Markets trade lower with cut of around 2% amid weakness in Asian peers

Indian equity benchmarks made pessimistic start of new week following weakness in Asian peers and surge in crude oil prices. Markets extended their losses and are trading lower with cut of around 2% each in early deals on Monday.  Selling pressure in Auto, Realty and Consumer Discretionary counters pulled down the domestic indices. Investors are eyeing consumer inflation for the month of March due out later in the day for further direction. Traders were concerned with rising coronavirus cases in India. According to the Worldometer, in the country, the confirmed coronavirus cases jumped to 9,205 and the death toll mounted to 331 so far. Also, there was cautiousness as the World Bank said India is likely to record its worst growth performance since the 1991 liberalisation this fiscal year as the coronavirus outbreak severely disrupts the economy. Besides, overseas investors pulled out a net Rs 9,103 crore from the Indian markets in April so far as the Covid-19 crisis triggered a return to safe haven assets like gold and dollar-denominated securities. Meanwhile, amid high volatility in international markets, India has pitched for a stable oil market that provides reasonable price for producers and affordable rate for consumers.

Global markets remained weak with all the Asian markets trading lower in the absence of fresh cues from Wall Street and European markets, which were closed for the Good Friday holiday, and amid worries about the impact of the coronavirus pandemic on the global economy. According to data released by Johns Hopkins University, the number of coronavirus infection cases worldwide has risen to 1.84 million, while the death toll stood at more than 114,000. Investors also digested reports that OPEC and its allies, known as OPEC+, agreed to cut oil production by a record 9.7 billion barrels per day for May and June.

Back home, banking stocks were in focus with a private report that the Reserve Bank of India (RBI) may stipulate stricter timelines to identify the managing director (MD) and chief executive officer (CEO)-designates in private banks and for them to settle down in their new roles. Also, RBI data showed that bank credit growth decelerated to an over five-decade low of 6.14% in the fiscal ended March 31, 2020, amid a faltering economy, lower demand and risk aversion among banks. In scrip specific development, Sagar Cements jumped despite reports that the company’s cement sales in March declined by 31.76% to 166,956 MT, while cement production fell 29.27% to 182,756 MT, Y-o-Y.

The BSE Sensex is currently trading at 30566.44, down by 593.18 points or 1.90% after trading in a range of 30566.23 and 31195.72. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.60%, while Small cap index was down by 1.39%.

The few gaining sectoral indices on the BSE were Telecom up by 1.22% and Healthcare up by 0.29%, while Auto down by 4.07%, Realty down by 3.56%, Consumer Discretionary down by 3.41%, Consumer Durables down by 3.11%, Oil & Gas down by 2.56% were the losing indices on BSE.

The few gainers on the Sensex were Bharti Airtel up by 1.91%, Infosys up by 0.44% and Larsen & Toubro up by 0.10%. On the flip side, Bajaj Finance down by 7.61%, Mahindra & Mahindra down by 6.27%, Maruti Suzuki down by 5.06%, Bajaj Auto down by 4.30% and ONGC down by 3.75% were the top losers.

Meanwhile, the World Bank said in its South Asia Economic Focus report has said that India may record its worst growth performance since the 1991 liberalisation this fiscal year (FY21) as the coronavirus outbreak severely disrupts the economy. It said India's economy is expected to grow 1.5 per cent to 2.8 per cent in FY21. It estimated India will grow 4.8 per cent to 5 per cent in the FY20 that ended on March 31.

Further, it said that the COVID-19 outbreak came at a time when India's economy was already slowing due to persistent financial sector weaknesses. To contain it, the government imposed a lockdown, shutting factories and businesses, suspending flights, stopping trains and restricting mobility of goods and people. The resulting domestic supply and demand disruptions (on the back of weak external demand) are expected to result in a sharp growth deceleration in FY21. The services sector will be particularly impacted.

Besides, it said that a revival in domestic investment is likely to be delayed given enhanced risk aversion on a global scale, and renewed concerns about financial sector resilience. Growth is expected to rebound to 5% in FY22 as the impact of COVID-19 dissipates, and fiscal and monetary policy support pays off with a lag.

The CNX Nifty is currently trading at 8942.40, down by 169.50 points or 1.86% after trading in a range of 8932.90 and 9112.05. There were 5 stocks advancing against 44 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 2.12%, Cipla up by 1.60%, Larsen & Toubro up by 1.32%, Infosys up by 1.12% and Bharti Airtel up by 1.01%. On the flip side, Zee Entertainment down by 9.98%, Bajaj Finance down by 8.38%, Mahindra & Mahindra down by 6.29%, Maruti Suzuki down by 5.62% and ONGC down by 4.08% were the top losers.

Asian markets are trading in red; Nikkei 225 slipped 274.68 points or 1.41% to 19,223.82, Straits Times fell 2.60 points or 0.10% to 2,568.72, Taiwan weighted declined 9.51 points or 0.09% to 10,148.10, KOSPI weakened 18.39 points or 0.99% to 1,842.31, Jakarta Composite decreased 18.95 points or 0.41% to 4,630.13 and Shanghai Composite was down by 9.35 points or 0.33% to 2,787.28.