Market ends the session in red, IT stocks decline
Indian equity benchmarks traded weakly throughout the day on Friday and ended the session on a pessimistic note, led by a decline in IT stocks.
Key bourses made a cautious start and traded lackluster as traders remained concerned with rating agency ICRA’s report that it expects further deterioration in the growth of India's GDP to 4.7 per cent in Q2 of FY20, due to weakening momentum in the industry. ICRA also forecasts the country's gross value added at basic prices in the YoY basis to 4.5 per cent in the quarter that ended in September of FY20.
Some pessimism also came in with a report that the Centre is delaying the transfer of states’ share of GST collection, which has been consistently falling this fiscal. A majority of the states are going slow on their budgeted spending as it rose only 8.7 per cent in the first half of the year.
The markets continued their free-fall during the final hour of trade, as traders were on their backfoot with the report, claiming India needing another 22 years of sustained growth to become a developed country. The former Reserve Bank of India (RBI) governor, C Rangarajan, said that at the current growth rate, India becoming a US$5 trillion economy by 2025 is simply out of question.
Traders also took note of the government’s report that that public sector banks (PSBs) disbursed loans worth Rs 2.53 lakh crores in October, the month, in which, they carried out two phases of customer outreach programme under the government prodding in 374 districts of the country.
The BSE Sensex ended at 40,359.41, down by 215.76 points or 0.53 per cent. The broader indices ended mixed, with the BSE Midcap index slipping 0.11 per cent while the Small cap index was up by 0.02 per cent.
The top gaining sectoral indices on the BSE were Metal up by 2.18 per cent, Basic Materials up by 0.64 per cent, Power up by 0.62 per cent, Realty up by 0.62 per cent, and Utilities up by 0.53 per cent. Meanwhile, the top decliners on BSE were IT down by 2.14 per cent, Telecom down by 2.06 per cent, TECK down by 2.02 per cent, Capital Goods down by 1.04 per cent, and BANKEX down by 0.73 per cent.