Post Session: Quick Review

Monday turned out to be a mood dampener for Indian equity markets with frontline gauges ending with a cut of around two percentage points amid losses in other Asian peers as the spread of the coronavirus outside China darkened the outlook for world growth. Sentiments remained dampened since beginning of the trade with major gauges made a gap-down opening and traded bearish throughout the day. 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). Traders took note of Employees' Provident Fund Organisation’s ‘Provisional Estimate of Net Payroll’ data showing that India created 1008600 new jobs in the month of December 2019 as against revised figure of 1009238 in November 2019.

Markets extended losses tracking weakness in European markets, as Lithuania's industrial production declined in January, led by fall in electricity output. Industrial production decreased a working-day adjusted 4.0 percent year-on-year in January, led by a 13.4 percent drop in electricity, gas, steam and air conditioning supply. On the global front, Asian markets ended in red, after Singapore's consumer price inflation remained stable in January. The data from the Monetary Authority of Singapore and the Ministry of Trade and Industry showed that the consumer price index rose 0.8 percent year-on-year in January, same as seen in December.

Back home, 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. On the sectoral front, shares of metal companies remained under pressure as international concern about the spread of coronavirus outside China grew. Traders ignored Union Steel Minister Dharmendra Pradhan’s statement where he urged Japanese investors to invest in India's steel sector, saying the country offers a fast-growing market and steel consumption will more than double in the coming years. Meanwhile, 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.

The BSE Sensex ended at 40363.23, down by 806.89 points or 1.96% after trading in a range of 40306.36 and 41037.01. There were 0 stocks advancing against 30 stocks declining on the index. (Provisional)

The broader indices were trading in red; the BSE Mid cap index was down by 1.60%, while Small cap index down by 1.58%. (Provisional)

The losing sectoral indices on the BSE were Metal down by 5.71%, Auto down by 3.39%, Telecom down by 3.33%, Basic Materials down by 2.97%, Energy down by 2.67%, while there were no losers. (Provisional)

The top losers on the Sensex were Tata Steel down by 6.39%, ONGC down by 4.72%, Maruti Suzuki down by 4.24%, Titan Co down by 3.42% and HDFC down by 3.29%, while there were no gainers. (Provisional)

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 ended at 11829.40, down by 251.45 points or 2.08% after trading in a range of 11813.40 and 12012.55. There were 0 stocks advancing against 50 stocks declining on the index. (Provisional)

The top losers on Nifty were JSW Steel down by 8.11%, Vedanta down by 6.43%, Tata Steel down by 6.34%, Hindalco down by 5.74% and Tata Motors down by 4.95%, while there were no gainers. (Provisional) 

European markets were trading in red; France’s CAC decreased 227.29 points or 3.77% to 5,802.43, Germany’s DAX fell 485.09 points or 3.57% to 13,094.24 and UK’s FTSE 100 was down by 248.89 points or 3.36% to 7,155.03.

Asian markets ended mostly lower on Monday as spreading of corona virus outbreak outside China fueled worries about the impact on global economic growth. South Korea raised its corona virus alert to the ‘highest level’, while Italy and Iran confirmed an uptick in corona virus infections. Chinese shares ended lower as new cases of corona virus flared outside China, offsetting assurances from Beijing that it would step up policy adjustments to help cushion the blow to its epidemic-hit economy. Meanwhile, the Japanese markets were closed for the Emperor's Birthday holiday.