Markets snap four-day gaining streak; Nifty slips below 9,300 mark

Pausing four-day gaining streak, Indian equity benchmarks ended Monday’s session sharply bearish with losses of around six percent, tracking weak cues from overseas, that fell on fresh cues of US-China trade war. Domestic indices opened deep in the red, as the government extended the lockdown for another two weeks in an attempt the arrest the spread of coronavirus. Sentiments also remained dampened with government data showing that India’s core sector output contracted 6.5% in March, marking the worst performance by the key infrastructure areas going back to 2005, as the nationwide lockdown to combat the spread of Covid-19 stalled the economy. Weak company results have also kept investors on the edge as companies keep posting sharp profit drops in the March quarter.

The bourses continued to bleed further in late hour of trade and ended near day’s low point, as Indian manufacturing activity growth declined sharply in the month of April 2020, amid national lockdown restrictions to help stem the spread of the coronavirus disease 2019 (COVID-19), which in turn led to widespread business closures. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance -fell to 27.4 in April from 51.8 in March. Adding to the pain, the CEOs Snap Poll survey conducted by the Confederation of Indian Industry (CII) stated that the lockdown imposed to prevent the spread of COVID-19 has had an impact on economy and industries in the country due to which the majority of the firms are anticipating a significant decline in their top line, and foresee a delay in economic revival and demand recovery.

On the global front, Asian markets ended in red on Monday, on rising tensions between the US and China over the coronavirus pandemic. US Secretary of State Mike Pompeo said that there was a ‘significant amount of evidence’ linking the coronavirus to a lab in China's Wuhan region. European markets were trading in red, as a survey showed manufacturing activity in the eurozone collapsed last month as government-imposed lockdowns to stop the spread of the new coronavirus forced factories to close and consumers to stay indoors. IHS Markit's final Manufacturing Purchasing Managers' Index (PMI) for the eurozone sank to 33.4 from March's 44.5, its lowest since the survey began in mid-1997, below an earlier flash reading of 33.6 and significantly below the 50 marks separating growth from contraction. Back home, Sugar stocks were in focus with ISMA’s report that India's sugar production fell 20% to 258.01 lakh tonne in the current marketing year ending September due to lower cane output, while sales plummeted during the last two months because of the lockdown.

Finally, the BSE Sensex lost 2002.27 points or 5.94% to 31,715.35, while the CNX Nifty was down by 566.40 points or 5.74% to 9,293.50.

The BSE Sensex touched high and low of 32,748.14 and 31,632.02, respectively and there were 2 stocks advancing against 28 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 4.25%, while Small cap index was down by 3.14%.

The only gaining sectoral indices on the BSE were Telecom up by 2.39% and Healthcare up by 0.21%, while Finance down by 8.26%, Bankex down by 8.25%, Metal down by 8.23%, Consumer Durables down by 7.13%, Realty down by 6.90%, Auto down by 6.88% were the top losing indices on BSE.

The only gainers on the Sensex were Bharti Airtel up by 3.49% and Sun Pharma up by 0.04%. On the flip side, ICICI Bank down by 10.96%, Bajaj Finance down by 10.21%, HDFC down by 10.08%, Indusind Bank down by 9.58% and Axis Bank down by 9.40% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has called upon Indian missions to play an important role in identifying business opportunities for domestic companies, exporters and make India a preferred investment destination. The minister, along with External Affairs Minister S Jaishankar, was interacting with 131 missions from different geographies. Missions need to start networking, communicating with companies, come up with business leads and new contacts, and identify technology which can be implemented in India and fight for India in their countries.

All the missions have been asked to send a proposal to look at the opportunity post COVID-19. The proposal should have innovative ideas and should be submitted, containing suggestions to improve the exports. Goyal said that all should work to convert this COVID-19 situation into an opportunity by coming up with new reforms to improve domestic industries. 

He said around 100 countries have benefited from Indian pharma. He added all nations are searching for countries which have a transparent dealing, rule of law, and are reliable. He said ‘Indian missions should help us with identification of business opportunities that exist in their countries.’ Further, he said the Department for Promotion of Investment and Internal Trade is working to create a genuine single window for setting up factories and manufacturing units.

The CNX Nifty traded in a range of 9,533.50 and 9,266.95 and there were 3 stocks advancing against 47 stocks declining on the index.

The few gainers on Nifty were Cipla up by 3.71%, Bharti Airtel up by 3.24% and Sun Pharma up by 0.33%. On the flip side, Hindalco down by 10.68%, ICICI Bank down by 10.56%,Vedanta down by 10.44%, Bajaj Finance down by 9.99% and HDFC down by 9.98% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 12.68 points or 0.22% to 5,750.38, France’s CAC fell 186.03 points or 4.07% to 4,386.15 and Germany’s DAX was down by 376.48 points or 3.47% to 10,485.16.

Asian markets ended lower on Monday on renewed US-China tensions after US President Donald Trump threatened to impose new tariffs on China in retaliation over the corona virus outbreak. US Secretary of State Mike Pompeo said there was a significant amount of evidence that the new corona virus emerged from a laboratory in the Chinese city of Wuhan. Meanwhile, Japanese and Chinese markets were closed for public holidays. Further, Seoul shares ended lower amid an escalation of tension on the Korean peninsula, with reports showing the two Koreas exchanged gunfire at the demilitarized zone separating the two sides.