Benchmarks enlarge losses in early noon session

Indian bourses enlarged their losses in the early noon session, with Sensex losing over 300 points and Nifty falling below the 11,750 level, weighed down by massive sell-off overnight on the Wall Street amid concerns over the Covid-19 spreading beyond China. Telecom, Auto and Realty shares have led the selloff in markets, with hardly any corner showing any resistance. The broader markets were also facing the heat of selling pressure; the BSE Midcap & Smallcap slipped 0.90-0.34 percent. Sentiments were also dented with Care Ratings report that it has projected Gross Domestic Product (GDP) growth of 4.5% for Q3-FY20, which is lower than 6.6% GDP growth recorded in the corresponding period a year ago. For the FY20, it has estimated GDP growth to be at 5% with a downward bias. However, Indian rupee strengthened against the US dollar on Wednesday, driven by record-low 10-year US yields and easing Brent crude oil prices following worries the corona virus could seriously disrupt an already sluggish global economy.

On the global front, Asian Markets were trading mostly lower on account of mounting tensions surrounding spread of coronavirus and is impact over global economy. Back on street, shares of India Cements jumped by over 19% after Gopikishan Damani buys 2.75% stake. Bandhan Bank gained as RBI lifted restrictions on opening new branches.

The BSE Sensex is currently trading at 39977.88, down by 303.32 points or 0.75% after trading in a range of 39888.17 and 40194.89. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.90%, while Small cap index was down by 0.34%.

The top losing sectoral indices on the BSE were Telecom down by 1.97%, Auto down by 1.57%, Realty down by 1.44%, Metal down by 1.13% and Industrials was down by 1.08%, while there were no gainer on sectoral indices.

The top gainers on the Sensex were Ultratech Cement up by 0.83%, Hindustan Unilever up by 0.56%, Power Grid Corporation up by 0.30%, Asian Paints up by 0.26% and SBI was up by 0.17%. On the flip side, Sun Pharma down by 2.95%, Bharti Airtel down by 2.15%, Indusind Bank down by 1.95%, Maruti Suzuki down by 1.76% and ICICI Bank was down by 1.42% were the top losers.

Meanwhile, a joint report by the Confederation of Indian Industry (CII)-US India Business Council (USIBC) has stated that India must look at ways to hike foreign direct investment (FDI) caps in sectors such as multi-brand retail, defence and insurance as these are the areas where US technology and expertise could help bring in much needed resources and infrastructure. It also said that both the countries must take a long-term and comprehensive view on issues pertaining to e-commerce sector by taking all concerns into account before finalising any policy.

According to the report, India's e-commerce policy has engendered a whole host of issues that impact both domestic and foreign players, including definition of private versus community data; prohibition on cross-border data sharing; mandate to establish data centres; and domestic versus Indian product definitions. It said India should review the feasibility of increasing FDI caps or additional provisions for foreign ownership in sectors like defence (49 percent except in specific cases where the foreign company is bringing a high end or sensitive technology), insurance (49 percent but with control remaining with the domestic partner), multi-brand retail (though 51 percent foreign ownership is allowed, onerous additional provisions have inhibited growth in this sector). It added that these are high growth areas in India, where US technology, expertise and know-how could help bring in much needed resources, capacity building, infrastructure, and consequent job creation.

The CII-USIBC report further said that India should consider bringing down the import duty on high end motorcycles (that include Harley Davidson motorcycles) to zero for both Complete Built Up (CBU) units and for Completely Knocked Down (CKD) units. The zero per cent rate could apply to all motorcycle imports being sold in India over Rs 5 lakhs (about $7,100). Adding further, it said India and the US should consider launching a comprehensive consultation process, involving sustained dialogue with industry, to examine all facets of the US India partnership to determine the best course of action regarding a formal trade agreement. It said given the enormous consequence of India’s geopolitical, strategic and economic future for the US, a trade architecture that serves both countries well is of utmost importance.

The CNX Nifty is currently trading at 11707.10, down by 90.80 points or 0.77% after trading in a range of 11679.55 and 11743.45. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.99%, Ultratech Cement up by 1.13%, Hindustan Unilever up by 0.56%, Power Grid Corporation up by 0.35% and Vedanta was up by 0.34%. On the flip side, GAIL India down by 3.42%, Tata Motors down by 3.40%, Sun Pharma down by 3.05%, Hindalco down by 2.78% and Bharti Airtel was down by 2.07% were the top losers.

Most of the Asian Markets were trading lower; Hang Seng decreased 176.91 points or 0.66% to 26,716.32, Nikkei 225 slipped 179.22 points or 0.79% to 22,426.19, Jakarta Composite lost 62.24 points or 1.08% to 5,724.90, Straits Times trembled 31.61 points or 1% to 3,126.63, KOSPI fell 20.45 points or 0.97% to 2,083.16 and Taiwan Weighted was down by 106.61 points or 0.92% to 11,433.62. On the other hand, Shanghai Composite was up by 2.08 points or 0.07% to 3,015.13.