Post Session: Quick Review

Continuing their retreat from record highs hit last week, local equity markets ended downbeat for yet another session, with losses of around two tenth of a percent that dragged both Sensex and Nifty below psychologically crucial 29,150 and 8,800 levels respectively. Somber global cues and prevailing caution ahead of RBI’s bimonthly monetary policy review on Tuesday mainly weighed on the sentiment. The street, which widely expects India’s central bank to keep interest rates on hold after a off-policy rate cut in January, would widely keep an eye on the central bank’s guidance regarding the quantum of rate cuts with bets ranging from 50 basis points to 100 basis points during the course of 2015. However, broader indices staging a degree of performance, concluded with gains in the range of 0.50%-1.10%.

On the global front, Asian shares languished on Monday, after the latest gauge of China's factory sector activity raised concerns about the world's second-largest economy. The final HSBC/Markit Purchasing Managers' Index (PMI) for January came in at 49.7 on a seasonally adjusted basis, just below the 50.0 level that separates growth from contraction. The figure released on Monday was slightly lower than a preliminary 'flash' reading of 49.8. Meanwhile, European shares inched higher in early trading on Monday, starting the new month on a positive note following gains in January, with Julius Baer rallying after unveiling a cost cutting plan.

Closer home, sentiment was also spooked after HSBC India Manufacturing Purchasing Managers' Index (PMI) fell to three months low of 52.9 in January 2015 from December's two-year record high of 54.5. On the sectoral front, massive demand was witnessed by stocks from Capital Goods, followed by Information Technology and Consumer Durable counters. On the flip side, major drubbing was witnessed by stocks from Fast Moving Consumer Goods, Oil & Gas and Metal counters which were the top losers of the session. In stock-specific activity, aviation stocks advanced after aviation turbine fuel were slashed by steep 11.3%.

On the result front, JSW Energy spurted over 2.50% after the company’s profit after taxes, minority interest and share of profit / (loss) of associates increased at Rs 380.19 crore for the quarter ended December 31, 2014 as compared to Rs 203.27 crore for the corresponding quarter of the previous year. However, Indian bank shares lost steam even after the bank third quarter net profit increased 4.9 percent year-on-year to Rs 277.5 crore aided by other income and operating profit. However, slow growth in net interest income and higher provisions restricted the profit growth. Total Income has increased from Rs. 21977.90 million for the quarter ended December 31, 2013 to Rs. 24184.40 million for the quarter ended December 31, 2014.

The overall market breadth on BSE was in the favour of advances, which thumped decliners in the ratio of 1614:1300, while 126 shares remained unchanged (Provisional).

The BSE Sensex ended at 29122.27, down by 60.68 points or 0.21% after trading in a range of 28958.52 and 29268.13. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in the green; the BSE Mid cap index was up by 0.56%, while Small cap index up by 1.13%. (Provisional)

The gaining sectoral indices on the BSE were Capital Goods up by 1.25%, IT up by 1.00%, Consumer Durables up by 0.94%, INFRA up by 0.79% and TECK up by 0.55% while, FMCG down by 1.77%, Oil & Gas down by 0.54%, Metal down by 0.47%, PSU down by 0.25% and Healthcare down by 0.23% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 5.44%, Hindalco up by 3.83%, Wipro up by 3.18%, Larsen & Toubro up by 1.76% and GAIL India up by 1.70%. On the flip side, Bharti Airtel down by 3.42%, Dr. Reddys Lab down by 3.06%, Hindustan Unilever down by 2.44%, ICICI Bank down by 2.40% and ITC down by 1.97% were the top losers. (Provisional)

Meanwhile, apprehensive over a massive deficit in TDS collections, Central Board of Direct Taxes (CBDT) has mandated Income Tax (IT) department to initiate special measures to achieve the direct taxes collection target for this fiscal. The board has directed I-T officials to bolster their efforts and give special emphasis on tax collections under the Tax Deducted at Source (TDS) and Advance Tax categories.

This development comes on the heels of TDS collections slipping by 50% for the fiscal. For FY2013-14, the growth under this head was 16.73%, while in FY2014-15 the growth slipped to 7.84%. The budgeted target under the direct tax category has been pegged at Rs 7.36 lakh crore for the current fiscal, while the collection has summed up to Rs 5,46,661 crore till January 23, according to CBDT.

Further, the apex policy making body of the I-T department, also asked the taxman to ensure that those assessees who have made handsome self-assessment tax declarations should be tapped to deposit it as advance tax so that the figures could be collated and reflected in this fiscal, which will end December 31.

In order to ensure better TDS and Advance Tax collections, I-T officials have been asked to make on-spot visits to defaulting organisations and also interact with officials and individuals responsible under the established official mechanism in this regard.

The department, which is confident of surpassing the budgeted tax target, has been facing a big challenge on this front because of the issuance of large amounts of refunds. The contribution of TDS to the overall gross direct taxes collections during 2013-14 fiscal was Rs 2,71,069 crore, which is 17.88% higher than the collections shown under this head from Rs 2,29,943 crore during 2012-13. Thus, the TDS category contributes over 37% to the gross direct taxes collections.

India VIX, a gauge for markets short term expectation of volatility surged 1.15% at 20.40 from its previous close of 20.17 on Thursday. (Provisional)

The CNX Nifty ended at 8797.40, down by 11.50 points or 0.13% after trading in a range of 8751.10 and 8840.80. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 5.54%, Axis Bank up by 4.97%, Hindalco up by 3.97%, Wipro up by 3.06% and IDFC up by 2.44%. On the flip side, Asian Paints down by 5.79%, Bharti Airtel down by 3.85%, Dr. Reddys Lab down by 2.91%, Bank Of Baroda down by 2.74% and Hindustan Unilever down by 2.63% were the top losers. (Provisional)

European Markets were trading in the green; UK's FTSE 100 was up by 0.17%, France's CAC was up by 0.01% and Germany's DAX was up by 0.41%.

The Asian equity benchmarks ended mostly in red on Monday, after the latest gauge of China’s factory sector activity raised concerns about the world’s second-largest economy. Malaysian markets were closed today on account of ‘Malaysia - FT Day’ holiday. Activity in China’s factory sector shrank for the second straight month in January, as the New Year got off to a rocky start for the world’s second-largest economy. The slack performance, including a 15th month of shrinking factory employment, will add to the debate over how and whether Beijing will accelerate policy easing, with most bank economists calling for a combination of rate cuts and increased liquidity to spur productive investment. The final HSBC/Markit Purchasing Managers’ Index (PMI) for January came in at 49.7 on a seasonally adjusted basis, just below the 50.0 level that separates growth from contraction. The number was slightly lower than a preliminary flash reading of 49.8 but higher than the final 49.6 in December. Hong Kong Retail Sales fell to a seasonally adjusted annual rate of -3.9%, from 4.1% in the preceding month. Indonesian Trade Balance rose to a seasonally adjusted 0.19B, from -0.42B in the preceding month. Thai CPI fell to a seasonally adjusted annual rate of -0.41%, from 0.60% in the preceding month.