%, while Small cap index was down by 0.86%.

The lone gaining sectoral index on the BSE was IT up by 0.53%, while Telecom down by 4.57%, Metal down by 2.19%, Basic Materials down by 1.54%, Power down by 1.50% and Auto down by 1.49% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 0.99%, TCS up by 0.73%, Tech Mahindra up by 0.62%, Bajaj Auto up by 0.27% and Larsen & Toubro up by 0.00%. On the flip side, Indusind Bank down by 3.72%, Bharti Airtel down by 3.48%, ONGC down by 2.35%, Tata Steel down by 2.35% and Maruti Suzuki down by 1.99% were the top losers.

Meanwhile, after a few days of the Union Budget presentation, Union Finance Minister Nirmala Sitharaman has defended the fiscal deficit figures in the 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 inflation management, the minister said except for the seasonal perishable commodities which make up for significant size in the basket, prices of most goods and also particularly food products have been kept well within the acceptable norms.

While talking about banking sector and the question of people losing faith in cooperative banks, Sitharaman said the government had shown concrete action in the latest budget by increasing the deposit insurance from Rs 1 lakh to Rs 5 lakh. She also added that this has not been done for decades and the government has also brought in a bill to amend banking regulation act to include cooperatives.

The CNX Nifty is currently trading at 11941.70, down by 104.10 points or 0.86% after trading in a range of 11908.05 and 12030.75. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.63%, BPCL up by 1.39%, Infosys up by 0.98%, Coal India up by 0.92% and Eicher Motors up by 0.90%. On the flip side, Bharti Infratel down by 10.28%, Yes Bank down by 5.79%, Tata Motors down by 5.26%, Indusind Bank down by 3.69% and Hindalco down by 3.50% were the top losers.

All European markets were trading in red, UK’s FTSE 100 lost 24.11 points or 0.32% to 7,409.14, France’s CAC fell 33.34 points or 0.55% to 6,052.61 and Germany’s DAX was down by 99.33 points or 0.72% to 13,684.56.

Asian markets were trading mostly in red; Hang Seng decreased 370.34 points or 1.32% to 27,589.26, Nikkei 225 slipped 329.44 points or 1.4% to 23,193.80, Taiwan Weighted dropped 114.53 points or 0.97% to 11,648.98, KOSPI fell 33.29 points or 1.48% to 2,208.88, Straits Times trembled 12.49 points or 0.39% to 3,200.51 and Shanghai Composite declined 7.99 points or 0.27% to 2,975.63. On the flip side, Jakarta Composite soared 29.94 points or 0.51% to 5,897.46.