Benchmarks fall around a percent in early deals

Indian equity benchmarks made a gap-down opening on Monday, after a long weekend, amid losses in other Asian peers as the spread of the coronavirus outside China darkened the outlook for world growth. Markets fell around a percent each in early deals, led by selling pressure in Metal, Auto and Basic Materials stocks. Traders were concerned as think tank National Council of Applied Economic Research (NCAER) pegged the India’s economic growth for the current fiscal at 4.9%, a tad down from 5% estimated by the National Statistical Office (NSO). Market participants overlooked the IMF's October World Economic Outlook report showing that India became world's fifth largest economy in 2019 in terms of nominal GDP, leapfrogging France and the UK. Also, staying bullish on the Indian markets, overseas investors have pumped in a net amount of Rs 23,102 crore in February so far driven by positive sentiment around the budget and RBI's decision to maintain an accommodative stance in the latest monetary policy. Besides, Investors are keeping close eye on US President Donald Trump's two-day visit to India.

On the global front, Asian markets, led by South Korea, were trading in red amid worries about a surge in the number of new coronavirus cases reported outside China and its impact on the global economy. On Sunday, South Korea raised its coronavirus alert to the highest level after the number of new coronavirus cases in the country nearly tripled over the weekend to more than 600, while the death toll reached six. Italy and Iran have also confirmed an uptick in coronavirus infections. Meanwhile, the Japanese market is closed for the Emperor's Birthday holiday.

Back home, industry body Assocham said that Indian industry and trade, including pharmaceuticals, are ready to manage the ‘evolving’ coronavirus situation without causing any major impact on the supply chain and no major challenge is foreseen in the near term. In scrip specific development, Bharti Airtel fell after reports that the Finance Ministry is unlikely to give consent to any cut in the license fee and the spectrum usage charges to meet adjusted gross revenue dues. On the other hand, GMR Infrastructure soared after the Competition Commission of India gave approval for the group's proposed 49 percent stake sale in its airport business to France's Groupe ADP.

The BSE Sensex is currently trading at 40769.97, down by 400.15 points or 0.97% after trading in a range of 40673.38 and 41037.01. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.55%, while Small cap index was down by 0.44%.

The only gaining sectoral indices on the BSE were IT up by 0.70% and TECK was up by 0.39%, while Metal down by 3.27%, Auto down by 1.54%, Basic Materials down by 1.27%, Utilities down by 1.18% and Bankex was down by 1.17% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.39%, Sun Pharma Industries up by 0.58%, Tech Mahindra up by 0.53%, TCS up by 0.49% and SBI up by 0.47%. On the flip side, Tata Steel down by 3.82%, HDFC down by 2.12%, ICICI Bank down by 2.03%, ITC down by 2.00% and Maruti Suzuki down by 1.92% were the top losers.

Meanwhile, think tank National Council of Applied Economic Research (NCAER) in its latest report has pegged the India’s economic growth at 4.9 per cent for the current fiscal (FY20). Though, it expects the Indian economy to improve its growth rate to 5.6 per cent in 2020-21 (FY21). Besides, the National Statistical Office (NSO) as well as the Reserve Bank of India (RBI) has projected the GDP growth rate at 5 per cent for the current fiscal. Indian economy grew by 6.1 per cent in 2018-19.

As per the report, Gross Domestic Product (GDP) growth is forecast to be 4.9 per cent in Q3: 2019-20, and 5.1 per cent in Q4: 2019-20. The annual growth rates for 2019-20 and 2020-21 are forecast to be 4.9 per cent and 5.6 per cent, respectively. The NCEAR has indicated some improvement in the fourth quarter of the current financial year. Elaborating further it said due to better rainfall in the monsoon as well as the post-monsoon seasons and considerable improvement in the storage of water in major reservoirs of the country, the prospects for growth in the agricultural sector remain bright.

Talking about green shoots in the services sector, it said the GVA of the services sector grew at 6.8 per cent in Q1 and 6.9 per cent in Q2 this fiscal. Three lead indicators, viz., tourist arrivals, aviation passenger traffic, and services trade, were the bright spots in Q3: 2019-20. It further said cargo traffic across different transport modes continued to show negative growth in the third quarter of the current fiscal. After falling to 49.2 in October 2019, the Nikkei PMI Services Index showed a sharp and sustained rebound. This signals that the sector is in the process of bottoming out.

The CNX Nifty is currently trading at 11955.55, down by 125.30 points or 1.04% after trading in a range of 11923.85 and 12012.55. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.39%, UPL up by 1.03%, Tech Mahindra up by 0.53%, Sun Pharma Industries up by 0.51% and SBI up by 0.50%. On the flip side, Hindalco down by 5.84%, Tata Steel down by 3.73%, JSW Steel down by 3.46%, Vedanta down by 3.30% and Tata Motors down by 2.56% were the top losers.

All Asian markets are trading lower; Shanghai Composite declined 10.45 points or 0.34% to 3,029.22, Straits Times trembled 28.88 points or 0.91% to 3,152.15, KOSPI fell 65.12 points or 3.01% to 2,097.72, Jakarta Composite lost 68.95 points or 1.17% to 5,813.31, Taiwan Weighted dropped 156.80 points or 1.34% to 11,529.55 and Hang Seng was down by 404.97 points or 1.48% to 26,903.84.