Benchmarks trade under pressure amid weakness in Asian peers

Indian equity benchmarks made gap-down opening on Friday following weakness in Asian peers amid concerns over coronavirus treatment and worries over economic growth of India. Markets are trading lower with cut of over a percent each in early deals. Traders were concerned with rising coronavirus cases in the country. Total COVID-19 cases in India has gone up to 21,700. This includes 16,689 active coronavirus cases, while 4324 patients have been cured/discharged. As many as 686 people have died due to coronavirus in the country. Also, there was some cautiousness with the Confederation of Indian Industry’s (CII) report that India's GDP is likely to range between a decline of 0.9% and a growth of 1.5% in the current financial year, with the economy undergoing a turbulent phase caused by the coronavirus-induced lockdown. Meanwhile, market participants are eyeing the Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman meeting to be held on April 24 to finalise a second stimulus package for industry, the poor and farmers.

 On the global front, all the Asian markets are trading lower following the lackluster cues overnight from Wall Street after private report said that Gilead Sciences' experimental coronavirus drug remdesivir flopped in its first randomized clinical trial. However, Gilead Sciences said that study was terminated early due to low enrollment and the study results were inconclusive. Globally, the number of confirmed COVID-19 cases worldwide has increased to more than 2.7 million, while the death tally rose to more than 190,400, according to data compiled by Johns Hopkins University.

Back home, refinery stocks were in focus with Crisil Rating’s report that Indian oil refiners may have incurred an inventory loss of Rs 25,000 crore in the January-March period as oil prices slumped and are now likely seeing a plunge in refining margins in the current quarter. In scrip specific development, Bharti Infratel declined as it once again extended the deadline for completion of the company's merger with Indus Towers. However, ONGC and GAIL rose as oil prices continued their rebound from historic lows reached earlier this week. MindTree rose ahead of its earnings release.

The BSE Sensex is currently trading at 31403.49, down by 459.59 points or 1.44% after trading in a range of 31278.27 and 31465.04. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.67%, while Small cap index was down by 0.69%.

The few gaining sectoral indices on the BSE were Healthcare up by 1.25%, Capital Goods up by 0.64%, Utilities up by 0.14%, FMCG up by 0.09%, while Bankex down by 2.90%, Realty down by 2.14%, Auto down by 1.08%, TECK down by 1.08%, IT down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.49%, Sun Pharma up by 2.10%, Larsen & Toubro up by 1.72%, ONGC up by 1.26% and Hero MotoCorp up by 1.22%. On the flip side, Bajaj Finance down by 5.66%, ICICI Bank down by 4.80%, Indusind Bank down by 3.62%, Axis Bank down by 3.46% and HDFC down by 3.00% were the top losers.

Meanwhile, the Confederation of Indian Industry (CII) in a paper - A plan for economic recovery - has said that India's GDP is likely to range between a decline of 0.9 percent and a growth of 1.5 percent in the current financial year (FY21), with the economy undergoing a turbulent phase caused by the coronavirus-induced lockdown. It laid out its growth expectation under three scenarios and suggested urgent fiscal interventions. It said in the baseline scenario, the Gross Domestic Product (GDP) is expected to grow at just 0.6 percent on an annual basis as economic activity is expected to remain constrained due to continuing restrictions on the free movement of goods and people beyond the lockdown period.

This will lead to disruption in supply chains, slow pick-up in investment activity, labour shortages in the short-run and muted consumption demand on account of reduced household incomes. In the optimistic scenario, which envisages a faster pick-up post the lockdown period, the GDP is forecast to register a growth of 1.5 percent in the best case. In case of a more prolonged outbreak, where the restrictions in existing hot-spot regions get extended, while new regions are identified as hot-spots leading to intermittent stop and start in economic activity, GDP is likely to decline by -0.9 percent.

Besides, the urgent fiscal interventions, as suggested by CII should include cash transfers amounting to Rs 2 lakh crore to JAM account holders, in addition to the Rs 1.7 lakh stimulus already announced. It has also suggested additional working capital limits to be provided by banks, equivalent to April-June wage bill of the borrowers, backed by a government guarantee, at 4-5 percent interest. In addition, It has suggested the creation of a fund or SPV with a corpus of Rs 1.5 lakh crore which will subscribe to NCDs/Bonds of corporates rated A and above.

The CNX Nifty is currently trading at 9204.65, down by 109.25 points or 1.17% after trading in a range of 9145.00 and 9207.55. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 3.05%, Cipla up by 2.68%, Britannia Industries up by 1.97%, Sun Pharma up by 1.92% and Larsen & Toubro up by 1.73%. On the flip side, Zee Entertainment down by 7.33%, Bajaj Finance down by 5.33%, ICICI Bank down by 4.19%, Indusind Bank down by 3.66% and Axis Bank down by 3.27% were the top losers.

All the Asian markets are trading in red; Nikkei 225 declined 145.78 points or 0.75% to 19,283.66, Straits Times slipped 21.70 points or 0.85% to 2,520.67, Hang Seng dropped 65.98 points or 0.28% to 23,911.34, Taiwan weighted fell 5.02 points or 0.05% to 10,361.49, KOSPI plunged 12.38 points or 0.65% to 1,902.35, Jakarta Composite weakened 30.70 points or 0.67% to 4,562.85 and Shanghai Composite was down by 17.92 points or 0.63% to 2,820.58.