Post Session: Quick Review

Key equity benchmarks once again came under heavy selling pressure on Wednesday and extended their losses to a fourth session in a row, as weak global cues weighed down sentiments. Markets started the day on a gloomy note and stayed in the negative terrain for whole trading session, as traders remain concerned about 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. Some concern also crept in with payroll data of the Employees’ State Insurance Corporation (ESIC) showing that around 12.67 lakh jobs were created in December 2019 lower against 14.59 lakh in the previous month.

However, day's losses were pared to an extent in the mid trading session, taking support from former NITI Aayog Vice Chairman Arvind Panagariya’s statement that India's slowdown has bottomed out and now its economy needs to be opened up if the country wants to realise the ambition of a 10 per cent growth rate. He said in the next fiscal year, India's GDP growth is expected to be 6 per cent and then it will get back to 7-8 per cent which has been the case in the last 15-16 year period. Though, markets failed to trim all of their losses and witnessed sharp sell-off in late hour of trade, as anxiety remained among traders after Moody's Analytics said that a global recession is likely if coronavirus becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in Italy and Korea.

On the global front, Asian markets ended lower on Wednesday, while European markets were trading in red, as the fast-spreading coronavirus deepened fears about its impact on global growth with marquee companies sounding the alarm on earnings. Back home, insurance stocks were in limelight with Fitch Ratings stating that the proposed initial share sale of LIC will improve the accountability and transparency of the country's largest insurer and benefit the insurance industry.  Banking stocks also were in focus with Crisil Ratings’ statement that a slowdown in bank lending may be bottoming out this fiscal, while gross credit off take may rise 8-9% year-on-year in fiscal 2021 backed by retail demand.

The BSE Sensex ended at 39896.77, down by 384.43 points or 0.95% after trading in a range of 39760.39 and 40255.39. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.31%, while Small cap index was down by 0.75%. (Provisional)

The only gaining sectoral index on the BSE was Telecom up by 0.05%, while Realty down by 1.99%, Auto down by 1.97%, Capital Goods down by 1.91%, Energy down by 1.81% and Metal down by 1.69% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 0.77%, Bajaj Auto up by 0.27%, Axis Bank up by 0.21%, HDFC Bank up by 0.15% and Bharti Airtel up by 0.07%. (Provisional)

On the flip side, Sun Pharma down by 3.78%, Maruti Suzuki down by 2.35%, Larsen & Toubro down by 2.32%, Reliance Industries down by 1.96% and Hero MotoCorp down by 1.91% were the top losers. (Provisional)

Meanwhile, Care Ratings in its latest report has projected India’s Gross Domestic Product (GDP) growth at 4.5% for the third quarter (Q3) of current fiscal year (FY20), which is lower than 6.6% GDP growth recorded in the corresponding period a year ago. It also projected Gross Value Added (GVA) growth at 4.3% for Q3FY20. For the FY20, it has estimated GDP growth to be at 5% with a downward bias. Low base effect in Q4FY19 will aid growth in Q4FY20. However, sustained low economic activity coupled the possible adverse impact of the outbreak of corona-virus could limit the overall GDP growth for FY20.

The rating agency said that the deceleration in the economy so far has been broad-based with higher government expenditure supporting economic growth. On the expenditure side, lacklustre growth in investment activity and contraction in exports have weighed on GDP growth. At the sectoral level slow growth in case of manufacturing, mining and construction activity have dragged overall GVA. Though, it added that the increased government spending is expected to boost the economic growth.

On the sectoral front, it has projected GVA growth in agriculture and allied activities to be at 3.3% for Q3FY20. Mining and quarrying is projected to contract by 2% in Q3FY20 primarily owing to negative growth seen in core sector growth of coal, crude-oil and natural gas. It also projected contraction of 3% in electricity segment in Q3FY20 on account of significant de-growth of 6% seen in IIP-electricity during the same period. Construction activity is projected to grow at 2.5% in Q3FY20 compared with 9.7% in corresponding period year ago.

The CNX Nifty ended at 11683.55, down by 114.35 points or 0.97% after trading in a range of 11639.60 and 11783.25. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 4.84%, Bharti Infratel up by 1.80%, SBI up by 0.73%, Bajaj Auto up by 0.43% and Britannia Inds up by 0.34%. (Provisional)

On the flip side, GAIL India down by 5.00%, Tata Motors down by 3.94%, Sun Pharma down by 3.88%, Hindalco down by 2.72% and Grasim Industries down by 2.53% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 66.23 points or 0.94% to 6,951.65, France’s CAC decreased 55.88 points or 0.98% to 5,623.80 and Germany’s DAX decreased 213.20 points or 1.67% to 12,577.29.

Asian markets ended lower on Wednesday as continued fears about the growing virus outbreak, that will hurt the global economy, and officials described it was ‘a rapidly escalating epidemic’. Asia reported hundreds of new corona virus cases, including the first US soldier to be infected, as the United States warned of an inevitable pandemic, and as outbreaks in Italy and Iran spread to more countries. Japanese shares ended lower due to spike in corona virus infections beyond mainland China. Japanese Prime Minister Shinzo Abe on Wednesday called for sports and cultural events to be scrapped or curtailed for two weeks as the country battles to stem corona virus contagion amid mounting concerns the 2020 Tokyo Olympics could be cancelled.