Benchmarks end sharply lower; Nifty settles below 8,850 mark

Indian equity benchmarks ended Monday’s trade on a pessimistic note with heavy losses of around three and half percent as Union home ministry extended the lockdown for another two weeks till May 31 to contain the spread of coronavirus. Markets traded in negative note since beginning, as domestic cases of the novel coronavirus continued to rise steadily. Selling further crept in with the commerce and industry ministry’s data showing that India’s exports contracted by a record 60.28 per cent to $10.36 billion in April amid the coronavirus lockdown. Imports too tumbled by 58.65 per cent to $17.12 billion in April from $41.4 billion in the same month last year. Besides, the trade deficit narrowed to $6.76 billion. Trade deficit in April 2019 stood at $15.33 billion.

Local bourses added more losses in late afternoon session, as sentiments remained down-beat with former finance minister P Chidambaram’s statement that the fiscal stimulus package announced by the government is hopelessly inadequate given the gravity of the economic crisis as it amounts to only Rs 1.86 lakh crore, which is 0.91 percent of the GDP. He also said the stimulus package has left several sections like the poor, migrants, farmers, laborers, workers, small shopkeepers, and middle class high and dry. Traders even overlooked Finance Minister Nirmala Sitharaman’s statement that the government would frame a policy where private entities are allowed to participate in all sectors. The government will also notify a list of strategic sectors where the presence of public sector enterprises (PSEs) is required.

On the global front, Asian markets ended mostly in green on Monday, European markets were trading higher, after Federal Reserve Chair Jerome Powell expressed optimism that the US economy can begin to recover from a devastating recession in the second half of the year, assuming the coronavirus does not erupt in a second wave. Back home, stocks related to gems and jewellery sector fell with data from the Gem and Jewellery Export Promotion Council (GJEPC) indicating that gems and jewellery exports in March declined 38.81 per cent to Rs 13,744.60 crore due to weak demand in importing countries following economic slowdown and the COVID-19 pandemic. The overall exports stood at Rs 22,463.17 crore during March 2019. Sugar stocks also ended lower despite industry body ISMA said India’s sugar export is expected to normalise in the coming days amid relaxation in the COVID-19 lockdown rules. The government has allowed export of 6 million tonne of sugar under maximum admissible export quota (MAEQ) during the 2019-20 marketing year (October-September) to liquidate surplus sugar in the global markets.

Finally, the BSE Sensex fell 1068.75 points or 3.44% to 30,028.98, while the CNX Nifty was down by 313.60 points or 3.43% to 8,823.25.

The BSE Sensex touched high and low of 31,248.26 and 29,968.45, respectively and there were 4 stocks advancing against 26 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 3.87%, while Small cap index was down by 2.92%.

The top gaining sectoral indices on the BSE were IT up by 1.36% and TECK up by 0.53%, while Bankex down by 6.69%, Finance down by 6.65%, Auto down by 5.51%, Realty down by 5.22%, Capital Goods down by 4.80% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.72% and Infosys up by 1.73%. On the flip side, Indusind Bank down by 10.02%, Ultratech Cement down by 7.59%, Axis Bank down by 7.55%, HDFC down by 7.55% and ICICI Bank down by 7.44% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that the government would frame a policy where private entities are allowed to participate in all sectors. The government will also notify a list of strategic sectors where the presence of public sector enterprises (PSEs) is required.

She said, in strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed. In other sectors, PSEs will be privatised. Companies in areas such as arms and ammunition, atomic energy and CPSEs are categorised as strategic CPSEs. She said a new coherent public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four PSUs.

She mentioned ‘to minise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies

The CNX Nifty traded in a range of 9,158.30 and 8,806.75 and there were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Cipla up by 5.51%, TCS up by 2.49%, Bharti Infratel up by 2.32%, Infosys up by 1.12% and HCL Technologies up by 0.34%. On the flip side, Indusind Bank down by 9.64%, Zee Entertainment down by 9.50%, Eicher Motors down by 7.88%, BPCL down by 7.28% and Ultratech Cement down by 7.19% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 120.22 points or 2.07% to 5,919.99, France’s CAC increased 86.23 points or 2.02% to 4,363.86 and Germany’s DAX increased 280.38 points or 2.68% to 10,745.55.

Asian markets ended mostly higher on Monday as oil prices climbed to their highest in more than a month due to optimism about a gradual reopening of businesses around the world. Market sentiment were improved further by comments from US Federal Reserve Chairman Jerome Powell who said the economy stateside may need a corona virus vaccine to fully recover and a jump in US stock index futures. Chinese shares ended higher after data showed home prices rose in April outweighed renewed Sino-US trade war tensions and the threat of a second wave of corona virus infections. Japanese shares ended up on signs of a slowdown in corona virus infections in the country that raised optimism that the government would soon ease restrictions. Investors, meanwhile, shrugged off data showing that the Japanese economy slipped into a recession in the first quarter.