Benchmarks crash in early deals; Sensex loses over 1,000 points

Extending their losing streak for yet another session, Indian equity benchmarks made gap-down opening on Friday in line with a coronavirus-led sell-off in global markets. Sensex and Nifty crashed in early deals with losses of around 3 percent each. Industry body PHDCCI said that the coronavirus outbreak may negatively impact global growth by 30 basis points or $250 billion. On the domestic front, traders were concerned with the Association of Indian Forging Industry’s (AIFI) statement that disruption in supplies due to the coronavirus outbreak in China has hit domestic forging industry along with automobile and auto component manufacturing sectors. Besides, investors were also awaited the GDP numbers for the third quarter of FY20 to be released later in the day. Rating agency ICRA expects the growth of the Indian GDP and the gross value added (GVA) at basic prices in year-on-year (Y-o-Y) terms to rise mildly to 4.7% and 4.5%, respectively, in Q3 FY2020, from 4.5% and 4.3%, respectively, in Q2 FY2020.

Global sell-off continued to weigh on domestic markets with Asian markets tumbling after US stocks plunged into correction territory overnight amid fears over the rapid spread of the coronavirus globally. In the US, California Governor Gavin Newsom said 33 people have tested positive for the coronavirus and the state is currently monitoring at least 8,400 others. The number of coronavirus infections in South Korea has risen to more than 2,000, while Japan has asked all schools nationwide to close from Monday. Nigeria has confirmed the country's first case of the coronavirus.

Back home, India Ratings and Research (Ind-Ra) has revised its outlook on the steel sector from stable-to-negative to negative for FY2021-21. In stock specific developments, Bharti Airtel and Vodafone Idea fell despite reports that the telecom department is working on at least three options to defer the Rs 1.47 lakh crore adjusted gross revenue (AGR) liability of telecom companies.

The BSE Sensex is currently trading at 38660.02, down by 1085.64 points or 2.73% after trading in a range of 38601.67 and 39087.47. All 30 stocks were declining on the index.
The broader indices were trading in red; the BSE Mid cap index declined 3.20%, while Small cap index was down by 3.22%.

The top losing sectoral indices on the BSE were Metal down by 5.08%, Realty down by 3.98%, IT down by 3.74%, Basic Materials down by 3.62% and TECK was down by 3.58%, while there were no gainers on the BSE sectoral front.

The top losers on the Sensex were Tata Steel down by 6.14%, Tech Mahindra down by 4.80%, Infosys down by 4.55%, Bajaj Finance down by 4.08% and Mahindra & Mahindra down by 3.88%, while there were no gainers on the Sensex.

Meanwhile, the much awaited India-US deal is likely to be formalised soon. India and the US are set to sign the first phase of a mega trade deal soon under a model followed by the Donald Trump administration in finalising a similar deal with China. India and the US have almost completed negotiations for first phase of the ambitious deal and it will be formalised soon.

India and the US have decided to launch talks on a totalisation agreement which relieves Indians from double taxation. Any Indian working in the US has to contribute to social security from his salary, but the money is not released if the employee returns to India without completing a period of 10 years of service. The issue was raised during delegation-level meeting between Prime Minister (PM) Narendra Modi and President Trump.

After his talks with Trump, PM Modi has said both the sides agreed to start negotiations for a ‘big trade deal’ and hoped that it will yield good results in mutual interest. President Trump, in turn, said ‘Our teams have made tremendous progress on a comprehensive trade agreement and I am optimistic we can reach a deal that will be of great importance to both countries.’ He added that ‘since I took office, US exports to India are up nearly 60% and exports of high-quality American energy have grown by 500%.’ Modi said India and the US are committed to openness and fair and balanced trade in the economic sector.

The CNX Nifty is currently trading at 11300.10, down by 333.20 points or 2.86% after trading in a range of 11286.50 and 11384.80. All 50 stocks were declining on the index.

The top losers on Nifty were Tata Motors down by 7.50%, Tata Steel down by 6.49%, Vedanta down by 5.78%, JSW Steel down by 5.77% and Hindalco down by 5.76%, while there were no gainers on Nifty.

All Asian markets were trading lower, KOSPI fell 62.90 points or 3.06% to 1,991.99, Straits Times tumbled 79.13 points or 2.54% to 3,032.57, Shanghai Composite declined 100.77 points or 3.37% to 2,890.56, Jakarta Composite lost 215.13 points or 3.89% to 5,320.56, Hang Seng decreased 670.34 points or 2.5% to 26,108.28 and Nikkei 225 was down by 882.08 points or 4.02% to 21,066.15.