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Markets extend losses in late morning deals
Jun-04-2020
Indian equity benchmarks extended their losses in late morning deals, despite firm cues from other Asian markets. In line with the larger peers, the broader indices were too showing their lackluster performance in late morning deals, while Consumer Durables, Realty and Banking sector were facing heavy selling on the BSE. Market participants got worried, as former chief economic adviser Arvind Subramanian said the FRBM Act will probably have to be revised by the end of the year as India will witness a sharp decline in GDP growth due to the COVID-19 crisis. Subramanian further said while labor reforms were necessary, the way they have been done by some states has undermined basic protections to workers, especially in light of the migrant crisis.

On the global front, Asian markets were trading in green, despite Malaysia's exports logged its biggest decline since the global financial crisis in 2009. The data from the Department of Statistics showed that exports fell 23.8 percent year-on-year to MYR 64.9 billion in April. Economists had expected a 15.1 percent decline. This was the largest decline since September 2009.

The BSE Sensex is currently trading at 33956.04, down by 153.50 points or 0.45% after trading in a range of 33907.68 and 34310.14. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index r ose 0.20%, while Small cap index was down by 0.19%.

The top gaining sectoral indices on the BSE were Energy up by 1.32%, Healthcare up by 1.23%, IT up by 1.07%, TECK up by 0.98% and Oil & Gas up by 0.94%, while Consumer Durables down by 2.03%, Bankex down by 1.55%, Realty down by 1.16%, Capital Goods down by 1.14% and Consumer Disc down by 1.10% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 4.79%, Sun Pharma up by 2.67%, Reliance Industries up by 1.80%, TCS up by 1.59% and Power Grid up by 0.94%. On the flip side, Bajaj Finance down by 3.29%, Titan Co down by 3.23%, Indusind Bank down by 3.15%, HDFC down by 3.06% and Asian Paints down by 3.02% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that India’s air passenger traffic is likely to witness sharp decline of 45-50 percent in the current financial year (FY21). It pointed out that with almost negligible air traffic already in the first two months of the current fiscal, possible dilemma amongst travelers to travel amidst continuing coronavirus (Covid-19) pandemic fears and gradual addition of capacities by airlines, passenger traffic at airports is expected to remain under pressure for the first half (April-September) of FY21, with some recovery likely only in H2FY21, on a full year basis.

According to the report, recovery in air travel demand in a meaningful manner is expected towards FY22 and passenger traffic levels of 345 million recorded in the year ended March 2019 are likely to be surpassed only by FY2023. It also said that the aviation infrastructure industry is amongst the most severely impacted by the novel Covid-19 pandemic and the setback on the industry is expected to be substantial in the near term. It also said there prevails considerable uncertainty in air traffic recovery timeline in the wake of subdued demand for air travel for leisure (especially international) by risk averse passengers and likely decline in disposable income in the hands of consumers.

Moreover, the rating agency said factors like dip in business travel due to subdued global macro-economic environment, increasing use of virtual communication modes by business community and possible continuation of travel restrictions, in some form, by various countries have also significantly influenced the overall scenario.

The CNX Nifty is currently trading at 9991.35, down by 70.20 points or 0.70% after trading in a range of 9988.95 and 10123.85. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 4.65%, Tech Mahindra up by 4.53%, Sun Pharma up by 2.32%, BPCL up by 1.92% and GAIL India up by 1.61%. On the flip side, Indusind Bank down by 4.22%, Bajaj Finance down by 4.02%, Titan Co down by 3.64%, HDFC down by 3.36% and Asian Paints down by 3.21% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 inched up 5.29 points or 0.02% to 22,619.05, Taiwan Weighted increased 50.54 points or 0.45% to 11,370.70, KOSPI gained 6.84 points or 0.32% to 2,153.84 and Jakarta Composite rose 45.83 points or 0.93% to 4,986.84. On the other hand, Straits Times declined 7.73 points or 0.29% to 2,692.66, Hang Seng slipped 28.70 points or 0.12% to 24,296.92 and Shanghai Composite was down by 6.20 points or 0.21% to 2,917.17.
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