Weak trade continues over Dalal Street

Weak trade continued over Dalal Street in late morning deals, with both Sensex and Nifty trading in deep red. Negative cues from other Asian markets kept key indices lower in late morning session. Domestic sentiments were negative, as total of 10 companies rated by S&P Global Ratings including seven confidential issuers defaulted in Asia last year, up from three corporate defaults in 2018. Meanwhile, the total number of rated issuers in Asia increased to 911 in 2019 from 831 in 2018. The newly rated issuers in the region decreased by over 39 per cent to 87 in 2019 from 143 in 2018 amid growing concerns about the potential for a turning credit cycle, curb in economic growth or rise in interest rates. Issuance rose dramatically in the same period owing to a number of companies taking advantage of comparatively low interest rates, adding on leverage to their balance sheets in the process.

On the global front, Asian markets were trading mostly in red, after Singapore's central bank left its monetary policy unchanged on Wednesday as the economy rebounded from a technical recession in the third quarter. The Monetary Authority of Singapore decided to maintain a zero percent per annum rate of appreciation of the S$NEER policy band. The width of the policy band and the level at which it is centered will be unchanged.

The BSE Sensex is currently trading at 40347.58, down by 277.93 points or 0.68% after trading in a range of 40279.55 and 40623.19. There were 9 stocks advancing against 20 stocks declining, while 1 stock remains unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.10%, while Small cap index was down by 0.44%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.33%, Capital Goods up by 0.11%, Realty up by 0.05% and Telecom up by 0.01%, while Utilities down by 1.88%, Power down by 1.77%, PSU down by 1.54%, Oil & Gas down by 1.54% and IT down by 1.18% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.86%, Tata Steel up by 1.13%, Bajaj Auto up by 1.09%, Titan Company up by 0.65% and Bajaj Finance up by 0.52%. On the flip side, NTPC down by 4.41%, ONGC down by 2.90%, Power Grid down by 2.30%, Infosys down by 1.55% and Maruti Suzuki down by 1.39% were the top losers.

Meanwhile, Niti Aayog CEO Amitabh Kant said that the government has been working on multiple fronts to position India as a truly global manufacturing hub with a strong focus on exports. He further said the government is finalising its plans to expand its production-linked incentive (PLI) scheme to more sectors for boosting domestic manufacturing. He said ‘the Government of India has been working on multiple fronts to position India as a truly global manufacturing hub with a strong focus on exports...Aatmanirbhar Bharat does not mean self-isolation but a very deep integration into the global value chains and using the manufacturing strength of India to become a leading exporter globally’.

Kant noted that investment and innovation will drive manufacturing in India. He said ‘both countries and companies are reevaluating their trade and manufacturing strategies which can serve as new avenues of growth in India’. He pointed out that the PLI scheme for mobile and select electronics will have multiplier impact for both direct and indirect job. As many as 22 domestic and international manufacturing firms including iPhone maker Apple's contract manufacturers as well as Samsung, Lava, Dixonhave given proposals for mobile phone production worth Rs 11 lakh crore over the next five years. And taking mobile manufacturing as a template, similar schemes have been launched in pharmaceutical, medical devices and now we are finalising schemes for automobile, networking products, food processing, advanced chemistry and solar PV manufacturing.

The government has notified PLI scheme for large scale electronics manufacturing, the scheme for promotion of manufacturing of electronic components and semiconductors, and the modified electronics manufacturing clusters (EMC 2.0) scheme. Kant said India is keen on creating truly global manufacturing champions in sectors of strength through benchmarking, cost disabilities against other manufacturing hubs and developing a bespoke strategy for each sector. He highlighted that manufacturing will lead India's export targets by 2025 in key sectors, including mobile, electronics, pharmaceutical, textiles, engineering products, etc. Noting that data must be transformed into actionable insights to create value for governments and businesses, Kant said technologies such as artificial intelligence and augmented reality should be used as virtual means to train people.

The CNX Nifty is currently trading at 11843.00, down by 91.50 points or 0.77% after trading in a range of 11822.15 and 11919.80. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 1.92%, Britannia up by 1.17%, Bajaj Auto up by 1.13%, Tata Steel up by 0.84% and Titan Company up by 0.68%. On the flip side, Wipro down by 5.75%, NTPC down by 4.36%, Tata Motors down by 3.21%, Coal India down by 3.21% and ONGC down by 3.11% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 66.28 points or 0.27% to 24,583.40, Taiwan Weighted dropped 28.55 points or 0.22% to 12,918.58, KOSPI fell 18.19 points or 0.76% to 2,384.96, Shanghai Composite declined 18.02 points or 0.54% to 3,341.73 and Straits Times trembled 14.17 points or 0.55% to 2,553.48. On the flip side, Nikkei 225 surged 10.07 points or 0.04% to 23,611.85 and Jakarta Composite soared 15.51 points or 0.3% to 5,148.08.