Weak trade continues on Dalal Street

Indian equity benchmarks continued their weak trade in afternoon deals, on the back of sustained selling activities by market-participants amid weakness across Asian peers. The mood of the markets remained impacted 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. Some concern also came 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. Investors failed to take any sense of relief with Commerce minister Piyush Goyal's statement that India and the US can finalise a larger trade deal much fast and expressed hope that the bilateral trade target of $500 billion is certainly achievable target in the next five years. On the sectoral front, insurance stocks remained in focus 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. 

On the global front, Asian Markets were trading lower, as a U.S. warning to Americans to prepare for the possibility of a coronavirus pandemic drove another Wall Street tumble and pushed yields on safe-haven Treasuries to record lows. Back home, the BSE Sensex is currently trading at 40011.98, down by 269.22 points or 0.67% after trading in a range of 39888.17 and 40194.89. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.81%, while Small cap index was down by 0.16%.

The top losing sectoral indices on the BSE were Auto down by 1.50%, Realty down by 1.46%, Telecom down by 1.26%, Metal down by 0.91% and Industrials down by 0.91%, while there were no gainer on sectoral indices.

The top gainers on the Sensex were NTPC up by 0.95%, Ultratech Cement up by 0.90%, ONGC up by 0.77%, Power Grid up by 0.59% and Hindustan Unilever up by 0.48%. On the flip side, Sun Pharma down by 2.78%, Maruti Suzuki down by 1.86%, Indusind Bank down by 1.56%, Larsen & Toubro down by 1.30% and ICICI Bank down by 1.27% were the top losers.

Meanwhile, Commerce minister Piyush Goyal has said that India and the US can finalise a larger trade deal much fast and expressed hope that the bilateral trade target of $500 billion is certainly achievable target in the next five years. He also said both the leaders (Prime Minister Narendra Modi and US President Donald Trump) have decided to formally engage to move towards a free trade agreement (FTA) between the two big economies.

Goyal has stated that Commerce ministry will conduct comprehensive stakeholder consultations and engaged with all concerned people on issues including market access, opening up services, on investment protocols, and on areas of mutual interest. He noted that generally in a limited trade deal, two trading partners reduce customs duties on limited number of goods to enhance economic ties. On the other hand, he said FTA is a big trade deal under which two trading partners significantly reduce or eliminate customs duties on maximum number of goods traded between them. Besides, they also relax norms for promoting investments and trade in services. He said that America will also gain significantly with this partnership.

On investments, the minister said businesses invest in any country not out of charity but when they see an opportunity. He said ‘India offers that opportunity....we are providing that opportunity, people are most welcome and we invite and welcome capital. We invite your investment into India but not at the cost of our pride.’ He added that India's earlier trade agreements did not provide enough opportunities for Indian manufacturing/businesses to expand and grow but opened large amounts of our markets.

The CNX Nifty is currently trading at 11715.05, down by 82.85 points or 0.70% after trading in a range of 11679.55 and 11743.45. There were 11 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.84%, Ultratech Cement up by 1.16%, NTPC up by 0.77%, Coal India up by 0.74% and HCL Technologies up by 0.70%. On the flip side, GAIL India down by 3.42%, Hindalco down by 3.32%, Tata Motors down by 3.24%, Sun Pharma down by 2.94% and Maruti Suzuki down by 2.01% were the top losers.

Asian Markets were trading lower; Hang Seng decreased 215.00 points or 0.8% to 26,678.23, Taiwan Weighted dropped 106.61 points or 0.92% to 11,433.62, KOSPI fell 26.84 points or 1.28% to 2,076.77, Straits Times trembled 31.91 points or 1.01% to 3,126.33, Jakarta Composite lost 67.24 points or 1.16% to 5,719.90, Shanghai Composite declined 7.14 points or 0.24% to 3,005.91 and Nikkei 225 was down by 179.22 points or 0.79% to 22,426.19.