MENU

Published on 1/04/2020 5:13:34 PM | Source: LKP Securities

Indian Benchmarks End First Day Of FY21 On Gloomy Note - LKP Securities

Posted in Market Outlook| #Market Outlook #LKP Securities Ltd

Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel  https://t.me/InvestmentGuruIndia 

Download Telegram App before Joining the Channel

Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel https://t.me/InvestmentGuruIndia 

Download Telegram App before Joining the Channel

A day after logging healthy gains, Indian equity benchmarks were back in the negative territory and ended with losses of over four percent on Wednesday, as the number of domestic coronavirus cases increased even as a 21-day lockdown remained in force. Domestic stocks started the first day of the fiscal year 2020-21 on lower note, tracking bearish trend from global indices. Traders turned wary with report that the government has missed the collection target for the current financial year from CPSE disinvestment set in the Revised Estimates of Budget by about Rs 14,700 crore. Sentiments also remained dampened with a report showing that the government's fiscal deficit touched 135.2% of the full-year target at February-end mainly due to slower pace of revenue collections.

The bourses extended their free fall in late hour of trade, as anxiety remained among traders with the Reserve Bank releasing data relating to India's International Investment Position (IIP) for December, which showed a marginal improvement in the ratio of foreign assets to foreign liabilities. The ratio of India's international financial assets to international financial liabilities improved to 62.1 per cent at the end of December 2019, up from 60.5 per cent in September. Traders overlooked the government data showing that eight core sector industries recorded a growth of 5.5% in February, highest in 11-months, mainly due to healthy expansion in output of coal, refinery products and electricity. Meanwhile, in order to deal with the economic disruption caused by coronavirus pandemic, the Reserve Bank of India (RBI) has unveiled further measures including extension of realisation period of export proceeds, review of Limits of Way and Means Advances of States/UTs and implementation of countercyclical capital buffer.

On the global front, Asian markets ended lower on Wednesday, while European markets were trading in red with growing evidence of the economic damage from the still rapidly spreading coronavirus fanning fears of a deep global recession. Back home, Telecom stocks were in focus after industry body COAI said Telecom operators believe that there is no requirement of additional spectrum to maintain stability and quality of networks amid the 21-day nationwide lockdown imposed to combat the spread of coronavirus.

Finally, the BSE Sensex lost 1203.18 points or 4.08% to 28,265.31, while the CNX Nifty was down by 343.95 points or 4.00% to 8,253.80.  

The BSE Sensex touched high and low of 29,505.98 and 28,073.43, 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 2.18%, while Small cap index was down by 1.06%.

The top losing sectoral indices on the BSE were IT down by 5.58%, TECK down by 5.51%, Bankex down by 5.31%, Telecom down by 4.09%, Finance down by 3.80%.

The top gainers on the Sensex were Hero MotoCorp up by 2.21%, Bajaj Auto up by 1.12%, Bajaj Finance up by 0.40% and Titan Company up by 0.35%. On the flip side, Tech Mahindra down by 9.21%, Kotak Mahindra Bank down by 8.81%, TCS down by 6.23%, Infosys down by 5.65% and Axis Bank down by 5.50% were the top losers.

Meanwhile, in order to deal with the economic disruption caused by coronavirus pandemic, the Reserve Bank of India (RBI) has unveiled further measures including extension of realisation period of export proceeds, review of Limits of Way and Means Advances of States/UTs and implementation of countercyclical capital buffer.

Presently value of the goods or software exports made by the exporters is required to be realized fully and repatriated to the country within a period of 9 months from the date of exports. In view of the disruption caused by the COVID-19 pandemic, the time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 15 months from the date of export. The measure will enable the exporters to realise their receipts, especially from COVID-19 affected countries within the extended period and also provide greater flexibility to the exporters to negotiate future export contracts with buyers abroad.

Besides, RBI had constituted an Advisory Committee to review the Ways and Means limits for State Governments and Union Territories (UTs). Pending submission of the final recommendations by the Committee, it has been decided to increase WMA limit by 30 percent from the existing limit for all States/UTs to enable the State Governments to tide over the situation arising from the outbreak of the COVID-19 pandemic. The revised limits will come into force with effect from April 1, 2020 and will be valid till September 30, 2020.

Further, the framework on countercyclical capital buffer (CCyB) was put in place by the Reserve Bank in terms of guidelines issued on February 5, 2015 wherein it was advised that the CCyB would be activated as and when the circumstances warranted, and that the decision would normally be pre-announced. The framework envisages the credit-to-GDP gap as the main indicator, which is used in conjunction with other supplementary indicators. Based on the review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB for a period of one year or earlier, as may be necessary.

The CNX Nifty traded in a range of 8,588.10 and 8,198.35 and there were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 2.48%, Bajaj Auto up by 1.02%, Bajaj Finance up by 1.02% and Titan Company up by 0.13%. On the flip side, Tech Mahindra down by 9.40%, Kotak Mahindra Bank down by 8.68%, Axis Bank down by 6.20%, TCS down by 6.14% and UPL down by 5.97% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 204.01 points or 3.6% to 5,467.95, France’s CAC decreased 153.28 points or 3.49% to 4,242.84 and Germany’s DAX decreased 301.40 points or 3.03% to 9,634.44.

Asian markets ended lower on Wednesday after the US Trump administration warned that the next two weeks will be ‘very painful’ in the US in terms of deaths from the novel corona virus. Chinese shares ended down as the National Health Commission reported 36 new cases of corona virus infection for the mainland, despite surprise upbeat manufacturing data for March. China’s official PMI in March rose to 52.0, indicating expansion, after February’s record low of 35.7 due to the strict measures taken to stem the spread of corona virus. According to the survey conducted by IHS Markit, the manufacturing Purchasing Managers' Index rose to 50.1 in March from 40.3 in February. Japanese shares ended lower as the safe-haven yen strengthened. While, selloff fuelled further after the Bank of Japan's Tankan survey showed sentiment among Japan's large manufacturers deteriorated to the lowest level in seven years after the corona virus pandemic disrupted global supply chains and dampened demand.

 

For More  LKP Securities Ltd Disclaimer  http://www.lkpsec.com/

 

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer