Published on 29/06/2020 5:28:02 PM | Source: LKP Securities Ltd

Markets end on a lower note; Nifty drifts below 10,350 mark - LKP Securities

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

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Indian equity benchmarks traded with negative bias throughout the day and settled Monday’s session with losses of over half percent, on the back of sustained selling activities by market-participants. Markets made gap-down opening, as traders remained concern with S&P Global Ratings stating 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. The street remained disappointed with private report stating that extended period of the lockdown and increase in COVID-19 positive cases will have a strong impact on the economic growth, while supply chain disruption is expected to keep food prices at elevated levels.

Key gauges continued their weak trade during afternoon deals, as India's foreign exchange reserves retreated from a life-time high to touch $505.566 billion in the week ended June 19, down by $2.078 billion from the previous week. Further, geopolitical tensions like India-China border issue and US-China trade tiff kept participants on edge. However, markets managed to pare most of their losses in late trade, taking support from 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. Some support also came with the India Meteorological Department’s statement that the Southwest Monsoon has covered the entire country nearly two weeks ahead of its schedule.

On the global front, Asian markets ended mostly lower on Monday, following the negative cues from Wall Street and on worries that a surge in the coronavirus cases worldwide could lead to the re-imposition of lockdowns and other containment measures. However, European markets were trading mostly in green, as investors clung to hopes of a quicker economic recovery in the continent even as coronavirus cases surged globally. Back home, Aviation stocks were focus as the aviation regulator DGCA said it is extending the suspension of scheduled international passenger flights in the country till July 15 but added that some international scheduled services on selected routes may be permitted on a case to case basis. Telecom stocks were also buzzing as Industry body COAI urged the government for urgent rationalisation of high burden of regulatory levies on telecom service providers (TSPs), including a cut in spectrum charges and licence fee, as it cited adverse impact of the Covid-19 pandemic on the sector.

Finally, the BSE Sensex lost 209.75 points or 0.60% to 34,961.52, while the CNX Nifty was down by 70.60 points or 0.68% to 10,312.40.

The BSE Sensex touched high and low of 35,032.36 and 34,662.06, respectively and there were 9 stocks advancing against 21 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.39%, while Small cap index was down by 1.23%.

The few gaining sectoral indices on the BSE were Telecom up by 1.38% and FMCG up by 0.84%, while Realty down by 2.94%, Metal down by 2.53%, Capital Goods down by 2.34%, Industrials down by 1.89% and Power down by 1.79% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.97%, Hindustan Unilever up by 1.30%, Kotak Mahindra Bank up by 1.27%, Bharti Airtel up by 1.24% and ITC up by 1.08%. On the flip side, Axis Bank down by 4.78%, Tech Mahindra down by 3.47%, SBI down by 2.87%, Larsen & Toubro down by 2.65% and Indusind Bank down by 2.50% 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 traded in a range of 10,337.95 and 10,223.60 and there were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 2.13%, HDFC Bank up by 1.80%, Cipla up by 1.43%, Kotak Mahindra Bank up by 1.41% and ITC up by 1.23%. On the flip side, Coal India down by 4.96%, Axis Bank down by 4.70%, Tech Mahindra down by 3.18%, Hindalco down by 3.14% and SBI down by 2.79% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 12.32 points or 0.2% to 6,171.62 and Germany’s DAX rose 30.20 points or 0.25% to 12,119.59, while France’s CAC was down by 2.86 points or 0.06% to 4,906.78.

Asian markets ended mostly lower on Monday as fears that continued rise in corona virus cases could lead to second wave of infections and the re-imposition of lockdowns globally. Data from Johns Hopkins University showed that the number of corona virus cases worldwide has surpassed 10 million, with death toll topped at more than 500,000. The Wall Street Journal reported that the Phase One Sino-US trade deal could be at risk, too weighed on investors' sentiment. Banks paced the declines after the Federal Reserve limited dividend payments and barred share repurchases until at least the fourth quarter following its annual stress test. Japanese shares ended down after data showed retail sales in the country fell an annual 12.3 percent in May from a year earlier, missed expectations for a drop of 11.6 percent following the 13.7 percent decline in the previous month.


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