Sensex, Nifty near day's low; European shares open red

The benchmark indices traded in a narrow range near the day's low in afternoon trade. Market sentiment was affected by weak domestic economic data and a spike in coronavirus cases reported in China. At 13:28 IST, the S&P BSE Sensex, was down 196.12 points or 0.47% at 41,369.78. The Nifty 50 index was down 58 points or 0.48% at 12,143.20.

The broader market traded with a negative bias. The S&P BSE Mid-Cap index was down 0.17% while the S&P BSE Small-Cap index was up 0.02%.

The market breadth was negative. On the BSE, 976 shares rose and 1303 shares fell. A total of 150 shares were unchanged. In Nifty 50 index, 21 stocks advanced while 29 stocks declined.

Economy:

The government announced IIP and retail inflation data after market hours yesterday, 12 February 2020. India's Industrial Production (IIP) shrank 0.3% to 133.5 in December 2019 over December 2018. Manufacturing sector output declined by 1.2%. Electricity generation also dipped 0.1%. Mining sector output grew by 5.4% compared with December 2018.

Consumer price inflation in January rose to 7.59%, holding around six-year top. CPI rural inflation rose to 7.73% versus 7.23% in December. January core inflation also surged to 4.8% versus 3.7% in December.

Stocks in Spotlight:

Among Nifty stocks, BPCL (up 0.18%) and Nestle India (up 0.54%) will announce Q3 earnings today.

State Bank of India (up 2.56%), Titan Company (up 2.46%), Dr. Reddy's Laboratories (up 2.23%), Zee Entertainment Enterprises (up 2.11%) and Hindalco Industries (up 1.47%) advanced.

IndusInd Bank (down 2.07%), ONGC (down 1.73%), ICICI Bank (down 1.65%), Coal India (down 1.61%) and NTPC (down 1.54%) declined.

Yes Bank surged 6.82%. The bank said it has received non-binding expressions of interest from investors including JC Flowers, Tilden Park Capital, OHA UK and Silver Point Capital. The bank and its financial advisors are currently in discussions with these investors on the commercial terms, including pricing, of their investments which, it may be noted, will be subject to certain conditions and receipt of requisite approvals, including regulatory approvals with respect to the size of the stake to be acquired, as well as necessary dispensations with regard to applicable pricing guidelines. In the same exchange filing made after market hours yesterday, the private lender said that it decided to delay its December quarter earnings to on or before 14 March 2020.

Meanwhile, India Ratings and Research has downgraded Yes Bank's long-term issuer rating to 'IND A-' from 'IND A', while maintaining it on rating watch negative (RWN).

The downgrade reflects the continued delay and inconclusive quantum of the anticipated equity infusion in Yes Bank. Ind-Ra believes this could adversely impact the bank's franchise and potentially create challenges on asset and liability side. The agency notes that the bank has sizable foreign currency liabilities and institutional deposits.

The rating agency is of the view that the required capital infusion is critical for providing sufficient cushion to the possible credit cost impact from the stressed asset pool on regulatory capital requirement in the short- and medium-term, as well as for the bank's ability to continue to serve its customers adequately

Global Markets:

European shares started lower while Asian markets were trading mostly lower on Thursday after China's Hubei province reported a spike in the number of new coronavirus cases due to a tweak in methodology.

The region reported an additional 242 deaths and 14,840 new cases for February 12, bringing the total number of people who have died amid the outbreak up to 1,310. The number of new cases rose dramatically after the province changed its method of reporting cases. The province said it is starting to include clinically diagnosed cases in its figures and that 13,332 of the new cases fall under that classification.

Back in Europe, British Prime Minister Boris Johnson is set to reshape his government on Thursday as the U.K. forges a future for itself outside of the European Union.

New data from the U.K.'s Royal Institution of Chartered Surveyors on Thursday showed that British house prices rose for the first time since July 2018 last month.

In US, markets ended higher on Wednesday, with all three major benchmarks registering all-time closing highs, buoyed by signs of a slowdown in the number of new cases of COVID-19 - a strain of coronavirus that emerged in Wuhan, China late last year.

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