Sensex slips 56.87 points to 41,249.16 in early deals, Nifty down 13.60 points at 12,124.35; Rupee drops 9 paise

  • Sensex was trading lower by 56.87 points or 0.14 percent at 41,249.16, while the broader NSE Nifty fell 13.60 points or 0.11 percent to 12,124.35 in early morning trade.

  • Global crude benchmark Brent advanced 0.33 per cent to $55.30 per barrel

  • In the sixth bi-monthly monetary policy review of 2019-20, the repo rate was unchanged at 5.15 percent while retaining its accommodative stance

Sensex and Nifty edged lower in opening deals on Friday, tracking subdued Asian market.

The 30-share BSE Sensex was trading lower by 56.87 points or 0.14 percent at 41,249.16, while the broader NSE Nifty fell 13.60 points or 0.11 percent to 12,124.35 in early morning trade.

On Thursday, the Sensex had settled 163.37 points, or 0.40 percent higher at 41,306.03 and the Nifty had closed up 48.80 points, or 0.40 per cent, at 12,137.95 after the RBI left the policy rates unchanged but maintained its accommodative stance to boost growth, according to a PTI report.

Both equity benchmarks Sensex and Nifty had logged their fourth straight gains on Thursday.

 Sensex slips 56.87 points to 41,249.16 in early deals, Nifty down 13.60 points at 12,124.35; Rupee drops 9 paise

Representational image. Reuters

Global crude benchmark Brent advanced 0.33 per cent to $55.30 per barrel.

On the currency front, the Indian rupee dropped 9 paise to 71.27 per US dollar in morning deals.

Exchange data showed foreign investors pulled out Rs 560.36 crore on a net basis from the Indian equity market on Thursday.

On the global financial market front, Asia was trading lower, while US stocks consolidated gains for a fourth consecutive day to climb new record highs, as sentiment kept improving on China's pledge of tariff cuts on American goods.

In the sixth bi-monthly monetary policy review of 2019-20, the RBI kept the repo rate unchanged at 5.15 percent while retaining its accommodative stance.

The central bank also kept the GDP growth estimate unchanged for the current fiscal at 5 percent but projected a pick up to 6 percent in the next financial year.

Rupee declines by 9 paise

The rupee opened on a weak note and declined by 9 paise to 71.27 against the US dollar in opening trade on Friday, tracking weak opening in domestic equities and foreign fund outflows.

Forex traders said weak opening in domestic equities, rising crude oil prices and foreign fund outflows dragged the local unit, but a weakening of the American currency in the overseas market supported the rupee.

The rupee opened weak at 71.26 at the interbank forex market and then fell further to 71.27, down 9 paise over its last close.

The rupee had settled at 71.18 against the US dollar on Thursday.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 560.36 crore on Thursday, as per provisional data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.05 percent to 98.44.

Rally in stocks runs out of steam as coronavirus toll climbs

Asian share markets slipped on Friday and oil price gains stalled, as the growing death toll and economic damage from the coronavirus outbreak put a lid on the week’s sharp rally, according to Reuters.

The toll in mainland China from the new virus rose to 636, more than doubling in just under a week, with the number of infections at 31,161.

In the early hours of the morning, one of the first Chinese doctors to raise the alarm about the virus died from the illness at a hospital in Wuhan, the outbreak’s epicentre.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 percent. Japan's Nikkei and Korea's Kospi were in the red. Hong Kong's Hang Seng fell 0.6 percent. The toll in mainland China from the new virus rose to 636, more than doubling in just under a week, with the number of infections at 31,161.

In the early hours of the morning, one of the first Chinese doctors to raise the alarm about the virus died from the illness at a hospital in Wuhan, the outbreak’s epicentre.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 percent. Japan's Nikkei and Korea's Kospi were in the red. Hong Kong's Hang Seng fell 0.6 percent and the Shanghai Composite was 0.1 percent weaker.

Barring Shanghai, which has recovered about half of its $400 billion wipeouts on Monday, all are ahead for the week, amid a broad global rally.

That has been underpinned by China’s sweeping efforts to contain the spread of the virus. But with deaths rising, cities shut off, flights cancelled and factories closed, global supply chains are in disarray and fears of a pandemic remain high.

“The rate of infection is not slowing,” said Michael McCarthy, chief markets strategist at brokerage CMC Markets in Sydney.

“I’m a little surprised at the way European and US investors have shrugged this off. I think the reaction in the Asia-Pacific region is much more reasonable. There is real uncertainty,” he said.

US stocks overnight gained for a fourth straight session and Wall Street’s main indexes hit record highs, while Asian assets—particularly currencies—remain under pressure.

In Asian trade, the steepest weekly slide in the yen since October has paused, leaving the currency sitting just above a two-week low at 109.93 per dollar. Gains in the Australian dollar, a liquid proxy for China because of the heavy exposure of Australian exports, were likewise halted.

While the Aussie is on track for its first weekly gain this year, elsewhere in Asia the Singapore dollar and Thai baht have been trampled in a rush from emerging market currencies into majors.

Chinese goods trade figures due Friday will be closely watched for an early glimpse of how the virus, and the harsh measures to contain it, are affecting the flow of goods.

Commodities cautious

Much is unknown about the coronavirus, including its lethality and transmission routes. The World Health Organization has said it is too early to call a peak in the outbreak.

Yet China’s aggressive response, dubbed a “people’s war for epidemic prevention” by President Xi Jinping, appears to have inspired confidence.

Beijing has pumped billions of dollars into the money market to stabilise market confidence and the central bank said on Friday it expects the virus impact to be temporary.

Yet, owing to much greater exposure to Chinese demand and less access to the benefits of monetary stimulus, commodity prices have been more sensitive to conditions on the ground.

Oil and metal prices fell hard as the coronavirus outbreak gained pace and have been slow to recover.

US crude was firm on Friday at $51.31 per barrel, but is flat for the week and remains 13 percent below its 21 January-level. Brent prices were last at $55.33 per barrel.

A rally in copper—often seen as a barometer of global economic health because of its wide industrial use—ran out of steam on Thursday and closed flat in London at $5,735-a-tonne.

“We think that demand could come back strongly as opposed to gradually in Q2 2020,” said Commonwealth Bank commodities analyst Vivek Dhar. “But the risk in the near term is that provinces take longer to return to work in order to contain the spread of the virus.” and the Shanghai Composite was 0.1 percent weaker.

Barring Shanghai, which has recovered about half of its $400 billion wipeouts on Monday, all are ahead for the week, amid a broad global rally. That has been underpinned by China’s sweeping efforts to contain the spread of the virus. But with deaths rising, cities shut off, flights cancelled and factories closed, global supply chains are in disarray and fears of a pandemic remain high.

“The rate of infection is not slowing,” said Michael McCarthy, chief markets strategist at brokerage CMC Markets in Sydney.

“I’m a little surprised at the way European and US investors have shrugged this off. I think the reaction in the Asia-Pacific region is much more reasonable. There is real uncertainty,” he said.

US stocks overnight gained for a fourth straight session and Wall Street’s main indexes hit record highs, while Asian assets—particularly currencies—remain under pressure.

In Asian trade, the steepest weekly slide in the yen since October has paused, leaving the currency sitting just above a two-week low at 109.93 per dollar.

Gains in the Australian dollar, a liquid proxy for China because of the heavy exposure of Australian exports, were likewise halted.

While the Aussie is on track for its first weekly gain this year, elsewhere in Asia the Singapore dollar and Thai baht have been trampled in a rush from emerging market currencies into majors.

Chinese goods trade figures due Friday will be closely watched for an early glimpse of how the virus, and the harsh measures to contain it, are affecting the flow of goods.

 

---With inputs from agencies

 

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Updated Date: Feb 07, 2020 10:18:09 IST