Domestic indices witness bloodbath in early deals

Indian equity benchmarks made pessimistic start on Monday and extended their losses in early deals amid rising coronavirus cases in the country. Markets witnessed bloodbath with losses of over 2% each amid cautiousness as Union home ministry extended the lockdown for another two weeks till May 31 to contain the spread of coronavirus. The number of new cases topped 5,000 in a single day for the first time on May 17 on the back of another explosion in Maharashtra, which reported a record 2347 fresh infections, while as many as 154 death from the virus reported on May 17. Traders were concerned 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. Market participants overlooked slew of measures announced by Finance Minister Nirmala Sitharaman to boost the economy amid the coronavirus-led disruption.

On the global front, most of the Asian markets are trading in green following the positive cues from Wall Street Friday in a volatile session and on higher commodity prices. Optimism as more countries reopen their economies following coronavirus-induced lockdowns and hopes of more global stimulus measures also lifted stocks. Meanwhile, Japan's gross domestic product shrank a seasonally adjusted 0.9% on quarter in the first quarter of 2020. That exceeded expectations for a 1.2% drop following the 1.8% decline in the previous three months.

Back home, power stocks were in focus with Power Minister R K Singh’s statement that the revised tariff policy has been cleared by a group of ministers and it is likely to be implemented within a month. The policy provides for steps like penalty for unscheduled power cuts by distribution companies. In scrip specific developments, KNR Constructions and Sterling and Wilson jumped on winning new work contracts. Reliance Industries was in focus after it announced the sale of 1.34 percent stake in Jio Platforms to global equity firm General Atlantic for Rs 6,598.38 crore. However, Bharti Airtel and Torrent Power were trading in red ahead of their earnings results due today.

The BSE Sensex is currently trading at 30344.59, down by 753.14 points or 2.42% after trading in a range of 30342.92 and 31248.26. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.89%, while Small cap index was down by 1.41%.

The only gaining sectoral indices on the BSE were IT up by 0.36%, TECK up by 0.06% while, Bankex down by 4.37%, PSU down by 3.23%, Realty down by 3.20%, Capital Goods down by 3.18%, Metal down by 3.16% were the losing indices on BSE.

The only gainers on the Sensex were Infosys up by 1.19% and TCS up by 0.36%. On the flip side, ICICI Bank down by 5.66%, Axis Bank down by 4.55%, Indusind Bank down by 4.13%, Maruti Suzuki down by 4.12% and SBI down by 4.12% 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 is currently trading at 8937.55, down by 199.30 points or 2.18% after trading in a range of 8936.90 and 9158.30. There were 4 stocks advancing against 46 stocks declining on the index.

The few gainers on Nifty were Cipla up by 2.57%, Bharti Infratel up by 1.73%, Infosys up by 1.05% and TCS up by 0.29%. On the flip side, Zee Entertainment down by 6.55%, ICICI Bank down by 6.23%, Coal India down by 5.48%, Maruti Suzuki down by 4.84% and Larsen & Toubro down by 4.72% were the top losers.

Asian markets are trading mostly higher; Nikkei 225 surged 111.90 points or 0.56% to 20,149.37, Straits Times jumped 21.15 points or 0.84% to 2,544.70, Hang Seng rose 94.77 points or 0.40% to 23,892.24, KOSPI soared 13.47 points or 0.70% to 1,940.75 and Shanghai Composite gained 17.37 points or 0.61% to 2,885.83. On the other hand, Taiwan Weighted dropped 13.10 points or 0.12% to 10,801.82 and Jakarta Composite was down by 3.84 points or 0.09% to 4,503.77.