Sensex falls 65 points, Nifty below 12,100-mark in early trade on losses in banking stocks; ONGC, Mahindra among top losers

ONGC was the top loser in the Sensex pack, followed by M&M, SBI, ICICI Bank, Bajaj Auto, HDFC L&T, Sun Pharma and IndusInd Bank, falling up to 1.16 per cent.

FP Staff February 17, 2020 11:37:50 IST
Sensex falls 65 points, Nifty below 12,100-mark in early trade on losses in banking stocks; ONGC, Mahindra among top losers
  • Market benchmark Sensex slipped 65 points in the opening session while the NSE Nifty was trading down by 28 points

  • TCS emerged as the biggest gainer, followed by Infosys, NTPC Nestle India, Hindustan Unilever and Tata Steel, rising up to 0.60%

  • The Nifty PSU bank index dropped 1.4 percent and Nifty private bank index slid 0.4 percent

Equity benchmark indices ticked lower in early trade on Monday, dragged down by banking stocks exposed to telecom operators after the government ordered telecom companies to immediately pay billions of dollars in dues amid rising concerns over coronavirus outbreak.

Market benchmark Sensex slipped 65 points in the opening session while the NSE Nifty was trading down by 28 points.

The 30-share barometer was trading 46.83 points, or 0.11 percent, lower at 41,210.91 at around 10.15 am while the broader Nifty was trading down by 21 points or 0.17 percent, at 12,092.45.

Sensex falls 65 points Nifty below 12100mark in early trade on losses in banking stocks ONGC Mahindra among top losers

Representational image. Reuters.

ONGC was the top loser in the Sensex pack, followed by M&M, SBI, ICICI Bank, Bajaj Auto, HDFC L&T, Sun Pharma and IndusInd Bank, falling up to 1.16 percent.

On the other hand, TCS emerged as the biggest gainer, followed by Infosys, NTPC Nestle India, Hindustan Unilever and Tata Steel, rising up to 0.60 percent.

The banking sector dominated the losses, with the Nifty bank index falling 0.5 percent. The Nifty PSU bank index dropped 1.4 percent and Nifty private bank index slid 0.4 percent.

No.2 telco Bharti Airtel fell as much as 1.5 percent as the government on Friday after market close ordered mobile carriers to immediately pay Rs 92,000 crore ($12.88 billion) in overdue levies and interest.

Indian banks are burdened with nearly $140 billion of bad loans and face another huge hit if Vodafone Idea is forced into bankruptcy.

Banks in India are owed roughly 300 billion rupees by Vodafone Idea, according to a Macquarie report from last year.

Punjab National Bank fell 1.9 percent, Bank of India slipped 2 percent, while State Bank of India (SBI.NS) edged down 0.8 percent.

Shares of India’s top oil explorer, Oil and Natural Gas, fell as much as 3.9 percent after it reported a near 50 percent drop in December-quarter profit on Friday.

In the previous session, the Sensex fell by 202.05 points or 0.49 percent to end at 41,257.74, with 22 of its constituents closing with losses. Likewise, the broader NSE Nifty shed 61.20 points or 0.50 percent to settle at 12,113.50.

Dealers said that the coronavirus outbreak continued to weigh on investor sentiment globally.

Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 704.92 crore, while domestic institutional investors bought shares worth Rs 219.54 crore on Friday, data available with stock exchanges showed.

Rupee slips 10 paise to 71.47

The rupee declined by 10 paise to 71.47 against the US dollar in opening trade on Monday, amid sustained foreign fund outflows and weak opening in domestic equities.

Forex traders said strengthening of the US dollar vis-a-vis other currencies overseas kept pressure on the Indian rupee.

The rupee opened weak at 71.45 at the interbank forex market and then fell further to 71.47, down 10 paise over its last close.

The rupee had settled at 71.37 against the US dollar on Friday.

Meanwhile, easing crude prices supported the local unit and restricted the fall.

Asian shares hover around three-week highs

Asian shares reversed earlier losses on Monday and moved back toward a three-week top as Chinese efforts to cushion the blow from a coronavirus outbreak cheered investors, although Japanese stocks faltered amid growing recession risks.

Trading is expected to be light as U.S. stocks and bond markets will be shut on Monday for a public holiday.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was a tad firmer at 557.30, not far from last week’s peak of 558.30, which was the highest since late January.

The gains were helped largely by Chinese shares with the blue-chip index .CSI300 adding 0.4% after the country's central bank lowered one of its key interest rates and injected more liquidity into the system.

Also whetting risk appetite was an announcement by China’s Finance Minister on Sunday that Beijing would roll out targeted and phased tax and fee cuts.

Fears about the jolt to the world economy from the coronavirus still lingered though as the number of reported new cases in China rose to 2,048 as on Sunday from 2,009 the previous day.

Restrictions were tightened further in Hubei on Sunday with most vehicles banned from the roads and companies told to stay shut until further notice.

China’s “containment measures suggest that activity is only likely to normalise by mid-March at best and more likely end Q1,” said Jefferies analyst Sean Darby.

“The question remains over the degree of stimulus to be required given the country’s fiscal position.”

Japan's Nikkei stumbled 0.7 percent after the country's economy shrank at the fastest pace in the December quarter since the second quarter of 2014.

The hit to the world’s third-largest economy comes amid fresh concerns about weakness in the current quarter, as the coronavirus damages output and tourism, stoking fears Japan may be on the cusp of a recession.

Trade-dependent Singapore downgraded its 2020 economic growth forecast due to the coronavirus, while China’s economy is also widely expected to take a sharp hit.

Wall Street indexes scaling record highs

Asia’s woes have yet to spread elsewhere, with Wall Street indexes scaling record highs.

E-Mini futures for the S&P500 were up 0.2% in Asian trading on Monday.

Talk of a US middle-class tax cut and a proposal to encourage everyday Americans to invest in the equities market boosted share market sentiment late last week, Betashares chief economist David Bassanese said.

Bassanese had misgivings about the plan, saying it reminded him of former U.S. President George Bush encouraging Americans to buy a home during a housing boom.

“It adds to my suspicion that this decade-long bull market could eventually end via a blow-off bubble, driven by central bank persistent low interest rate policy,” he said in a note.

Later in the week, flash manufacturing activity data for February are due for the Eurozone, the United Kingdom and the United States, which is likely to capture at least some of the early impact of the viral epidemic.

Action was relatively muted in the currency markets, with the dollar a tad firmer against the yen at 109.81. It was unchanged on the pound at $1.3047 and a tad weaker on the euro at $1.0837.

The risk-sensitive Aussie, which is also played as a liquid proxy for the Chinese yuan, ticked up to $0.6723.

That left the dollar index flat at 99.141.

In commodities, gold inched lower to $1,582.27 an ounce.

Oil futures slipped with Brent crude down 34 cents at $56.98 a barrel and the US crude off 12 cents at $51.93.

Brent crude oil futures fell 0.23 percent to $57.19 per barrel.

With inputs from agencies

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