Barometers trade almost flat; PSU banks under pressure

Key benchmark indices traded sideways near the flat line in mid morning trade. Mixed global cues dented investors sentiment. The Nifty hovered around the 12,100 mark. At 11:27 IST, the S&P BSE Sensex, was up 7.23 points or 0.02% at 41,264.97. The Nifty 50 index was down 3.55 points or 0.03% at 12,109.90.

The broader market were seen under pressure. The S&P BSE Mid-Cap index was down 0.3% while the S&P BSE Small-Cap index was down 0.58%.

The market breadth was titled in the favour of bears. On the BSE, 756 shares rose and 1358 shares fell. A total of 141 shares were unchanged. In Nifty 50 index, 23 stocks advanced while 27 stocks declined.

Economy:

Moody's Investors Service cut India's 2020 GDP growth forecast to 5.4% from 6.6%. The credit rating agency also trimmed its 2021 GDP forecast to 5.8% from 6.7%. The cut in growth forecast is on the back of coronavirus outbreak which could hurt India's recovery. It added that any recovery in the country may be lower than expected.

Last month, the Economic survey estimated GDP growth for Financial Year 2020-21 at 6-6.5% while FY20 GDP growth is estimated at 5%.

Buzzing Index:

The Nifty PSU Bank index slumped 1.93% to 2,168.55, extending its losing run to second trading session. The index has fallen 3.59% in two trading sessions. State-run banks continued to witness selling pressure after the Supreme Court rejected Bharti Airtel and Vodafone Idea's plea on Friday negotiating the payment schedule in the AGR case. Since banks have high exposures to the telecom sector, a default in payment of dues will have an impact on the banking system.

Syndicate Bank (down 2.99%), Indian Bank (down 2.59%), Punjab National Bank (down 2.49%), Bank of Baroda (down 2.37%), Corporation Bank (down 2.21%), Punjab & Sind Bank (down 2.03%), Canara Bank (down 1.78%), Bank of India (down 1.67%), Allahabad Bank (down 1.65%), State Bank of India (down 1.6%), UCO Bank (down 1.41%), Union Bank of India (down 1.02%) and Central Bank of India (down 0.29%) were top losers in PSU Bank segment.

Stocks in Spotlight:

RITES gained 1.07%. RITES informed that the company has emerged as a successful bidder for supply of Locomotives, Coaches and DEMUs (Diesel electric Multiple Units) to a Cape Gauge country. RITES submitted the price bid for the contract amount of around Rs 680 crore and discussion on contract documents are expected to conclude soon.

Granules India in an exchange filing on Saturday said that US Food & Drug Administration (US FDA) has completed inspection of the facility located in Gagillapur, Hyderabad on 14 February 2020. The inspection was concluded with two observations. The company assured that it will respond to these observations within stipulated time. Shares of Granules India were trading 0.94% higher at Rs 177.30.

Balkrishna Industries jumped 9.93% to Rs 1272 after the auto ancillary major posted stellar Q3 numbers. On a consolidated basis, net profit rose 48.2% to Rs 223.80 crore in Q3 December 2019 (Q3 FY20) from Rs 150.98 crore reported in Q3 December 2018 (Q3 FY19). Net sales declined 3.5% to Rs 1155.76 crore in Q3 FY20 from Rs 1197.84 crore in Q3 FY19. Profit before tax (PBT) stood at Rs 278.27 crore in Q3 FY20, up by 25.1% from Rs 222.43 crore in Q3 FY19.

Overseas:

Asian stocks were trading mixed on Monday as investors weighed the near-term hit on global growth from a fast-spreading coronavirus outbreak in China, although expectations of further policy stimulus helped stem losses.

In US, the Nasdaq and S&P 500 finished at records on Friday as investors parsed mixed data on the strength of the US consumer and monitored the spread of COVID-19 in China.

The US consumer January retail sales showed sluggish activity, underscored by a 3.1% drop in sales at clothing stores.

The US bond and stock markets will be closed on Monday in observance of Presidents Day.

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