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Weakness persists over Dalal Street in late morning deals

03 Apr 2020 Evaluate

Weakness remained over the Dalal Street in late morning deals, on account of heavy losses at banking and metal counters. Investors were cautious, as the Asian Development Bank (ADB) said that India's economic growth is likely to slow down to 4 per cent this fiscal on the back of the current global health emergency. The street overlooked reports that Industry body ASSOCHAM urged the government to roll out a $100-120 billion stimulus package to help revive all sectors of the economy, which has been battered by the coronavirus outbreak and the subsequent nationwide lockdown.

On the global front, Asian markets were trading in red, after China's services activity contracted in March, albeit at a slower pace, as the sector faces challenging conditions in March, with the coronavirus, or covid-19 outbreak. The survey data from IHS Markit showed that the Caixin services Purchasing Managers' Index rose to 43.0 in March from 26.5 in February. However, a score below 50 indicates contraction.

The BSE Sensex is currently trading at 27792.39, down by 472.92 points or 1.67% after trading in a range of 27704.57 and 28639.12. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.72%, while Small cap index was down by 0.64%.

The top gaining sectoral indices on the BSE were Healthcare up by 3.27%, Utilities up by 0.54%, Telecom up by 0.37% and Realty up by 0.28%, while Bankex down by 3.84%, Metal down by 2.98%, Basic Materials down by 1.96%, Consumer Disc down by 1.80% and Auto down by 1.76% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 7.47%, Mahindra & Mahindra up by 4.16%, Tech Mahindra up by 3.01%, ONGC up by 2.81% and Bajaj Finance up by 2.70%. On the flip side, Kotak Mahindra Bank down by 6.36%, Indusind Bank down by 6.35%, ICICI Bank down by 5.41%, Titan Company down by 4.84% and HDFC down by 4.23% were the top losers.

Meanwhile, rating agency ICRA in its latest report has warned that the asset quality pressure for banks and Non-bank financial companies (NBFCs) is expected to increase in the current financial year (FY21) as slower economic activity amid the coronavirus pandemic may affect debt servicing capabilities of borrowers. It noted that the spike in reported non- performing assets (NPAs) would be reflected over the next few quarters. As per ICRA’s estimates, the country’s Gross Domestic Product (GDP) growth is expected to slow down to 2 percent during FY21 from estimates of 4.4 percent in FY20.

According to the report, the actual increase in the quantum of NPAs for banks and NBFCs will be known after some more days. It said recently, the Reserve Bank of India (RBI) gave a relief package for retail borrowers and businesses by announcing a three-month moratorium on payment of all term loans falling due between March 1, 2020 and May 31, 2020. It expects the asset quality stress is likely to reflect with a lag of 1-2 quarters post the removal of the moratorium and the stress will vary across segments. In case of banks, it said NPA generation will increase as compared to an earlier expectation of moderation in bad loans.

The rating agency further said that credit costs to remain elevated and recoveries will get pushed back for banks. It also said the gross slippage rate for state-owned banks is likely to be 4.5-5 percent and the provision coverage ratio (PCR) may decline to 57-60 percent. It noted that the solvency profile of PSBs will weaken to 53-57 percent from current level of 51 percent. It added that private sector banks are likely to see gross slippage rate of 4-5 per cent and a fall in PCR to 60-62 per cent in the current fiscal.

The CNX Nifty is currently trading at 8127.60, down by 126.20 points or 1.53% after trading in a range of 8096.90 and 8356.55. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Cipla up by 7.67%, Sun Pharma up by 7.48%, Mahindra & Mahindra up by 4.03%, GAIL India up by 3.50% and ONGC up by 3.04%. On the flip side, Indusind Bank down by 6.38%, Kotak Mahindra Bank down by 6.11%, JSW Steel down by 5.70%, ICICI Bank down by 5.43% and Titan down by 4.78% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 33.77 points or 0.19% to 17,784.95, Straits Times declined 24.57 points or 1.00% to 2,428.46, Hang Seng fell 136.17 points or 0.58% to 23,143.89, KOSPI dropped 0.46 points or 0.03% to 1,724.40 and Shanghai Composite declined 9.30 points or 0.33% to 2,771.34, while Jakarta Composite was up by 51.01 points or 1.13% to 4,582.70.

SEBI Registered: Investment Adviser - INA000013323

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
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Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
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SEBI Registration Number:	INA000013323 Validity - May 16, 2019 - Perpetual
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Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
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Warning: Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Disclaimer: Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provides any assurance of returns to investors.

Compliance Officer:

Name: Shrikant Jagtap

Email: shrikant.jagtap@moneyworks4me.com

Mobile No: +91 97638 00745

Grievance Officer:

Name: Mukta Vaze

Email: mukta.vaze@moneyworks4me.com

Mobile No:+91 98609 19463

Principal Officer:

Name: Atharva Bhide

Email: atharva.bhide@moneyworks4me.com

Mobile No:+91 91758 99463

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Plot No. C 4-A , G Block, Near Bank of India, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051

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The Alchemists Ark Pvt. Ltd., B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045

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