Sensex, Nifty recoup from losses in opening trade; RIL, IndusInd Bank, HCL Tech trade on positive note

After the Sensex dropped in opening trade to over 200 points on Tuesday led by losses in index-heavyweights HDFC twins, Kotak Bank and ITC amid weak global cues it regained from its earlier low points. The Sensex was 41.34 points down or 0.10 points lower at 41,487.60 and the Nifty was 15.10 points down or 0.12 percent at 12209.40.

After hitting an intra-day low of 41,301.63, the 30-share BSE index pared losses to trade 86.90 points or 0.21 percent lower at 41,442.01.

Related Articles

Meet Rekha Jhunjhunwala: Woman who earned crores a day for 2 months with 1 stock

SBI sends bill to customer despite expiry of credit card; details inside

Similarly, the broader NSE was trading 18.90 points, or 0.15 percent, lower at 12,205.65.

In the previous session, Sensex settled 416.46 points, or 0.99 percent, lower at 41,528.91, and the Nifty sank 127.80 points, or 1.03 percent, to 12,224.55.

Kotak Bank was the top laggard in the Sensex pack, shedding up to 1.25 percent, followed by Tata Steel, Hero MotoCorp, HDFC duo, PowerGrid and Titan.

On the other hand, Reliance Industries, IndusInd Bank, NTPC, SBI, ICICI Bank, ONGC and HCL Tech were trading on a positive note.

According to traders, domestic investors turned wary amid subdued quarterly results by key index constituents and negative cues from global markets.

Further, market sentiment was also hit after the IMF on Monday lowered India's economic growth estimate for the current fiscal to 4.8 percent and listed the country's much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years.

In October, the International Monetary Fund (IMF) had pegged India's economic growth at 6.1 percent for 2019.

Rupee dips 6 paise

The rupee depreciated by 6 paise to 71.17 against the US dollar in opening trade on Tuesday, tracking a weak domestic equity market.

However, a weak dollar against other major currencies overseas and softening crude prices restricted the rupee's fall, dealers said.

At the interbank foreign exchange market, the local currency opened on a weak note at 71.17 and fell further to hit a low of 71.19 against the US dollar.

The domestic unit had settled at 71.11 against the American currency on Monday.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05 percent to 97.56.

Meanwhile, foreign institutional investors remained net buyers in the capital markets, putting in Rs 5.87 crore on Monday, as per provisional data.

The 10-year Indian government bond yield was at 6.64 percent.

Asia shares lurch lower, China flu risks mount

Asian shares took a sudden lurch lower on Tuesday as mounting concerns about a new strain of pneumonia in China sent a ripple of risk aversion through markets.

Safe-haven bonds and the yen edged higher as investors were reminded of the economic damage done by the SARS virus in 2003, particularly given the threat of contagion as hundreds of millions travel for the Lunar New Year holidays, according to Reuters.

“It’s an essential enough development that markets will monitor it on the risk radar, as if things turn critical it could provide a massive blow to the airline industry and a knockout punch to local tourism,” said Stephen Innes, Asia Pacific market strategist at AxiCorp.

The mood change saw MSCI’s broadest index of Asia-Pacific shares outside Japan slip 1 percent after a steady start. Hong Kong, which suffered badly during the SARS outbreak, saw its index fall 2 percent.

Japan’s Nikkei lost 0.8 percent and Shanghai blue chips 1.5 percent, with airlines under pressure. The caution spread to E-Mini futures for the S&P 500 which eased 0.4 percent, while EUROSTOXX 50 futures lost 0.3 percent.

The mood has already been guarded after the International Monetary Fund trimmed its global growth forecasts, mostly due to a surprisingly sharp slowdown in India and other emerging markets.

There had been some relief as US President Donald Trump and French President Emmanuel Macron seemed to have struck a truce over a proposed digital tax.

The two agreed to hold off on a potential tariffs war until the end of the year, a French diplomatic source said.

Trump is due to deliver a speech at the World Economic Forum in Davos later on Tuesday, and trade and tariffs could be on the agenda.

In a tweet late on Monday, Trump said he would be bringing “additional Hundreds of Billions of Dollars back to the United States of America! We are now NUMBER ONE in the Universe, by FAR!!”

Also due later is the outcome of the Bank of Japan’s latest policy meeting.

Richard Grace, head of international economics at Commonwealth Bank of Australia, expects no further easing in policy in part because the government has launched a fresh fiscal package worth around 1 percent of GDP.

“Also, Japan’s 10-year government bond yield has been steadily lifting since declining to ‑29bp in late August 2019, and at 0.00 percent, is at a more than a twelve‑month high,” he added. “It suggests a reasonable outlook for Japan’s economy.”

Japan’s yen picked up a bid on the safe-haven move and the dollar dipped to 109.92 from an early 110.17. It also gained on the euro, leaving the single currency flat on the dollar at $1.1092.

Against a basket of currencies, the dollar was steady at 97.599, just off a four-week high of 97.729.

Spot gold edged up to $1,566.71 per ounce, and back toward a seven-year peak of $1,610.90 reached last week.

Oil prices hesitated, having earlier gained on the risk of supply disruption in Libya.

Brent crude futures eased 31 cents to $64.89 a barrel, while US crude fell 5 cents to $58.49.