Markets trade lower in early deals amid rising coronavirus cases

Indian equity benchmarks made gap-down start on Monday following sell-off in the global markets as investors fretted about rising coronavirus cases both at home and abroad. Markets are trading lower with cut of around a percent each in early deals. Selling in metal banking and capital goods stocks weighted down on the BSE Sensex. Traders were cautious as the Union Health Ministry said India recorded its biggest surge in the number of coronavirus cases in 24 hours for a second consecutive day with 19,906 new patients, taking the total to 5,28,859 infections. The country also witnessed 410 COVID-19-related deaths during the period, taking the total number of casualties due to the virus to 16,095. Adding more pessimism, S&P Global Ratings said that the Indian economy is in deep trouble with growth expected to contract by 5 percent in this year. It added that difficulties in containing the virus, an anemic policy response, and underlying vulnerabilities, especially across the financial sector, are leading us to expect growth to fall this year before rebounding in 2021. Market participants largely overlooked Commerce and Industry Minister Piyush Goyal’s statement that adoption of technology and the digital economy would play a vital role in transforming business enterprises in the future and achieving the target of $5 trillion economy.

On the global front, all the Asian markets are trading lower following the negative cues from Wall Street Friday and on worries that a surge in the coronavirus cases worldwide could lead to the re-imposition of lockdowns and other containment measures. According to data from Johns Hopkins University, the number of coronavirus cases worldwide has surpassed 10 million, while the global death toll from the pandemic is more than 500,000. Besides, the Ministry of Economy, Trade and Industry said that retail sales in Japan were down 12.3 percent on year in May. That missed expectations for a drop of 11.6 percent following the 13.7 percent decline in the previous month.

Back home, banking stocks were buzzing as the Reserve Bank has decided to extend the enhanced borrowing facility provided to the banks to meet their liquidity shortages till September 30, amid the ongoing economic woes created by the coronavirus pandemic. Most of the aviation stocks were trading in red as the aviation regulator DGCA said it is extending the suspension of scheduled international passenger flights in the country till July 15. In scrip specific developments, ITC advanced reporting a 9% rise in standalone net profit for the March quarter. However, NTPC edged down as it reported a 71.2% year-on-year plunge in standalone net profit for the March quarter.

The BSE Sensex is currently trading at 34855.40, down by 315.87 points or 0.90% after trading in a range of 34817.81 and 34958.90. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.60%, while Small cap index was down by 0.65%.

The few gaining sectoral indices on the BSE were FMCG up by 0.88%, Healthcare up by 0.38%, Utilities up by 0.14%, while Metal down by 2.22%, Bankex down by 1.80%, Capital Goods down by 1.32%, Consumer Durables down by 1.20%, Industrials down by 1.16% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.46%, Sun Pharma up by 0.82%, Nestle up by 0.61%, Hindustan Unilever up by 0.41% and Power Grid up by 0.34%. On the flip side, Bajaj Finance down by 3.87%, Axis Bank down by 3.53%, Indusind Bank down by 2.56%, Bajaj Finserv down by 2.47% and ICICI Bank down by 2.01% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that adoption of technology and the digital economy is going to play a vital role in not only transforming the business enterprises in the future, but also in achieving the target of $5 trillion economy. He said this while addressing the 49th governing council meeting of National Productivity Council (NPC), an autonomous body under the Department for Promotion of Industry & Internal Trade (DPIIT).

The minister also stressed the role of productivity in the transformation of any organisation. He also suggested NPC work closely with all the stakeholders and emphasised on adopting the best practices from around the world.

Some of the suggestions made in the meeting include the formulation of specific action plans by NPC especially in agriculture and logistics sectors, identification of champion sectors which has the potential to drive the economy, adoption of technology to increase productivity and delivering cost-effective solutions for the marginalised sector. Interlinking of academia and industry for the creation of a highly skilled labour force, financing of specific products to support Micro, Small, and Medium Enterprises (MSMEs) and increase their productivity, and national audit on security impact.

The CNX Nifty is currently trading at 10267.05, down by 115.95 points or 1.12% after trading in a range of 10264.85 and 10325.90. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were ITC up by 2.05%, Cipla up by 1.33%, Nestle up by 1.09%, Sun Pharma up by 0.84% and Britannia Industries up by 0.41%. On the flip side, Bajaj Finance down by 4.49%, Axis Bank down by 4.12%, Coal India down by 3.69%, Bharti Infratel down by 3.42% and Hindalco down by 3.18% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 478.73 points or 2.13% to 22,033.35, Straits Times declined 24.81 points or 0.95% to 2,579.70, Hang Seng weakened 355.53 points or 1.45% to 24,194.46, Taiwan Weighted dropped 141.51 points or 1.21% to 11,519.16, KOSPI fell 36.13 points or 1.69% to 2,098.52, Jakarta Composite lost 35.67 points or 0.73% to 4,868.17 and Shanghai Composite was down by 21.09 points or 0.71% to 2,958.46.