The domestic stock market sharply came off day's low and ended with modest losses on Wednesday. The S&P BSE Sensex, fell 214.22 points or 0.55% at 38,409.48. It fell as much as 777.60 points, or 2.01% to hit the day's low of 37,846.10 in afternoon trade.
The Nifty 50 index lost 49.10 points or 0.43% at 11,254.20. It fell as much as 221.15 points, or 1.96% at the day's low 11,082.15.
Shares slumped in the afternoon after India's Health Minister Harsh Vardhan said that a total of 28 cases of coronavirus have been confirmed in India. The media reports of United States conducting an airstrike against Taliban in Nahr-e Saraj of Helmand district also triggered selling. However, as the day was drawing to close, investors resorted to aggressive buying at lower levels helping the bellwether indices recover most of their losses.
In the broader market, the BSE Mid-Cap index and the BSE Small-Cap index fell by 1.61% each. Both these indices steeply underperformed the Sensex.
The market breadth was weak. On the BSE, 687 shares rose and 1713 shares fell. A total of 134 shares were unchanged.
Economy:
The government on Wednesday approved 100% Foreign Direct Investment (FDI) in Air India by foreign entities/NRIs under the automatic route. Earlier, the FDI limit permitted for NRIs was 49%. After its unsuccessful bid to sell Air India in 2018, the government this time has decided to offload its entire stake.
Meanwhile, the IHS Markit India Services PMI increased to 57.5 in February 2020 from 55.5 in January 2020. The latest reading pointed to the strongest pace of expansion since January 2013, as both new orders and output rose at a faster pace.
Coronavirus Outbreak:
India's Health Ministry on Wednesday said another case in Jaipur, wife of the already confirmed Italian patient, has been confirmed for COVID-19. 14 Italians and one Indian, who were part of the team of the Jaipur COVID-19 confirmed case, are also initially confirmed positive for COVID-19. Six family members at Agra, who are family members of the COVID19 confirmed case from Delhi, are confirmed for COVID-19. In addition, two cases with high viral load have been detected in Telangana.
Although coronavirus started in central China, it is spreading faster in the rest of the world. The epidemic has grown to infect over 92,000 people with over 3,000 fatalities.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.229% at 16:55 IST compared with 6.342% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.28, compared with its close of 73.195 during the previous trading session.
In the commodities market, Brent crude for May 2020 settlement rose 35 cents to $52.21 a barrel. The contract fell 4 cents or 0.08% to settle at $51.86 a barrel in the previous trading session.
Foreign Markets:
US Dow 30 futures jumped about 550 points as the former US vice president Joe Biden scored big wins on Super Tuesday, resurrecting his campaign. Biden was projected to win many as nine states including Texas, Virginia and Minnesota. Sanders, meanwhile, captured Utah, Vermont and Colorado. He was also leading in California.
European stocks advanced while most Asian markets ended higher on Wednesday, reacting to the US Federal Reserve announcing an emergency 50 basis point cut to interest rates on Tuesday.
Meanwhile, the United States conducted an airstrike against Taliban in Nahr-e Saraj of Helmand district, US military spokesperson told the media on Wednesday. This was a defensive strike to disrupt the attacks, he said. This comes hours after more than 20 Afghan soldiers and police officers were killed in northern Afghanistan overnight in the latest Taliban attack.
The US market finished sharply lower on Tuesday, after a volatile trading session, and Treasury yields fell to historic lows, with Wall Street deeming a surprise inter-meeting interest-rate cut from the Federal Reserve insufficient to restore confidence in a market that has been rocked by worries about the spread of coronavirus world-wide.
The decline for markets came as the Fed announced a half-a-percentage-point rate cut, saying that while the economy's fundamentals remain strong, the "coronavirus-poses evolving risks to economic activity."
Buzzing Segments:
The Nifty IT index rose 0.87% to 15,859.65. The index has risen 4.25% in three trading days. A weak rupee boosts revenues of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Wipro (up 2.28%), TCS (up 2.17%) and Mindtree (up 0.06%), advanced.
Tech Mahindra rose 2.45%. The company sold Terra Payment Services (Netherlands) BV & its subsidiaries for an upfront payment of $9 million and a bonus pay-out upto $13.8 million to Prime V Holding 2 EV and Partech Africa SLP as on Tuesday, 3 March 2020 on a slump sale basis. The companies entered into an agreement on 12 September 2019.
Infosys added 1.65% after the company announced a strategic long-term partnership with K+S AG to support the latter's 'Shaping 2030 Strategy'. Infosys will setup two state-of-the-art, centralized and dedicated datacentres in Kassel, Germany and 16 regional datacentres in Europe, USA, Canada, and South America along with a public cloud ecosystem.
The Nifty Pharma index rose 1.98% to 8,077.10, extending gains for second day. The index has added 7.19% in two sessions.
Cipla (up 5.17%), Dr Reddy's Laboratories (up 4.2%), Sun Pharmaceutical Industries (up 3.14%), Glenmark Pharmaceuticals (up 2.34%), Lupin (up 2.22%), Aurobindo Pharma (up 1.83%) and Wockhardt (up 1.34%) advanced.
Strides Pharma Science fell 0.89%. The company said it received USFDA's approval for Tetracycline Hydrochloride capsules. Tetracycline Hydrochloride capsule is an antibiotic used to treat many different bacterial infections of the skin, intestines, respiratory tract, urinary tract, genitals, lymph nodes, and other body systems.
Cadila Healthcare fell 1.61%. The company said it received a final approval from the United States Food & Drug Administration (USFDA) to market Emtricitabine and Tenofovir Disoproxil Fumarate tablets. The medicine will be used with other HIV medications to help control HIV infection. The company said the drug will be manufactured at the Zydus Cadila's manufacturing facility at Special Economic Zone (SEZ), Ahmedabad, Gujarat.
Shares of hospitality, aviation and rail travel firms declined as the coronavius outbreak is suppressing the travel and tourism industry.
HLV (down 10.58%), Lemon Tree Hotels (down 7.68%), Indian Hotels Company (down 6.89%), India Tourism Development Corporation (ITDC) (down 5.85%), Chalet Hotels (down 5.78%), TajGVK Hotels & Resorts (down 4.79%) and EIH (down 2.61%) declined.
Among aviation stocks, Interglobe Aviation (Indigo) (down 2.60%) and SpiceJet (down 4.64%), fell.
Shares of IRCTC, which handles the catering, tourism and online ticketing operations of Indian Railways, hit a lower circuit limit of 10% to Rs 1565.20.
Stocks in Spotlight:
Selling in Bajaj Finance (down 3.79%), HDFC Bank (down 2.74%) and ICICI Bank (down 1.54%) put pressure on key benchmarks.
Cigarette major ITC tumbled 3.30% to Rs 187.45. It hit a 52-week low of Rs 186.60 in intraday today.
Vedanta fell 0.46% after Moody's Investors Service downgraded Vedanta Resources corporate family rating (CFR) to B1 from Ba3. Moody's also downgraded the rating on senior unsecured bonds issued by Vedanta and those issued by its wholly owned subsidiary, Vedanta Resources Finance II Plc and guaranteed by Vedanta, to B3 from B2. The outlook on all ratings is stable. The downgrade of Vedanta's ratings was triggered by a sustained deterioration in the company's credit profile, and our expectation that its credit metrics will remain weak for the previous ratings, Moody's said in a press release.
Larsen & Toubro (L&T) fell 0.38%. The company's water & effluent treatment business secured a 'significant' order from Oman. The order is for the design and execution of a water infrastructure project to enhance the Al Dhakhlia Water Transmission System, Phase - II. The company said that this is a repeat order from the client and has been secured under international competitive bidding. As per the L&T's classification, the valuation of the 'significant' order stands between Rs 1,000 and 2,500 crore.
Hindustan Aeronautics (HAL) fell 3.75% after it received a notice from International Court of Arbitration of the International Chamber of Commerce (ICC) on request for arbitration from RUAG Aerospace Services GMBH. HAL has initiated necessary action with reference to arbitration process. The amount in dispute partially quantified by the opponent party is $21,872,500 (i.e. EUR 20,000,000) against alleged damages on breach of agreement regarding supply of structural parts for production of Dornier-228, by HAL. Shares of HAL was down 3.10% to Rs 652.
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