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Markets see deep dive on Monday; Sensex loses around 1%
Jan-20-2020

Indian equity bourses saw a deep dive on Monday, with Sensex & Nifty losing around a percent each. The start of the day was on a positive note, aided with Union Road Transport and Highways Minister Nitin Gadkari’s statement that the goal of making India a $5 trillion economy by 2024 was difficult but not impossible. He added that it can be achieved by increasing domestic production and reducing dependence on imports. But soon, markets turned negative, as former finance secretary Subhash Chandra Garg said that the government's tax collection is likely to fall short of its estimate by Rs 2.5 lakh crore or 1.2% of GDP in 2019-20.

Key indices remained in negative terrain for almost whole trading session, amid a report stating that progress across major development schemes in India, including education, health and nutrition among others, remains constrained due to sub-optimal utilisation of available funds, especially at the district level. Adding more anxiety among investors, another private report stated that surging inflation and slowing growth are raising serious concerns about the future growth prospects of the economy and as a remedial measure the government should resolve supply side hurdles and ensure more stringent governance norms.

On the global front, European markets were trading in red, after Germany's producer prices declined at a slower pace in December. The data from Destatis showed that producer prices fell 0.2 percent year-on-year, slower than the 0.7 percent decrease seen in November. Asian markets ended mixed, as Japan's industrial production declined slightly more than initially estimated in November. The data from the Ministry of Economy, Trade and Industry showed that industrial production fell by a seasonally adjusted 1.0 percent month-on-month November. According to the initial estimate, production had declined 0.9 percent.

Back home, aviation stocks remained in focus, as the government is considering levying specific rate of excise duty on aviation turbine fuel in place of current ad valorem rates to insulate its prices from cascading effect in times of volatile prices, with no sight of including jet fuel in GST in near future. Jewellery stocks also remained in watch, amid report stating that India's gold loan market is expected to reach Rs 4,617 billion by 2022 at a five-year compounded annual growth rate of 13.4 percent. It also said the 2018-19 fiscal year saw gold loan companies aggressively expanding their branch network across the northern and eastern states in the country.

Finally, the BSE Sensex lost 416.46 points or 0.99% to 41,528.91, while the CNX Nifty was down by 127.80 points or 1.03% to 12,224.55.

The BSE Sensex touched high and low of 42,273.87 and 41,503.37, respectively and there were 09 stocks advancing against 21 stocks declining.

The broader indices ended in red; the BSE Mid cap index slipped 0.57%, while Small cap index was down by 0.39%.

The top gaining sectoral indices on the BSE were Telecom up by 1.89%, Realty up by 0.71%, Utilities up by 0.45%, Power up by 0.31% and FMCG up by 0.10%, while Energy down by 2.67%, Bankex down by 1.65%, Oil & Gas down by 1.30%, PSU down by 1.01% and Metal down by 0.96% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.75%, Bharti Airtel up by 1.85%, ITC up by 0.85%, Asian Paints up by 0.82% and ICICI Bank up by 0.74%. On the flip side, Kotak Mahindra Bank down by 4.70%, Reliance Industries down by 3.08%, ONGC down by 2.39%, TCS down by 2.16% and NTPC down by 2.06% were the top losers.

Meanwhile, India has been ranked very low at 76th place in a list of 82 countries on Global Social Mobility Index released by the World Economic Forum (WEF). The report also lists India among the five countries that stand to gain the most from a better social mobility score that seeks to measure parameters necessary for creating societies where every person has the same opportunity to fulfil his potential in life irrespective of socioeconomic background.

Measuring countries across five key dimensions distributed over 10 pillars – health; education (access, quality and equity); technology; work (opportunities, wages, conditions); and protections and institutions (social protection and inclusive institutions) – shows that fair wages, social protection and lifelong learning are the biggest drags on social mobility globally.

In the case of India, it ranks 76th out of 82 economies. It ranks 41st in lifelong learning and 53rd in working conditions. The Global Social Mobility Index, which benchmarks 82 global economies, is designed to provide policy-makers with a means to identify areas for improving social mobility and promoting equally shared opportunities in their economies, regardless of their development.

The CNX Nifty traded in a range of 12,430.50 and 12,216.90. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.96%, Bharti Infratel up by 1.60%, Bharti Airtel up by 1.38%, GAIL India up by 1.31% and ITC up by 0.98%. On the flip side, Kotak Mahindra Bank down by 4.78%, Zee Entertainment down by 4.19%, IOC down by 4.08%, Reliance Industries down by 3.09% and Coal India down by 2.74% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 12.42 points or 0.16% to 7,662.14, France’s CAC fell 17.93 points or 0.29% to 6,082.79 and Germany’s DAX was down by 7.19 points or 0.05% to 13,518.94.

Asian markets ended mixed on Monday as the focus shifted to earnings announcements and a round of central bank policy meetings due this week. While, expectations for more stimulus measures from Beijing to aid growth helped to limit the downside to some extent. Chinese shares closed up, with the Chinese Central Bank, People’s Bank of China (PBoC) keeping the one year and five-year loan prime rate (LPR) unchanged for January. The rate was last reduced in November, which was the first reduction since the new lending rate was introduced. Besides, Japanese shares ended higher, with sentiment helped by a strong Wall Street rebound after strong US housing data and signs of resilience in the Chinese economy. Furthermore, weak yen against the dollar too supported Japanese shares. Investors shrugged off official data showing that Japan's industrial production declined slightly more than initially estimated in November.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,095.79
20.29
0.66

Hang Seng

28,795.91
-260.51
-0.90

Jakarta Composite

6,245.04
-46.62
-0.74

KLSE Composite

1,588.88

-6.93

-0.43

Nikkei 225

24,083.51
42.25
0.18

Straits Times

3,280.09
-0.94
-0.03

KOSPI Composite

2,262.64
12.07
0.54

Taiwan Weighted

12,118.71
28.42
0.24


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