MARKET WRAP: Sensex slips 214 pts, Nifty ends at 11,251; pharma, IT advance

All that happened in markets today

2:30 PM

CARE Ratings' view RBI rate cut possibility

The RBI has already put out an assurance that it would be willing to support the economy in case of the spread of the effects of coronavirus, which is being monitored closely. It is understood that Indian enterprise will be impacted by the virus even if the spread is not within the country. Therefore there is reason to believe that the RBI may pitch in for a rate cut of up to 50 bps. The interesting thing is whether this will happen before the policy or on the policy date which is April. We believe that the rate cut can come sooner and will be before the formal policy is announced in April.

2:24 PM

Govt to allow telecom firms to defer payments of future spectrum auctions

“Considering the stress in the sector, the government has given an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction instalments dues for 2020-21 and 2021-22, either for one or both years,” Minister of State for Communications Sanjay Dhotre informed the Lok Sabha today. READ MORE

2:20 PM

NEWS ALERT | Lok Sabha passes Direct tax Vivad Se Vishwas Bill 2020

2:15 PM

Asian Markets check

Asian shares were poised to drop on Wednesday and bonds soared, after an emergency rate cut from the US Federal Reserve was unable to quell investor fears over the coronavirus’s widening fallout.

More than 3,000 people have been killed by the coronavirus, about 3.4 per cent of those infected - far above seasonal flu’s fatality rate of under 1 per cent. It continues to spread quickly beyond the outbreak’s epicenter in China, with Italy overnight reporting a jump in deaths to a total of 79.

In Asia, Australia’s S&P/ASX 200 index fell 1.4 per cent in early trade. Nikkei futures NKc1 traded in negative territory and e-mini futures for the S&P 500 ESc1 fell 0.4 per cent. Trade in Treasury futures implied a yield of 0.86 per cent on US 10-year paper.

Oil prices slipped, with Brent crude falling 30 cents to $51.90 per barrel.

(Reuters) 

2:13 PM

Venky's cracks 9% as poultry sales decline over Coronavirus fears

Shares of Venky's, the poultry processing company, declined over 9 per cent on Wednesday amid sharp decline in poultry sales in the wake of fast spreading deadly Coronavirus (Covid-19).

 

At 01:49 pm, the stock was trading around 7 per cent lower at Rs 1,133 apiece on the BSE. In comparison, the S&P BSE Sensex was trading 635 points or 1.64 per cent lower at 37,989 levels. READ MORE

2:11 PM

Rate cut losing its potency as an instrument to stimulate growth: Analysts

In a bid to battle the economic fallout emanating from deadly Coronavirus (Covid-19), the US Federal Reserve (US Fed) cut its benchmark policy rates by 50 basis points (bps) in the range of 1 to 1.25 per cent on Tuesday. However, the emergency rate cut failed to cheer investors as US stocks tumbled. Market participants worried whether pumping more money into financial markets would address the central problem – a cut in business activity as workers and consumers stay home. READ MORE HERE

2:10 PM

NEWS ALERT | Have to deal Covid-19 at an emergency level: Delhi CM Arvind Kejriwal

2:09 PM

MARKET COMMENT :: IIFL

It is now reasonable to assume a demand hit in India, regardless of how widely Covid-19 spreads here. Factors contributing to this will include global supply-chain disruptions and demand weakness. Consensus’ Nifty EPS growth expectations are very optimistic and will witness significant downgrades. Between Auto, Discretionary, Pharma and SBI, 30% of Nifty EPS is at risk.

Also, financials (ex-SBI) make up 32% of Nifty EPS and should witness a negative impact from further slowdown. The balance 38% is relatively safe and would include IT, FMCG, Utilities and RIL (where retail and telecom upgrades may compensate for core business earnings weakness). Stretched government fisc will limit stimulus

2:08 PM

COMMENT :: Market outlook by ICICI Securities

COVID-19 episode is an unknown variable for global growth, and investors have acknowledged it by driving stock prices lower by ~11% from recent highs. Meanwhile, counter-measures by policy makers are underway and are being weighed by markets. Valuations have improved on NIFTY50 forward P/E (16.65x), India market cap to GDP (74%) and 10-year government bond – NIFTY50 forward earnings yield spread (30 bps) due to the correction

2:07 PM

Barclays on RBI rate cut possibility

With the inflation target breach likely to be temporary, we think the RBI is done with cutting rates – although there may be some space for a resumption in H2 20, if inflation falls below the mid-point of the target range, as we predict

2:06 PM

Coronavirus outbreak :: BofA Securities on economic growth, rate cut

We monitor the effect of the slowdown in China, due to the COVID-19 outbreak, on India's growth. We do not see much impact if China's 1Q20 GDP growth slows to our economists' 4.2% forecast. However, if the situation were to worsen, we estimate India's 1H20 growth could drop about 50bp cumulatively on disruptions in China-India trade, including pharma/electronics input imports, as well as in global markets. Tuesday's Fed cut supports our call of 50bp RBI rate cut in 2020.

2:04 PM

Coronavirus outbreak :: ICRA negative on cotton spinning sector

With no meaningful recovery in sight and continued uncertainty on the extent and duration of the impact of the coronavirus outbreak, ICRA maintains a ‘Negative’ outlook on the cotton spinning sector assigned in August 2019. There has been a visible weakening in credit profile of domestic cotton spinners in the current fiscal, corroborated by a credit ratio (upgrade to downgrade) of ~0.6 times in YTD FY2020

2:03 PM

Coronavirus Update

2:01 PM

NEWS ALERT | China's February retail passenger car sales see a fall of 80% YoY: Prelim data

(Reports CNBC TV18 quoting Agencies)

2:00 PM

IRCTC hits 10% lower circuit