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Markets to get positive start tracking Asian peers
Feb-19-2020

Indian markets ended lower for fourth consecutive session on Tuesday as the ongoing AGR issue weighed on telecom and financial stocks. Today, the benchmarks are likely to make an optimistic start tracking Asian peers. Traders will be taking encouragement with Finance Minister Nirmala Sitharaman’s statement that the government will soon announce measures to deal with the impact of Coronavirus outbreak on the domestic industry. Besides, Indian business leaders are demanding cuts in import duties on antibiotic drugs, mobile parts and other items as the outbreak of the coronavirus has disrupted supplies from China. Some support will also come with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is no reason to doubt that the government will be able to cut fiscal deficit to 3.5% of the GDP in the fiscal beginning April 1. Das said the Budget for 2020 had announcements that certain bonds will be opened up for non-resident investment without any limit. Market participants may take note of report that the country's Special Economic Zones have achieved $100 billion dollar worth of exports in FY 2019-20 amidst volatile global economy. Though, there may be some cautiousness as Moody's lowered growth forecast for the Asia-Pacific (Apac) region to 5.2% for 2020 citing the lingering impact of the coronavirus outbreak in China, the impact of which will be more pronounced on China and India. Investors may react to report that US President Donald Trump has said he is saving the big deal with India for later and he does not know if it will be done before the presidential election in November, clearly indicating that a major bilateral trade deal during his visit to Delhi next week might not be on the cards. There will be some buzz in the mining stocks with Union Coal and Mines Minister Pralhad Joshi’s statement that the government looks to stop the substitutable import of thermal coal from 2023-24. Agriculture stocks will be on focus with the government’s latest data showing that India is set to harvest a record wheat production of 106.21 million tonne in 2019-20 crop year on the back of good rains.

The US markets ended mostly lower on Tuesday after Apple warned its revenue may be lower than forecast due to the coronavirus in China. Asian markets are trading mostly higher in early deals on Wednesday as investors tried to shake off worries about the coronavirus epidemic following a slight decline in the number of new cases.

Back home, Indian equity bourses settled Tuesday’s trading session off day’s low points. After a lackluster start, bourses remained negative throughout the day, as Care Ratings’ report stated that performance of companies during the quarter ended December of the financial year 2019-20 was weak with contraction in revenue and moderation in the growth rate of net profits. Adding more worries, International Monetary Fund (IMF) said that the goods and services tax (GST) collections in India have been below potential. The organisation said that multiple rates along with exemptions and implementation challenges have affected the GST collections. However, in the last hour of the day, indices managed to trim most of their losses, with a US-based think tank World Population Review report showing that India emerged as the world's fifth largest economy by overtaking the UK and France in 2019. Traders got some support, as Union Finance Minister Nirmala Sitharaman defended the fiscal deficit figures in the union budget and termed it as absolutely realistic. She noted that the government has been absolutely realistic both on the score of revenue generation and on the score of what can spend or borrow, so figures therefore are absolutely realistic keeping in mind the economy. Finally, the BSE Sensex lost 161.31 points or 0.39% to 40,894.38, while the CNX Nifty was down by 53.30 points or 0.44% to 11,992.50.
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