Markets at day's low on incremental selling pressure

Continuing its negative momentum, the local equity markets were now trading at day’s low points in afternoon session, as global markets slumped on fears that the coronavirus outbreak will lead to recession. Market sentiment also took a hit as Industry body PHDCCI said that the coronavirus outbreak may negatively impact global growth by 30 basis points or $250 billion. It said disruptions in the global supply chains will not only hit China's exports but also the exports of the importing countries as they import a large chunk of raw materials and intermediate goods from China while exporting to other respective destinations. Investors also remained on sidelines ahead of the release the Gross Domestic Product (GDP) figures for the October-December period to be released later in the day. A falling rupee also dented the market mood on Friday as the currency crashed by 53 paise amid foreign fund outflows. On the sectoral front, Aviation stocks were trading lower as ratings agency ICRA in its latest report has maintained negative outlook on the Indian aviation industry in the wake of coronavirus outbreak, which has resulted in many international passengers cancelling their travel to South East Asian countries. 

On the global front, Asian markets were trading lower, as fears about the novel coronavirus continue to spur a global sell-off. Back home, the BSE Sensex is currently trading at 38438.41, down by 1307.25 points or 3.29% after trading in a range of 38403.53 and 39087.47. All 30 stocks were declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 3.40%, while Small cap index was down by 3.46%.

The top losing sectoral indices on the BSE were Metal down by 6.34%, IT down by 4.58%, Realty down by 4.35%, TECK down by 4.31% and Basic Materials down by 4.28%, while there were no gainers on sectoral indices.

The top losers on the Sensex were Tata Steel down by 7.36%, Bajaj Finance down by 6.12%, Tech Mahindra down by 5.84%, Infosys down by 5.50% and Axis Bank down by 4.39%.

Meanwhile, Ratings agency ICRA in its latest report has maintained its negative outlook on the Indian aviation industry in the wake of coronavirus outbreak, which has resulted in many international passengers cancelling their travel to South East Asian countries. It said the suspension of flights on the India-China sector will not result in any significant impact on the financial performance of the airlines, unless the lockout is prolonged, as the traffic on these routes account for only 0.9-1.3 percent of the total international passenger numbers.

However, the rating agency said the impact is expected to be severe if passengers from other South East Asian countries, hit by coronavirus, cancel their travel. It also said that traffic from these countries account for around 19.5-23.8 percent of the total international passengers flying to and from India. But, it said the extent of impact of the flight/ ticket cancellations on the profitability of the domestic airlines would vary depending on the airlines' presence in these routes.

ICRA said the medium-term impact on the domestic aviation industry would also depend on the economic shock to the global economy due to the coronavirus outbreak. It said historically, foreign airlines have enjoyed high market share while domestic airlines account for less than 40 percent of the total passengers carried on international routes to and from to India. It added that decline in jet fuel prices would partly compensate airlines' loss of revenues due to flight cancellations.

The CNX Nifty is currently trading at 11249.95, down by 383.35 points or 3.30% after trading in a range of 11233.95 and 11384.80. There were 1 stocks advancing against 49 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 0.06%. On the flip side, Vedanta down by 11.26%, Tata Motors down by 9.19%, Tata Steel down by 7.39%, Tech Mahindra down by 6.06% and Bajaj Finance down by 6.03% were the top losers.

All Asian markets were trading lower; Hang Seng decreased 754.19 points or 2.82% to 26,024.43, Taiwan Weighted dropped 141.45 points or 1.24% to 11,292.17, KOSPI fell 67.88 points or 3.3% to 1,987.01, Straits Times trembled 98.53 points or 3.17% to 3,013.17, Jakarta Composite lost 223.73 points or 4.04% to 5,311.96, Shanghai Composite declined 100.58 points or 3.36% to 2,890.75 and Nikkei 225 slipped 805.27 points or 3.67% to 21,142.96.