Markets end lower for 7th straight day amid fresh coronavirus cases in India

02 Mar 2020 Evaluate

Indian equity benchmarks ended lower on Monday for the seventh straight day, as detection of fresh coronavirus cases in the country spooked domestic investors. After a firm start, indices remained in green for the most part of the session, as the government collected Rs 1.05 lakh crore as Goods and Services Tax (GST) revenue in February, up 8% over the same month last year. Adding some relief among market participants, the growth of India's eight core sectors improved to 2.2% in January 2020 against 1.5% in the same month last year, helped by expansion in the production of coal, refinery products and electricity.

But, indices slipped into red in the last hour of trade, as Fitch Solutions cut its forecast for India's economic growth to 4.9 per cent in the current fiscal that ends March 31, saying manufacturing could come under pressure from weak domestic demand and supply chain disruptions due to the coronavirus outbreak. The GDP growth is forecast to recover slightly to 5.4 per cent in 2020-21 (April 2020 to March 2021). Besides, the Controller General of Accounts data showed that India's fiscal deficit touched 128.5 percent of current financial year budget target at January-end. The deficit during the same period of FY19 was 121.5 percent.

On the global front, European markets were trading in green, as Spain's manufacturing sector returned to expansion territory in February after contracting for eight straight months. The survey data from IHS Markit showed that the manufacturing Purchasing Managers' Index rose to a 10-month high of 50.4 from 48.5 in January. Asian markets ended mixed, despite Indonesia's manufacturing conditions improved for the first time in eight months in February. The survey data from IHS Markit showed that the manufacturing Purchasing Managers' Index rose to 51.9 from 49.3 in January. A score above 50 indicates expansion.

Back home, the banking sector stocks ended in red territory, as the Reserve Bank of India’s data report showed that bank credit growth declined to 8.5 per cent in January from 13.5 per cent in the year-ago period led by a sharp slowdown in loans to the services sector. Growth in advances to the services sector decelerated to 8.9 per cent from 23.9 per cent in January 2019. Further, the steel industry stocks remained in focus, after the World Steel Association (worldsteel) in its latest report stated that India's crude steel production registered a decline of 3.26 per cent to 9.288 million tonnes (MT) in January this year.

Finally, the BSE Sensex slipped 153.27 points or 0.40% to 38144.02, while the CNX Nifty was down by 69.00 points or 0.62% to 11132.75.

The BSE Sensex touched high and low of 39083.17 and 37785.99, respectively and there was 9 stock advancing against 21 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.65%, while Small cap index was down by 0.77%.

The few gaining sectoral indices on the BSE were IT up by 1.06% and TECK up by 0.55% while, PSU down by 2.43%, Metal down by 2.05%, Oil & Gas down by 1.98%, Basic Materials down by 1.42% and Utilities down by 1.24% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech. up by 2.36%, Nestle up by 2.28%, ICICI Bank up by 1.93%, Infosys up by 1.78% and Power Grid up by 1.02%. On the flip side, SBI down by 5.10%, Tata Steel down by 4.55%, Hero MotoCorp down by 3.62%, Bajaj Auto down by 3.21% and ONGC down by 3.10% were the top losers.

Meanwhile, asserting that the world has confidence in India and its economy, Minister of State for Finance and Corporate Affairs Anurag Thakur has said that the government is aiming to make India among the top three economies of the world by 2025. He noted that the country has overtaken France and the UK to become the world’s fifth-largest economy. He added that various financial institutions, including IMF and RBI, have estimated that India will once again attain fast growth.

The minister has stated that IMF and RBI have said India is bound to grow at the rate of 6-6.5 percent in financial year 2020-21, that clearly shows that the world has confidence in India and Indian economy and the government is taking all the steps in that direction. He said ‘if you look at FDI inflows during the last five years into the country, they far exceed the FDI during the 10 years of UPA rule. He added that the country's foreign exchange reserves swelled by $3.091 billion to a lifetime high of $476.092 billion in, mainly due to a rise in foreign currency assets.

Thakur said ‘the fiscal deficit, which used to be at 5.2 percent during the UPA regime, has come down to 3.3 percent, though this year it will be 3.8 percent and next year we will bring it down to 3.5 percent.’ He also said the government has shown what fiscal discipline is Inflation, which used to be 12 percent, came down to 4 percent. He added that all macroeconomic indicators point that India is going ahead in the right direction.

The CNX Nifty traded in a range of 11,433.00 and 11,036.25. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 2.48%, Eicher Motors up by 2.48%, Nestle up by 2.23%, ICICI Bank up by 1.74% and Tech Mahindra up by 1.36%. On the flip side, Yes Bank down by 6.65%, SBI down by 5.08%, Tata Steel down by 4.65%, GAIL India down by 4.41% and Hero MotoCorp down by 3.74% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 91.92 points or 1.4% to 6,672.53 and France’s CAC increased 18.80 points or 0.35% to 5,328.70, while Germany’s DAX decreased 4.45 points or 0.04% to 11,885.90.

Asian markets ended mixed on Monday after Federal Chairman Jerome Powell opened the door to a rate-cut at the Fed’s March 17-18 meeting by issuing a rare statement Friday pledging to ‘act as appropriate’ to support the economy. Japanese shares ended higher after the Bank of Japan (BoJ) Governor Haruhiko Kuroda pledged that the central bank will make every effort to ensure stability in financial markets that have been roiled as the new corona virus spreads worldwide. Issuing an emergency statement, BoJ Governor also said the central bank will monitor the developments carefully and offer sufficient liquidity via market operations and asset purchases. Investors shrugged off survey data from IHS Markit showing that Japan's manufacturing sector contracted at the fastest pace since 2016. Further, Chinese shares ended up despite manufacturing PMI data released over the weekend coming in well below expectations. The Markit/ Caixin manufacturing Purchasing Managers' Index (PMI) dropped to 40.3 in February, falling well below expectations of a reading of 45.7. The official PMI dropped to 35.7 in the month - the lowest level on record.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,970.93
90.63
3.15

Hang Seng

26,291.68
161.75
0.62

Jakarta Composite

5,361.25
-91.45
-1.68

KLSE Composite

1,466.94

-15.70

-1.06

Nikkei 225

21,344.08
201.12
0.95

Straits Times

3,007.72
-3.36
-0.11

KOSPI Composite

2,002.51
15.50
0.78

Taiwan Weighted

11,170.46
-121.71
-1.08


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