Benchmarks end choppy trade with modest losses

Extending their southward journey for third straight session, Indian equity markets ended the choppy day of trade slightly in the red on Wednesday pressurized by feeble global cues. Investors also remained on sidelines ahead of the second quarter earnings with Infosys to kick-start the September quarter earnings season on Friday. Choppiness persisted till the end and markets despite some last hour recovery could not manage a close in green. Market-participants failed to draw any sense of relief from World Bank’s twice-a-year South Asia Economic Focus report, which has stated that Indian economy, which accounts for 80 percent of South Asia’s output, is set to grow by 6.4 percent in 2015-16 as against 5.6 percent in 2014-15. It has further stated that over the next year or so economic growth should be supported by the recovering US economy that would provide a market for Indian merchandise and service exports. There have been similar voices from the other global agency IMF, which has said that India has recovered from its relative slump and its growth is expected to exceed five percent again. Besides, markets also failed to draw heart from the report that net direct tax collection has risen 7.09 per cent to Rs 2,68,836 crore in the first six months of the current fiscal year.

Global cues too remained subdued with European markets making an awful start amid global growth concerns after IMF cut global growth forecasts and weak industrial production data from Germany. Asian markets ended weak amid growth concerns in China, the world's second largest economy. Shares in Japan witnessed a sell-off dropping to a five-week low amid global growth concerns while the appreciating yen also dampened sentiment for exporters’ stocks.

Back home, sell-off in software and technology counters mainly dampened the sentiments after rating downgrade by investment banker, saying that the bull run of the IT sector is nearing its end. Pharma shares too witnessed profit taking after International Monetary Fund (IMF) cut its outlook for global growth. On the flip side, shares of public sector oil marketing companies (OMCs) edged higher after Brent crude fell to 27-month low on global growth and oil glut concerns. Not only the oil marketing companies but the upstream companies like ONGC and Oil India too moved higher on hopes of less subsidy burden sharing. Additionally, fertiliser stocks like RCF and Chambal Fertilizers too remained in limelight on reports suggesting that the government has notified new urea investment policy, saying plants will continue to receive subsidy for 8 years post commencement of production.

The NSE’s 50-share broadly followed index Nifty declined by around ten points to end below the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over twenty points to finish below its psychological 26,250 mark. Broader markets struggled to get any traction and ended the session mixed. The market breadth remained in favor of decliners, as there were 1,339 shares on the gaining side against 1,566 shares on the losing side while 121 shares remain unchanged.

Finally, the BSE Sensex declined by 25.18 points or 0.10%, to 26246.79, while the CNX Nifty lost 9.70 points or 0.12% to 7,842.70.

The BSE Sensex touched a high and a low of 26338.31 and 26150.09, respectively. The BSE Mid cap index was down by 0.23%, while the Small cap index was up by 0.06%.

The top gainers on the Sensex were Tata Steel up by 3.52%, Larsen & Toubro up by 2.32%, ONGC up by 2.30%, NTPC up by 2.24% and BHEL up by 2.10%. On the flip side, Infosys down by 4.70%, Dr. Reddys Lab down by 4.37%, Sun Pharma down by 4.31%, Wipro down by 4.03% and Cipla down by 2.51% were the top losers in the index.

On the BSE Sectoral front Oil & Gas up by 1.69%, PSU up by 1.61%, Capital Goods up by 1.61%, Realty up by 1.57% and Metal up by 1.13% were the top gainers, while IT down by 3.44%, Healthcare down by 3.27 % and TECK down by 2.83% were the only losers in the space.

Meanwhile, India’s gross direct tax collection grew by 15 percent to Rs 3.46 lakh crore during April-September FY15 against Rs 3.01 lakh crore collected during the same period last year. The Finance Ministry has fixed gross direct tax collection target of Rs 7,36,221 crore for FY15, which is around 15 percent higher than the last fiscal's revised estimates. However, net direct tax collection has risen only 7.09 percent to Rs 2,68,836 crore in the first half of the current fiscal.

Gross corporate taxes collection increased by 15.31 percent to Rs 2,22,616 crore during April-September FY15, from Rs 1,93,054 crore in the year-ago period. Gross collection of Personal Income Tax, including STT and Wealth Tax, grew by 14.37 percent to Rs 1,23,528 crore in the first six months of the current fiscal, from Rs 1,08,009 crore in the same period of previous fiscal. Advance tax collections have shown a growth of 15.28 percent during the first half of current fiscal as against the growth of 7.66 percent shown at the same time previous year. Growth in Tax Deduction at Source (TDS) recorded at 9.47 percent in April-September of FY15 fiscal as against 14.22 percent in the same period last year.

Tax collection is the major source of revenue for the government. The government estimates to garner Rs 13.64 lakh crore from both direct and indirect tax collections during the FY15. In the previous fiscal year, tax collections fell short of target by a whopping Rs 77,000 crore as the government collected Rs 11.58 lakh crore against the budget estimate of Rs 12.35 lakh crore.The CNX Nifty touched a high and low of 7,869.90 and 7,815.75 respectively.

The top gainers of the Nifty were DLF up by 4.80%, IndusInd Bank up by 4.58%, Tata Steel up by 3.83%, BPCL up by 3.72% and BHEL up by 2.81%. On the other hand, Tech Mahindra down by 4.74%, Infosys down by 4.73%, Dr. Reddy's Laboratories down by 4.49%, Wipro down by 4.45% and Sun Pharmaceuticals Industries down by 4.24% were the top losers.

European markets were trading in red, France’s CAC 40 was down by 0.74%, United Kingdom’s FTSE 100 was down by 0.53% and Germany’s DAX was down by 0.81%.

Asian markets ended mostly in red on Wednesday, after the International Monetary Fund cut its forecast for global growth. The IMF however stated that Japan’s gross domestic product will expand 0.8 percent next year, compared with a 1.1 percent advance predicted in July. China’s benchmark stock index rose to a 19-month high, led by property developers, after policy makers eased real-estate curbs for the first time since the global financial crisis. Growth in China’s services sector weakened slightly in September as new business cooled, reinforcing signs of a slowdown in the world’s second-largest economy that could prompt more stimulus measures. The services Purchasing Managers’ Index (PMI) compiled by HSBC/Markit pulled back to 53.5 in September from a 17-month high of 54.1 in August.

Japan’s Current Account rose to a seasonally adjusted 0.13T, from 0.10T in the preceding month while Japan’s Economy Watchers Current Index remained unchanged at a seasonally adjusted 47.4 compared to the preceding month. Philippines CPI rose to a seasonally adjusted annual rate of 0.1%, from 0.3% in the preceding quarter.