Benchmarks extend losses; Nifty slips below 7700 mark

Indian equity benchmarks extend losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from weak global counterparts. Finance Minister Arun Jaitley while addressing members of Parliament during the ongoing Budget session stated that India’s fiscal deficit target for the current fiscal year is daunting; added pessimism on the street. The sentiments also took a hit after provisional exchange data showed that overseas investors sold shares worth 16.54 billion rupees ($273.2 million) yesterday, their biggest single-day selling since July 2. Traders were seen piling up positions in FMCG while selling was witnessed in Power, Capital Goods and Metal sector stocks. In scrip specific development, Tech Mahindra was trading weak after India’s fifth-largest software services company, reported fiscal first-quarter profit which fell by 8% Y-o-Y, missing estimates, on higher visa and hiring costs.

On the global front, the Asian markets were trading mostly in red, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,800 and 26,100 levels respectively. The market breadth on BSE was positive in the ratio of 1409:1304 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 25681.13, down by 213.84 points or 0.83% after trading in a range of 25862.68 and 25670.88. There were 5 stocks advancing against 24 stocks declining while 1 stock remained unchanged on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.19%, while Small cap index down by 0.09%.

The lone gaining sectoral indices on the BSE was FMCG up by 0.14% while, Power down by 1.21%, Capital Goods down by 1.16%, Metal down by 1.11%, Oil & Gas down by 1.08% and IT down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.75%, Bharti Airtel up by 2.68%, Hindustan Unilever up by 1.75%, ICICI Bank up by 0.77% and Tata Steel up by 0.42%. On the flip side, NTPC down by 2.52%, Mahindra & Mahindra down by 2.45%, Coal India down by 2.41%, Tata Power down by 2.35% and SSLT down by 2.32% were the top losers.

Meanwhile, in a cause of concern for the Finance Ministry, India’s fiscal deficit crossed half the budget estimate (BE) for 2014-15 in the first three months of the financial year. Fiscal deficit at the end Q1 FY15 was pegged at 56.1% of the budget estimate of Rs 5.31 lakh crore for the full fiscal year as growth in revenue receipts slowed and interest payments rose.

Total expenditure of the government during April-June was Rs 4.13 lakh crore or 23 percent of the entire year estimates. Of the total expenditure, plan spending was Rs 1,11,806 crore and non plan spending was Rs 3,01,797 crore. Conversely, revenue collection during the reported period was Rs 1,14,427 crore or 9.6 percent of the estimate, lowered than 11.1 percent of the estimates during  2013-14. Furthermore, total receipts (revenue and non-debt capital) of the government during the three months was Rs 1,15,744 crore. Revenue deficit in the three months was recorded at Rs 2,49,358 crore which was 65.9 percent of the estimates.

The government during budget 2014-15 has set fiscal deficit target at 4.1 percent of GDP this year and decided to lower it to 3 percent of GDP by 2016-17. In FY14, India’s fiscal deficit narrowed to Rs 5,08,149 crore or 4.5 percent of GDP as compared to 4.89% of GDP in the FY13. High fiscal deficit has adverse impact on country’s economy as it leads to three macro economic problems such as a balance of payments crisis, high interest rates because of crowding out and high inflation owing to the currency depreciation.

The CNX Nifty is currently trading at 7659.40, down by 61.90 points or 0.80% after trading in a range of 7716.70 and 7649.75. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 2.61%, Ultratech Cement up by 2.45%, Bharti Airtel up by 2.41%, Bank of Baroda up by 2.17% and DLF up by 1.49%. On the flip side, NTPC down by 2.62%, HCL Tech down by 2.39%, Kotak Bank down by 2.28%, SSLT down by 2.19% and M&M down by 2.16% were the top losers.

Asian markets were trading in red; Hang Seng declined by 0.91%, Nikkei 225 slid by 0.63%, Taiwan Weighted shed 0.53%, Straits Times surrendered 0.93%,  Shanghai Composite lost 0.74%,  Jakarta Composite down by 0.19%,  FTSE Bursa Malaysia KLCI down by 0.47% and KOSPI Index inched lower by 0.15%.

The European markets were trading in red; France’s CAC 40 lost 1.11%, UK’s FTSE 100 was down by 0.93% while, Germany’s DAX dropped by 1.37%.