Sell-off continues in domestic equities in late morning deals

Indian equity benchmarks continued to trade deeply in red in the late morning session on account of selling witnessed in front line blue chip stocks. Stocks from Bankex, TECK and IT counters were trading lower, while Energy, Healthcare and Capital Goods counters were trading higher. Traders’ mood remained subdued after a potential antiviral drug for the corona virus has reportedly failed in its first randomised clinical trial. Sentiments were also dented 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 concerned that the sharp rise in corona virus cases could weigh on the global as well as domestic economy.

On global front, Asian markets were trading lower amid doubts about progress in the development of drugs to treat COVID-19 and new evidence of U.S. economic damage caused by the coronavirus pandemic. Back home, the overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1298: 672; while 129 shares remained unchanged.

The BSE Sensex is currently trading at 31451.23, down by 411.85 points or 1.29% after trading in a range of 31278.27 and 31544.90. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.99%, while Small cap index was down by 0.82%.

The top gaining sectoral indices on the BSE were Energy up by 2.12%, Healthcare up by 1.21%, Capital Goods up by 0.64%, Oil & Gas up by 0.35%, Metal up by 0.14%, while Bankex down by 2.75%, TECK down by 2.55%, IT down by 2.44%, Telecom down by 2.43%, Realty was down by 2.02% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.73%, ONGC up by 2.60%, Hero MotoCorp up by 2.03%, Sun Pharma up by 1.56% and Larsen & Toubro was up by 1.42%. On the flip side, Bajaj Finance down by 5.61%, Indusind Bank down by 4.82%, ICICI Bank down by 4.52%, HDFC down by 4.19% and Axis Bank was down by 3.61% were the top losers.

Meanwhile, rating agency ICRA in its latest report has stated that the performance of the hospital sector has considerably affected due to Coronavirus disease (COVID-19) pandemic, with occupancy falling from 60-70% in weeks just preceding the spread of Covid-19 to 25-30%. It also warned that revenues are expected to decline by over 50% and the high operating leverage inherent in hospital business, coupled with sharp drop in revenues is expected to translate into losses for the players in Q1 FY2021.

According to the report, the travel and visa restrictions have impacted the flow of international patients, the out-patient department visits have been significantly curtailed, elective procedures have been postponed, and in a majority of the private sector hospitals, the infrastructure reserved for COVID-19 patients remains under-utilised. It noted that the short-term outlook for the sector has turned negative due to a sharp fall in volumes - both in the OPD and the IPD.

However, ICRA continue to maintain the stable outlook for the long term as it believes the performance of healthcare companies will remain robust over the long run due to favourable supply-demand dynamics, an ageing demographic profile, the rising per capita income, increasing penetration of medical insurance, rising healthcare awareness and double-digit growth in medical tourism (excluding the period of impact of COVID-19).

The CNX Nifty is currently trading at 9198.55, down by 115.35 points or 1.24% after trading in a range of 9145.00 and 9227.75. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.89%, Vedanta up by 2.58%, ONGC up by 2.45%, Hero MotoCorp up by 2.16% and Larsen & Toubro was up by 1.71%. On the flip side, Bharti Infratel down by 7.44%, Zee Entertainment down by 6.25%, Bajaj Finance down by 5.39%, Indusind Bank down by 4.81% and ICICI Bank was down by 4.43% were the top losers.

All Asian Markets were trading down; Taiwan Weighted dropped 19.15 points or 0.18% to 10,347.36, KOSPI fell 24.00 points or 1.25% to 1,890.73, Shanghai Composite declined 27.09 points or 0.95% to 2,811.41, Hang Seng decreased 119.33 points or 0.5% to 23,857.99, Jakarta Composite lost 37.34 points or 0.81% to 4,556.21, Straits Times trembled 21.43 points or 0.84% to 2,520.94 and Nikkei 225 was down by 167.44 points or 0.86% to 19,262.00.