Benchmark indices falter on dismal macro data; banks lead slide

Mumbai, Feb. 13 (PTI): Equity benchmarks retreated on Thursday as disappointing macroeconomic data and a sharp rise in the number of new coronavirus cases in China dampened investor sentiment.

The BSE Sensex skidded 106.11 points or 0.26 per cent to settle at 41,459.79. Likewise, the NSE benchmark Nifty dropped 26.55 points or 0.22 per cent to close at 12,174.65.

Global markets wobbled after new cases from China’s coronavirus outbreak soared under a new diagnostic method, with over 200 more deaths and thousands of new patients.

On the macro front, official data released after market hours on Wednesday showed that India’s industrial output contracted by 0.3 per cent in December while retail inflation jumped to a 68-month high of 7.59 per cent in January on high food prices.

Interest-rate sensitive bank, finance and auto stocks tumbled as the high inflation dimmed the prospects of a rate cut by the RBI.

IndusInd Bank was the top loser in the Sensex pack, falling 3.68 per cent, followed by NTPC, Tata Steel, ICICI Bank, Kotak Bank and HDFC.

On the other hand, Titan, SBI, Infosys, Sun Pharma and Tech Mahindra rose up to 2.37 per cent.

Of the 30 Sensex constituents, 16 closed in the red while 14 finished with gains.

“Spike in new coronavirus cases reported across the globe and rise in inflation level for January held markets flat as investors awaited for more cues.

“Consumer price inflation indicated a prolonged pause in the interest rate from RBI as rise in core inflation from 3.5 per cent to 4.2 per cent came as a surprise which is expected to impact rate-sensitive stocks,” said Vinod Nair, Head of Research, Geojit Financial Services.

Sectorally, BSE bank, finance and utilities indices were among the major laggards, while healthcare, IT and teck climbed up to 1.06 per cent.

In the broader market, both BSE smallcap and midcap indices outperformed the benchmark.

The Indian rupee was trading on a flat note at 71.33 against the US dollar in intra-day trade.

Asian stocks closed mostly lower amid mounting concerns over the coronavirus epidemic. Bourses in Europe too were trading in the red in opening trade.

Meanwhile, the International Energy Agency (IEA) said global oil demand will suffer its first quarterly drop in a decade as the novel coronavirus has hit the Chinese economy hard and its impact ripples throughout the world.

Reacting to the IEA report, global crude oil benchmark Brent Futures slipped about 2 per cent to trade at USD 55.25 per barrel.

Rupee settles flat at 71.33 against US dollar

The rupee on Thursday settled flat at 71.33 (provisional) against the US dollar after weak macro-economic data disappointed market participants.

Forex traders said disappointing macro economic numbers and weak domestic equities weighed on the local unit, while easing crude oil prices and weakening of the American currency in the overseas market restricted the fall to some extent.

Government data on Wednesday showed that industrial output contracted by 0.3 per cent in December, while retail inflation jumped to a 68-month high of 7.59 per cent in January on high food prices.

At the interbank foreign exchange market, the rupee opened at 71.35, then lost further ground to touch a low of 71.49.

The domestic unit finally settled at 71.33 against the US dollar, unchanged from its previous close.

“Rupee continued to consolidate in a narrow range but came under pressure after data released on the domestic front was weaker-than-expectation,” said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiyaa further said, “from the US, market participants will be keeping an eye on inflation number and better-than-expected number could extend gains for the greenback. We expect the USDINR(Spot) to quote in the range of 71.20 and 71.80.”