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Bourses resume gaining rally on Wednesday
Feb-19-2020

Indian equity bourses resumed their gaining rally on Wednesday, with Sensex and Nifty ending higher by over a percent each. After a fabulous opening, markets remained positive for the whole day, as the Finance Minister Nirmala Sitharaman said that the government would announce measures to tackle the financial fallout from the coronavirus outbreak amid a fall in new cases in China. Traders took some support 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.

In the second half of the trading session, key benchmarks extended their gains to settle near their day’s high points, aided with the Minister of State for Finance Anurag Singh Thakur’s statement that the government expects to resolve 90 per cent of the income tax disputes through 'Vivaad se Vishwas' scheme announced in the Budget for 2020-21. Market participants paid no heed towards a private report stating that the sharp reduction in lending rates is insufficient to prop up credit growth which is set to fall in July this year. Deterioration in factory output and real wage growth are the impeding factors limiting the growth in credit.

On the global front, European markets were trading in green, even after Germany's economic sentiment logged a steep fall in February as investors increasingly grew concerned about the impact of the coronavirus outbreak in China. The survey results from the ZEW - Leibniz Centre for European Economic Research revealed that the investor confidence indicator slumped to 8.7 from 26.7 in January. Asian markets ended mostly higher, despite Japan posted a merchandise trade deficit of 1,312.6 billion yen in January. That beat estimates for a shortfall of 1,684.8 billion yen following the 154.6 billion yen deficit in December.

Back home, the automobile sector stocks ended higher, though credit rating agency Fitch Ratings said that slowing GDP growth and weak consumer sentiment in India will continue to weigh on auto sales despite some improvement in the quarter ended December 2019. Further, the agriculture sector stocks remained in focus, after the latest government data showed India is set to harvest a record 106.21 million tonne wheat in 2019-20 crop year on increase in acreage owing to good rains. Wheat production has been rising year-on-year and the previous record of 103.60 million tonne was achieved during 2018-19 crop year (July-June).

Finally, the BSE Sensex gained 428.62 points or 1.05% to 41,323.00, while the CNX Nifty was up by 133.40 points or 1.11% to 12,125.90.

The BSE Sensex touched high and low of 41,357.16 and 41,048.93, respectively and there were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.34%, while Small cap index was up by 1.41%.

The top gaining sectoral indices on the BSE were Energy up by 2.37%, Healthcare up by 2.12%, Oil & Gas up by 1.61%, FMCG up by 1.57% and PSU up by 1.54%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.79%, Hindustan Unilever up by 2.74%, Reliance Industries up by 2.60%, ONGC up by 2.47% and HDFC up by 2.32%. On the flip side, Sun Pharma down by 1.33%, TCS down by 0.93%, Bharti Airtel down by 0.80%, Larsen & Toubro down by 0.38% and Indusind Bank down by 0.28% were the top losers.

Meanwhile, the commerce ministry has stated that even in the midst of volatile global economy, special economic zones (SEZs) in India have shown resilience and have crossed $100 billion worth of exports by mid-February in the current financial year (FY20). Earlier, SEZs had achieved the landmark of $100-billion worth of exports during the full financial year 2018-19.

The ministry said the SEZ continue to take lead in expanding the exports for the country. It also said the services segment, constituting majorly of IT and ITeS services, was the main driver of export growth at 23.69 percent. It added that there was almost 4 percent growth in manufacturing segment also and this reflects overall expansion and interest in SEZs in the country.

It further highlighted that the number of operational SEZs has grown to 241 as against 235 at the end of 2018-19. Sectors that saw healthy growth include gems and jewellery (13.3 percent), trading and logistics (35 percent), leather and footwear (15 percent), non-conventional energy (47 percent), textiles and garments (17.6 percent). Petrochemicals constitute a major segment of SEZ exports, however growth was muted in this segment which may be attributed to softening of global crude prices.

The CNX Nifty traded in a range of 12,134.70 and 12,042.10. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 7.00%, Grasim Industries up by 4.41%, Coal India up by 3.46%, Zee Entertainment up by 2.81% and Hindustan Unilever up by 2.76%. On the flip side, Tata Motors down by 2.17%, JSW Steel down by 1.40%, Sun Pharma down by 1.32%, TCS down by 0.98% and Bharti Airtel down by 0.78% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 54.26 points or 0.74% to 7,436.27, France’s CAC rose 34.63 points or 0.57% to 6,091.45 and Germany’s DAX was up by 52.30 points or 0.38% to 13,733.49.

Asian markets ended mostly higher on Wednesday as investors closely monitoring China’s progress in returning to work as the country deals with the corona virus outbreak. Japanese shares ended up as the yen retreated after data showed core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, fell 12.5% month-on-month in December. Though, Chinese shares ended lower as worries persisted over the spreading corona virus epidemic, which has claimed more than 2,000 lives and weighed on business activity in the country.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,975.40
-9.57
-0.32

Hang Seng

27,655.81
125.61
0.46

Jakarta Composite

5,928.79
41.83
0.71

KLSE Composite

1,534.16

-2.92

-0.19

Nikkei 225

23,400.70
206.90
0.89

Straits Times

3,213.71
17.08
0.53

KOSPI Composite

2,210.34
1.46
0.07

Taiwan Weighted

11,758.84
109.86
0.94
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