Markets’ pain deepen in late noon deals

Indian equity bourses extended their southward journey in late afternoon session, tracking weak European markets. Traders were worried as 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. The street paid no heed towards 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.

On the global front, European markets were trading in red, as Hungary's average gross earnings growth slowed in December. The figures from the Hungarian Central Statistical Office showed that average gross earnings grew 13.1 percent year-on-year in December, after a 13.9 percent increase in November. Asian markets were also trading in red, even after Singapore industrial production rose unexpectedly in January. The data from the Economic Development Board showed that industrial production increased 3.4 percent year-on-year in January, reversing a 3.7 percent drop in December. Among clusters, biomedical manufacturing grew 41.1 percent annually in January.

The BSE Sensex is currently trading at 39901.49, down by 379.71 points or 0.94% after trading in a range of 39760.39 and 40255.39. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.26%, while Small cap index was down by 0.75%.

The top losing sectoral indices on the BSE were Realty down by 2.18%, Auto down by 2.10%, Capital Goods down by 2.00%, Utilities down by 1.95% and Metal down by 1.94%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Ultratech Cement up by 0.60%, Hindustan Unilever up by 0.50%, HCL Tech up by 0.19%, Asian Paints up by 0.15% and Axis Bank up by 0.12%. On the flip side, Sun Pharma down by 3.47%, Maruti Suzuki down by 3.13%, Larsen & Toubro down by 2.50%, ITC down by 2.16% and Indusind Bank down by 1.84% were the top losers.

Meanwhile, in an effort towards making India a more attractive foreign direct investment (FDI) destination, the Department for Promotion of Industry and Internal Trade (DPIIT) has notified the government's decision to allow 100 per cent FDI in insurance intermediaries.

Intermediary services include insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors. The FDI policy earlier allowed 49 per cent foreign investment in the insurance sector, which includes insurance intermediaries. As per the notification, 100 per cent FDI is allowed in insurance intermediaries under automatic approval route.

It also said that insurance intermediary that has majority shareholding of foreign investors shall undertake measures including incorporation as a limited company under the provisions of the Companies Act 2013; at least one from among the chairman of the board of directors or the CEO or principal officer or MD of the company shall be a resident Indian citizen, shall take permission of the IRDA for repatriating dividend, and shall not make payments to the foreign group or promoter or associate entities beyond what is necessary or permitted.

The CNX Nifty is currently trading at 11681.30, down by 116.60 points or 0.99% after trading in a range of 11639.60 and 11783.25. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.56%, Ultratech Cement up by 0.57%, Hindustan Unilever up by 0.42%, HCL Tech up by 0.35% and Axis Bank up by 0.29%. On the flip side, GAIL India down by 5.13%, Tata Motors down by 3.57%, Sun Pharma down by 3.32%, Maruti Suzuki down by 3.14% and BPCL down by 2.62% 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.

All European markets were trading in red, UK’s FTSE 100 lost 100.54 points or 1.43% to 6,917.34, France’s CAC fell 99.10 points or 1.74% to 5,580.58 and Germany’s DAX was down by 278.66 points or 2.18% to 12,511.83.