Markets end on lower note; Nifty gives up 9,150 mark

Indian equity benchmarks remained under selling pressure throughout the day and ended with losses of over two percent on Thursday, tracking heavy sell off in overseas markets as fears of a second wave of infections overshadowed prospects of re-opening economy. Markets made gap-down opening, despite a slew of announcements made by Finance Minister Nirmala Sitharaman targeting various sectors. The FM doled out measures worth Rs 5.94 trillion, focusing largely on MSMEs, NBFCs, power discoms, and real estate sector, with more such announcements to follow throughout the week. The sentiments remained weak with former chief statistician Pronab Sen fears that the country’s gross domestic product (GDP) will contract astronomically by nine per cent in 2020-21 if the government does not go beyond the package announced by finance minister Nirmala Sitharaman.

Local barometer gauges added losses in last hour of trade, as sentiments on the street weakened further as the UN slashed India's projected growth rate to 1.2% in 2020 and forecast that the global economy will contract sharply by 3.2% as the COVID-19 pandemic paralyses the world, sharply restricting economic activities, increasing uncertainties and unleashing a recession unseen since the Great Depression of the 1930s. The street remained disappointed with Fitch Solutions stating that despite additional funding, the continued lack of medical investment and healthcare infrastructure will present challenges to mounting an effective response in India against COVID-19 pandemic. With 8.5 hospital beds per 10,000 citizens and eight physicians per 10,000, the country’s healthcare sector is not equipped for such a crisis.

On the global front, Asian markets ended mostly lower on Thursday, while European markets were trading in red, as worries about a second wave of coronavirus infections and a dour assessment of the way back from the head of the U.S. Federal Reserve dashed hopes for a quick recovery. Fed Chair Jerome Powell warned of an 'extended period' of weak economic growth, while vowing to use the U.S. central bank's power as needed and calling for additional fiscal spending to stem the fallout from the pandemic. Back home, agriculture stocks were in focus as IMD said monsoon is expected to hit Indian shores in mid-May as a low pressure area has begun to form over the southeast Bay of Bengal and adjoining south Andaman Sea.

Finally, the BSE Sensex fell 885.72 points or 2.77% to 31,122.89, while the CNX Nifty was down by 240.80 points or 2.57% to 9,142.75.

The BSE Sensex touched high and low of 31,630.94 and 31,052.65, respectively and there were 7 stocks advancing against 23 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.39%, while Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.54%, FMCG up by 0.46% and Capital Goods up by 0.14%, while IT down by 3.60%, Energy down by 3.45%, TECK down by 3.23%, Metal down by 2.76% and Utilities down by 2.67% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.28%, Ultratech Cement up by 1.65%, Maruti Suzuki up by 1.48%, Larsen & Toubro up by 0.96% and Sun Pharma up by 0.78%. On the flip side, Tech Mahindra down by 5.24%, Infosys down by 5.16%, HDFC down by 4.69%, Indusind Bank down by 4.46% and Reliance Industries down by 4.07% were the top losers.

Meanwhile, welcoming the government’s relief package for the Micro, Small and Medium Enterprise (MSME) sector, Union Minister for MSMEs and Road Transport & Highways Nitin Gadkari has said it will re-energize the cash-strapped MSME sector. He said the turnover of the village industry has been around Rs 88,000 crore, which the government aspires to take forward to Rs 5 lakh crore in the next two years. He noted that the stimulus package will help achieve this target in a big way.  He added that the khadi sector will play a big role in this as it is entering into exports also.

The minister was upbeat over the change of definition of the MSME sector. He said raising investment limit in this sector to Rs 100 crore will give great boost to the industry, which will now get easy finance from banks. He added that the sector was demanding this revision for long. He also stated that the Fund of Funds, which has a corpus of Rs 10,000 crore, will benefit over 25 lakh MSMEs under stress. Similarly, easing of global tendering norm is a remarkable step.

Gadkari expressed hope that now new orders will be received from Defence and Police for uniforms, etc. He said economic support to this sector which gives employment to over 11 crore people and contributes nearly 29 percent to the GDP, can never be forgotten by the stakeholders of this sector. He also expressed confidence that the MSME, village, and cottage industry sector will grow to new heights with the support of this package.

The CNX Nifty traded in a range of 9,281.10 and 9,119.75 and there were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 4.89%, Hero MotoCorp up by 2.93%, Zee Entertainment up by 2.18%, Larsen & Toubro up by 1.84% and Ultratech Cement up by 1.45%. On the flip side, Tech Mahindra down by 5.35%, Infosys down by 5.22%, Hindalco down by 4.82%, HDFC down by 4.61% and Indusind Bank down by 4.26% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 135.51 points or 2.3% to 5,768.54, France’s CAC fell 84.46 points or 1.94% to 4,260.49 and Germany’s DAX was down by 169.69 points or 1.61% to 10,372.97.

Asian markets ended mostly lower on Thursday, tracking overnight weakness at Wall Street after US Federal Reserve Chairman Jerome Powell warned of a prolonged recession due to the corona virus outbreak. Further, growing concerns over renewed trade tensions between the United States and China too keeping investors nervous. Japanese stocks ended lower as the safe-haven yen strengthened with investors cautiously looking ahead to the Japanese government's expected decision later today to lift the state of emergency following the outbreak of the novel corona virus in 39 of Japan's 47 prefectures. Chinese shares closed down as investors worried about a prolonged recovery in the economy, while the main US federal government retirement fund said it halted plans to invest in Chinese stocks this year amid growing criticism that the move would have hurt national security.