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Bourses continue choppy trade
Feb-20-2020

Local equity benchmarks were trading flat with negative bias in morning session on account of profit booking by investors in some specific sectors such as Energy, Metal and FMCG. But, BSE Mid, Small cap indices were trading with gains of more than half a percent. After making a cautious start, markets continued their choppy trade. Traders were concerned with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the coronavirus outbreak will have a limited impact on India but the global GDP and trade will definitely get affected due to the large size of the Chinese economy. However, downside remained capped with report that mutual funds focused on investing in fixed-income securities saw an inflow of over Rs 94,000 crore in three months ended December 2019, driven by infusion in liquid and overnight funds. Meanwhile, Fitch Ratings in its report said that with deceleration in growth and tight liquidity conditions, the country's financial institution sector may continue to face challenging operating environment. On the sectoral front, paper industry stocks remained in focus as the government is considering making it mandatory for paper importers to register themselves before importing the commodity, a move aimed at keeping a tab on imports of the product.

On the global front, Asian markets are trading mixed after China’s central bank cut its one-year loan prime rate by 10 basis points, and the five-year loan prime rate by 5 basis points. Back home, in scrip specific development, Transwarranty Finance shined on raising Rs 36 lakh via NCDs and Sterlite Technologies zoomed on adding new orders worth Rs 1,500 crore.

The BSE Sensex is currently trading at 41309.33, down by 13.67 points or 0.03% after trading in a range of 41220.81 and 41346.33. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.75%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.89%, Consumer Durables up by 0.68%, Realty up by 0.66%, Telecom up by 0.66% and Consumer discretionary was up by 0.53%, while Energy down by 0.20%, Metal down by 0.17% and FMCG was down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.17%, ONGC up by 1.08%, Sun Pharma up by 1.02%, SBI up by 0.95% and Titan Company up by 0.66%. On the flip side, Kotak Mahindra Bank down by 0.82%, Nestle down by 0.75%, Hindustan Unilever down by 0.70%, HDFC down by 0.55% and NTPC down by 0.54% were the top losers.

Meanwhile, ratings agency ICRA has said that India's automobile industry may be negatively impacted and supply chain disrupted if the Coronavirus (COVID-19) outbreak in China and South-East Asia persisted longer, as China accounts for 27 per cent of India's auto component imports valued at $4.8 billion. These countries play a critical role in automotive supply chain and domestic OEMs source critical components and sub-components including fuel injection pumps, EGR modules, electronic components, turbo chargers from these markets which in turn directly or indirectly depend on China.

The agency mentioned the impact is estimated to be higher for high value-add and customised components, while commoditised products could shift to alternative suppliers. It said disruption in supply of certain critical components sourced from China will have differential impact. OEMs sourcing components such as electronic components, fuel injection pumps, turbo charger, meter sets, LEDs, magnets, airbag components, steering system components and electric vehicle components will be affected the most.

It added, in particular, the impact will be more profound on commercial vehicle (CV), passenger vehicle (PV) and the two-wheeler (2W) segments, while tractor segment which has high localisation levels with limited dependence on imports will have much lesser impact. In terms of sectoral outlook on domestic automotive industry, the agency said it has a negative outlook on the CV segment due to surplus capacity in system, existing financing constraints, weak macro-economic scenario and industrial output which is likely to keep demand subdued.

The CNX Nifty is currently trading at 12123.65, down by 2.25 points or 0.02% after trading in a range of 12092.80 and 12135.00. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.10%, Zee Entertainment up by 2.32%, Dr. Reddys Lab up by 1.56%, Bharti Infratel up by 1.55% and Yes Bank up by 1.27%. On the flip side, Cipla down by 1.15%, Coal India down by 0.90%, Kotak Mahindra Bank down by 0.88%, Nestle down by 0.80% and Wipro down by 0.77% were the top losers.

Asian markets are trading mixed; Hang Seng decreased 202.79 points or 0.73% to 27,453.02, Taiwan Weighted dropped 22.56 points or 0.19% to 11,736.28, Straits Times trembled 16.45 points or 0.51% to 3,197.26 and KOSPI fell 10.41 points or 0.47% to 2,199.93. On the flip side, Jakarta Composite soared 6.64 points or 0.11% to 5,935.43, Shanghai Composite gained 13.91 points or 0.47% to 2,989.31 and Nikkei 225 was up by 109.41 points or 0.47% to 23,510.11.
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