The Sensex and the Nifty slumped in afternoon trade with the Nifty slipping below the 11,200 level. Sentiment was dented after India's Health Minister Harsh Vardhan on Wednesday said that a total of 28 cases of coronavirus have been conformed in India. The minister said that all the international tourists coming to India are being screened at airports. A meeting of the Group of Ministers will take place today at 15:00 IST to take stock of the situation.
At 13:28 IST, the S&P BSE Sensex, was down 464.47 points or 1.20% at 38,159.23. The Nifty 50 index was down 121.80 points or 1.08% at 11,181.50.
The broader market tumbled. The S&P BSE Mid-Cap index was down 2.14% while the S&P BSE Small-Cap index was down 2.03%. Both these indices underperformed the Sensex.
The market breadth was weak. On the BSE, 528 shares rose and 1667 shares fell. A total of 122 shares were unchanged. In Nifty 50 index, the breadth was negative with 13 stocks advancing and 17 stocks declining.
Economy:
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.
Commenting on the latest survey results, Pollyanna de Lima, Principal Economist at IHS Markit, said: "Growth in India's service sector accelerated further halfway through the final quarter of fiscal year 2019-20, with the trend for business activity improving in each month since last September when the sharpest contraction for 19 months was recorded. Behind the resilience in the trend for business activity stands healthy demand for services from both the domestic and international markets.
The data also showed that service providers experienced a marked improvement in workforce productivity, with the sharp rise in business activity happening despite a softer and only modest increase in employment."Positive gains in new work across the manufacturing and service sectors suggest that private sector output will likely increase markedly again in March, boding well for final quarter GDP following expectations of a flat growth rate in Q3 FY 2019/20."
Stocks in Spotlight:
Cipla (up 3.24%), Sun Pharmaceutical Industries (up 2.44%), Dr. Reddy's Laboratories (up 2.56%), Asian Paints (up 2.27%) and Power Grid Corporation of India (up 1.38%) advanced.
Tata Motors (down 5.91%), Yes Bank (down 5.29%), Tata Steel (down 5.23%), Eicher Motors (down 5.01%) and State Bank of India (down 3.93%) declined.
Tech Mahindra 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. Shares of Tech Mahindra were up 0.56% at Rs 756.80.
Infosys rose 0.90% to Rs 753.05 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
Vedanta fell 3.47% to Rs 115.40 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 slipped 0.07% to Rs 1181. 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.
Global Markets:
European stocks opened mostly lower while most Asian markets declined on Wednesday as an emergency rate cut from the US Federal Reserve did little to soothe investor fears over the coronavirus's widening fallout.
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."
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