Markets witness bloodbath in early deals

Indian equity benchmarks made gap-down opening with losses of over 4% each on Monday amid rising US-China tensions over the coronavirus. Markets are trading deeply in red on rising coronavirus fears in the country. India has entered the third phase of its nationwide lockdown. The worldometer data showed that the total number of coronavirus cases in the country has reached 42,505 and there have been 1,391 fatalities so far. Barring healthcare stocks, all the sectoral indices were trading in red on BSE. Some cautiousness came in 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. Also, continuing their selling spree for the second straight month, foreign portfolio investors (FPIs) withdrew a net Rs 15,403 crore from the Indian capital markets in April amid the coronavirus crisis. Traders overlooked report that Prime Minister Narendra Modi held a series of meetings with key cabinet ministers and officials of economic ministries to firm up the second stimulus package to lift the economy reeling under the impact of coronavirus-induced lockdown.

On the global front, all the Asian markets are trading lower 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. Meanwhile, the markets in China and Japan are closed for the Labor Day and Greenery Day, respectively.

Back home, as per a report direct tax collection has surged 36.5% to Rs 34,784 crore in the first month of fiscal year 2020-21, despite a nationwide lockdown, thanks to a 63% year-on-year fall in tax refunds in April. In scrip specific developments, Reliance Industries edged down as it reported a 37.2% fall in its net profit after including exceptional items for the quarter-ended March. Tech Mahindra slumped on reporting a 29% year-on-year fall in consolidated profit for the fourth quarter.

The BSE Sensex is currently trading at 32175.74, down by 1541.88 points or 4.57% after trading in a range of 32151.95 and 32748.14. There were 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 3.19%, while Small cap index was down by 2.83%.

The sole gaining sectoral indices on the BSE was Healthcare up by 0.10%, while Metal down by 7.67%, Bankex down by 6.27%, Auto down by 5.98%, Realty down by 4.86%, Basic Materials down by 4.59% were the top losing indices on BSE.

The sole gainer on the Sensex was Sun Pharma up by 1.43%. On the flip side, ICICI Bank down by 8.63%, Tata Steel down by 8.24%, Indusind Bank down by 7.98%, Tech Mahindra down by 7.75% and Bajaj Finance down by 7.38% 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 is currently trading at 9415.75, down by 444.15 points or 4.50% after trading in a range of 9410.85 and 9533.50. There were 3 stocks advancing against 47 stocks declining on the index.

The few gainers on Nifty were Cipla up by 1.99%, Sun Pharma up by 1.87% and Dr. Reddy’s Lab up by 0.09%. On the flip side, Hindalco down by 9.98%, Tata Motors down by 9.97%, Vedanta down by 9.83%, ICICI Bank down by 9.00% and JSW Steel down by 8.66% were the top losers.

All the Asian markets are trading in red; Straits Times slipped 59.17 points or 2.25% to 2,565.06, Hang Seng declined 947.41 points or 3.84% to 23,696.18, Taiwan weighted plunged 242.51 points or 2.21% to 10,749.63, KOSPI weakened 31.57 points or 1.62% to 1,916.63 and Jakarta Composite was down by 107.36 points or 2.28% to 4,609.04.