Benchmarks witness bloodbath; Nifty breaches 8,800 mark

Indian barometer gauges witnessed bloodbath on Monday with both the major indices losing over two percentage points, their biggest single-day drop in two months, on increased expectation of a rate hike by US Federal Reserve following stronger-than-expected jobs data.  Selling was both brutal and wide-based as none of sectoral indices, barring healthcare, on BSE were spared and key gauges ending below their crucial 8,800 (Nifty) and 28,900 (Sensex) levels. Counters, which featured in the list of worst performers, include banking, power, capital goods and realty.

Sentiments remained down-beat since start of the trade as  marketmen remained cautious with an Assocham’s post-Budget survey of CEOs and CFOs, where majority of them have said that they find revised GDP data of over 7 percent growth as “too good to be realistic” and too optimistic since the underlying situation is not all that upbeat. Traders also failed to draw any sense of relief from reports that the current fiscal Direct tax collection increased by 10.67 per cent to Rs 6.12 lakh crore during April-February FY15, compared to Rs 5.53 lakh crore in the same period last fiscal (FY14). Corporate tax collection grew by 9.99 per cent at Rs 3.79 lakh crore, compared to Rs 3.45 lakh crore during the corresponding period of last fiscal.

Selling got intensified as European markets made an awful start with CAC, DAX and FTSE all were trading with a cut of over half a percent in early deals after data showed that German exports in January fell by the largest amount since August, dropping far more than expected, while data from China showed a slide in imports. Asian markets ended lower tracking a sell-off on Wall Street after strong US jobs data fanned expectations that the Federal Reserve may raise interest rates sooner than previously thought.

Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. The rupee was trading at 62.56 at the time of equity markets closing versus its previous close of 62.16. Meanwhile, slump in banking counter too played spoil sport for the Indian equity markets. Private lenders witnessed profit taking after sharp gains post the Budget proposal of fungibility of FDI and FPI which would allow private sector lenders to raise additional foreign capital. Shares of software and technology counters also witnessed profit taking despite the weakening rupee after TCS flagged that growth in the March quarter would remain in-line with last year trend adding that cross currency headwinds would impact rupee revenue by 275 basis points and dollar revenue by 200 basis points. Shares related to metal space too edged lower on fears that higher rates paid to acquire coal mines would hurt margins going forward.

The NSE’s 50-share broadly followed index Nifty tumbled by over one hundred and eighty points to end below the psychological 8,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over six hundred points to finish below its psychological 28,900 mark. Broader markets too witnessed blood-bath and ended the session with a cut of around a percentage point. The market breadth remained in favor of decliners, as there were 977 shares on the gaining side against 1,889 shares on the losing side while 107 shares remain unchanged.

Finally, the BSE Sensex dropped by 604.17 points or 2.05% to 28844.78, while the CNX Nifty plunged by 181.00 points or 2.03% to 8,756.75.

The BSE Sensex touched a high and a low of 29321.06 and 28799.76, respectively. The BSE Mid cap index was down by 1.30%, while Small cap index was down by 0.92%.

The top gainers on the Sensex were Hindustan Unilever up by 3.76%, Dr. Reddys Lab up by 0.68%, Sun Pharma up by 0.41% and Maruti Suzuki up by 0.01%. On the flip side, Sesa Sterlite down by 5.21%, Hindalco down by 4.70%, BHEL down by 4.55%, GAIL India down by 4.52% and ICICI Bank down by 4.33% were the top losers.

The top gaining sectoral indices on the BSE were Healthcare up by 0.30%, while Bankex down by 3.01%, Power down by 2.93%, Capital Goods down by 2.74%, Realty down by 2.58%, Metal down by 2.40%. were the losing indices on BSE.

Meanwhile, during the 11-month period, April-February in the current fiscal Direct tax collection increased by 10.67 per cent to Rs 6.12 lakh crore, compared to Rs 5.53 lakh crore in the same period last fiscal (FY14).

Corporate tax collection grew by 9.99 per cent at Rs 3.79 lakh crore, compared to Rs 3.45 lakh crore during the corresponding period of last fiscal. Similarly, the personal Income Tax collection, was up by 11.10 per cent, at Rs 2.25 lakh crore in the April-February period as against Rs 2.02 lakh crore in the same period last year. Securities Transaction Tax (STT) collection showed a huge surge of 45.44 per cent at Rs 6,280 crore in the 11-month period due to buoyancy in the stock market. On the other hand the net direct tax collection rose at a slower pace of 6.88 per cent to about Rs 5.06 lakh crore, as against Rs 4.74 lakh crore in the same period last year, mainly due to higher refunds.

Government had targeted Rs 7.36 lakh crore revenue mop up from the Direct taxes in Budget 2014-15, but had revised it downwards to 7.05 lakh crore as per the revised estimate in the Budget for 2015-16. Although, growth in TDS declined to 7.49 per cent as against 16.69 per cent in the same period last year, advance tax collection has shown a growth of 13.41 per cent during April-February period 2014-15, as against the growth of 8.67 per cent shown at the same time previous year.

The CNX Nifty touched a high and low of 8,891.30 and 8,740.45 respectively.

The top gainers on Nifty were Jindal Steel & Power up by 4.56%, Hindustan Unilever up by 3.44%, Lupin up by 1.73%, Dr. Reddy's Laboratories up by 0.67% and Sun Pharmaceuticals Industries up by 0.30%. On the flip side, Sesa Sterlite down by 5.62%, Hindalco Industries down by 5.06%, Axis Bank down by 4.35%, ICICI Bank down by 4.33% and GAIL (India) down by 4.29% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 0.29%, UK's FTSE 100 was down by 0.67% and France's CAC was down by 0.54%.

The Asian markets ended mostly in red on Monday, taking cues from the US markets last week as data pointed to economies in the region still struggling to re-ignite growth. China’s exports picked up in the first two months of 2015, propelled by February’s exceptionally strong performance that was inflated by the timing of Lunar New Year, while a slide in imports pointed to persistent weakness in the economy. Data released by the General Administration of Customs showed that China posted a record trade surplus of $60.6 billion last month. Exports rose 15% during the January-February period from a year earlier, quickening from a 6.1% annual rise in the whole of 2014 as demand from major markets improved.

Japan’s GDP price index rose to a seasonally adjusted annual rate of 2.4%, from 2.3% in the preceding quarter. Japan’s Economy Watchers Current Index rose to a seasonally adjusted 50.1, from 45.6 in the preceding month while Japan’s Current Account rose to a seasonally adjusted 1.06T, from 0.85T in the preceding month whose figure was revised down from 0.98T. Taiwanese Trade Balance fell to a seasonally adjusted annual rate of 4.56B, from 4.80B in the preceding month while Taiwanese CPI rose to a seasonally adjusted annual rate of -0.19%, from -0.94% in the preceding quarter.