01-15 March 2020 The Asian Independent

12 01-03-2020 to 15-03-2020 BUSINESS
www.theasianindependent.co.uk
Volatility likely amid Covid-19 fears, macro data
Mumbai : After the Indian markets
witnessed one of its worst single-day
falls on Friday, experts expect volatility
to continue in the coming week.
Investors will have a keen eye on
the purchasing managers' index (PMI)
and the auto sales numbers, to be
released during the week. Persistent
concerns in the global markets over
coronavirus (Covid-19) and possibilities
of it turning into a pandemic could
weigh on the domestic markets too,
analysts said. The subdued gross
domestic product (GDP) data for the
October-December quarter, released
on Friday, is also likely to make its
mark on the markets this week.
Slowdown continued to hamper
India's economic activity as Q3FY20
GDP growth rate was 4.7 per cent
against the revised estimate of 5.1 per
cent reported for the previous quarter.
As per the data, the revised Q2 GDP
growth rate stood at 5.1 per cent from
the earlier 4.5 per cent. "The risk to the
markets increases. Longer the infection
lasts, more widespread it gets.
The numbers, regarding the spread of
the disease, and how far it can be contained
will drive the markets next
week. Measures by the governments
to boost respective economies will
also be watched out for, after the
Chinese government support to bolster
the economy," said Vinod Nair, Head
of Research at Geojit Financial
Services. Nair said the slowdown in
global economic growth might continue
for some time, until the virus was
contained, and it might not happen
very fast. But the recovery has to happen
and investors would do well to be
focused on the long-term potential of
the markets, he added.
Siddhartha Khemka, Head of Retail
Research at Motilal Oswal Financial
Services, said, "Investors are fearful
that it might lead to global recession as
the outbreak is spreading to the
world's largest economy - the USA as
well as Europe, which will adversely
impact big time the global supply
chains, including India, and derail
economic growth."
Continuous selling by foreign institutional
investors also dented the sentiments,
he added. "The markets will
continue to remain volatile and weak
till spread of coronavirus is controlled,"
Khemka said. According
Navneet Munot, CIO of SBI Funds
Management, the coronavirus shock
may have acted as a trigger for the markets
anyway, waiting for correction.
"While it's too early to estimate the
exact impact, it's likely that policy
action will have to stay growth supportive.
Yet as growth continue to
struggle, even with all the monetary
accommodation, it only suggests that
monetary policy has hit its limits. It
only reaffirms our belief that fiscal
policy will have to play a major role
going forward to take the global economy
out of this prolonged slump,"
Munot said. Deepak Jasani of HDFC
Securities said, "In the coming week,
auto stocks will be in focus as auto
companies will start announcing
monthly sales numbers for February,
starting on 1 March."
The Markit Manufacturing PMI for
February will be declared on Monday
and Markit Services PMI on
Wednesday. Auto sales numbers for
February, scheduled on Sunday and
Monday, will be major factor for the
auto stocks. Maruti Suzuki India and
Mahindra & Mahindra on Sunday
announced sales numbers for last
month, which came on the lower side.
Maruti Suzuki reported a 1.1 per
cent year-on-year (YoY) fall in
February sales at 1,47,110 units, while
Mahindra reported a 42 per cent fall at
32,476 units.
On the technical front, Deepak
Jasani said, 11,090 would be a major
support for the Nifty50, else the current
downtrend is likely to continue.
The index would find resistance at
11,385-11,536, he said.
On Friday, the Nifty50 closed at
11,201.75, lower by 431.55 points or
3.71 per cent from its previous close.
The Sensex closed 1,448.37 points or
3.64 per cent lower at 38,297.29
points.
Manufacturing falls to
historic low in CHINA
Mukesh
Ambani calls
on Andhra
Pradesh CM
Amaravati : Reliance Group
Chairman Mukesh Ambani on
Saturday met Andhra Pradesh Chief
Minister Y.S. Jagan Mohan Reddy and
held discussions regarding industries,
investments and Reliance Group’s collaboration
with state government programmes
in education and health sectors.
Mukesh Ambani arrived in
Vijayawada by a special aircraft and
later drove to the Chief Minister’s residence
at Tadepalli in Amaravati. Jagan
Mohan Reddy received the industrialist
and had a two-hour long meeting with
him. According to the Chief Minister’s
Office, they discussed the Nadu-Nedu
scheme aimed at transforming government
schools and other welfare programmes
implemented by the YSR
Congress Party government (YSRCP)
in the state.
This was the first meeting between
the two since the Jagan Mohan Reddyled
YSRCP stormed to power in May
last year. Mukesh Ambani and his son
Ananth Ambani had congratulated
Jagan Mohan Reddy for the election
victory. Earlier, YSRCP MP Vijayasai
Reddy welcomed Mukesh Ambani at
the Gannavaran airport. Rajya Sabha
member Parimal Natwani was also
present during the meeting.
Beijing, China’s manufacturing
industry registered
its worst data in February
since official record keeping
began in 2005, with the
benchmark indicator
Purchasing Managers Index
(PMI) plummeting 14.3
points, the National Bureau
of Statistics said on
Saturday. This is a heavy
blow for analysts, who
expected a drop in the PMI,
but of only 4 to 5 points
compared to the January
data, reports Efe news. The
coronavirus crisis caused a
decline in the manufacturing
industry in February, far greater
than that recorded in its worst
reading so far in November 2008
during the global financial crisis
(38.8 points).
A figure above 50 points
implies growth and below that
implies contraction.
For context, the average recorded
in the 12 months of 2019 – the
year in which the Chinese economy
was affected by the trade war
with the US – was 49.7 points.
In the breakdown by company
size, large companies fell 14.1
points to 36.3, but medium and
small companies suffered even
more at 35.5 and 34.1, respectively.
The five sub-indices that make
up the manufacturing PMI registered
falls of between 13.2 and
23.5 integers: the production index
stood at 27.8 points; that of new
orders at 29.3; that of employment
at 31.8; the delivery time used by
suppliers at 32.1, and the provision
of raw materials at 33.9.
The hit was even worse in businesses
not related to manufacturing,
the PMI of which had never
registered a contraction since
record keeping began in 2007 and
went from being at 54.1 points in
January to 29.6 in February after a
drop of 24.5 points.
In this case, experts of the specialized
website Trading
Economics predicted a fall of just
over 7 points.
The services sector, which represents
more than half of the country’s
GDP, lost 23 points in
February ending at 30.1.
The NBS indicated that, in the
breakdown of these businesses,
only those related to financial and
monetary services and capital
market services remained in the
expansion zone.
Meanwhile, the institution also
highlighted that other sectors such
as telecommunications, radio and
television services, satellite transmission
and Internet, software and
information technology were in
the contraction zone, but much
higher than the average of the
services sector. A fact that highlights
economic pessimism in
China is the index of expected
economic activity, which measures
the confidence of non-manufacturing
companies in future market
development: it fell 19.6 points
to 40. The comprehensive PMI
production index, combining manufacturing
and non-manufacturing
industries, also registered a drop
never seen before, although in its
case it only started being published
in 2017. It went from 53 to
28.9 points after a 24.1 drop.
Meanwhile, China on Saturday
confirmed 427 new coronavirus
cases and 47 more deaths throughout
the day on Friday, representing
a rebound of 31 per cent in new
infections compared to the previous
day, while deaths on Friday
exceeded 7 per cent from a day
earlier.
The number of deaths so far in
China stands at 2,835 and the
number of confirmed cases at
79,251, the latest National Health
Commission announced on
Saturday.
GST collection up
8.3% in February at
Rs 1.05 lakh cr
New Delhi : The gross Goods and
Services Tax (GST) revenue collection in the
month of February stayed above the Rs 1
lakh crore mark for the fourth consecutive
month, at Rs 1.05 lakh crore.
GST collection last month was 8.35 per
cent higher than Rs 97,247 crore reported
during the same period last year.
Out of the total collection of Rs 1.05 lakh
crore, CGST was Rs 20,569 crore and SGST
was Rs 27,348 crore, an official statement
said. IGST collection stood at Rs 48,503
crore, including Rs 20,745 crore collected
on imports and cess collected was Rs 8,947
crore, including Rs 1,040 crore collected on
imports. The total number of GSTR 3B
Returns filed for the month of January up to
February 29 is 83 lakh. "The GST revenues
during the month of February, 2020 from
domestic transactions has shown a growth of
12 per cent over the revenue during the
month of February, 2019," said a Finance
Ministry statement. Taking into account the
GST collected from import of goods, the
total revenue during this February has
increased by 8 per cent in comparison to the
revenue during February last year "During
this month, the GST on import of goods has
shown a negative growth of (-) 2 per cent as
compared to February, 2019." The government
settled Rs 22,586 crore to CGST and
Rs 16,553 crore to SGST from IGST as regular
settlement. The total revenue earned by
Central Government and the state governments
after regular settlement in the month
of February 2020 was Rs 43,155 crore for
CGST and Rs 43,901 crore for the SGST.