Post Session: Quick Review

Indian markets posted a dismal session on Monday, giving up their early gains, the trade which had turned choppy in the very first hour suffered sharp sell-off in the final moments that dragged the benchmarks to their fresh over a year low. BSE Sensex slipped below the psychological 25,000 mark for the first time since July 14, 2014, while Nifty intraday breached the crucial 7550 level and barely managed to hold it by last. Amid the foreign fund exodus traders overlooked Finance Minister Arun Jaitley’s statement that factors like the Chinese devaluation of yuan and the US Fed's likely interest rate hike are 'transient' and it will be only the real economy that will dictate the currency rate fluctuations and markets in India. Foreign investors have sold Indian stocks worth nearly Rs 4,000 crore in the past four sessions on sustained global risk-off trend along with some domestic concerns like monsoon deficit, slow pace of reforms and economic slowdown. The Indian domestic institutional investors who somewhat tried to cushion the exodus of foreign investors by aggressively buying on dips, too remained cautious, as the markets are likely to remain volatile till the crucial US Fed meet, which is scheduled for September 16-17.

On the global front, the Asian markets ended mostly in red, led by the Shanghai Composite Index which again turned volatile and suffered cut of over 2 percent coming after a long holiday, despite People’s Bank of China Governor Zhou Xiaochuan stating that the rout in Chinese equities is close to ending. The European markets however made a positive start after German industrial production increased in July, signaling that Europe’s largest economy is weathering the headwinds of slowing global growth.

Back home, markets showed some recovery attempts after the initial profit taking and the Nifty regained the 7,700-mark on value-buying by investors in select blue-chips, but the mood remained concerned about the global growth as the Chinese markets were not looking to stabilize anytime soon. On the domestic front, the rupee fell to a fresh two-year low against the US dollar as foreign investors continued to liquidate their investment in the equities. Markets witnessed broad-based selling pressure with most of the sectoral indices suffering cuts of over a percent on the BSE, led by Metal, banking and healthcare stocks who suffered the most. The telecom stocks too remained under pressure on reports that Department of Telecom may go slow for auction of spectrum next year if operators do not invest in infrastructure to make optimum use of available airwaves and improve quality of services. Also, the telecom regulator Trai has issued a ‘Consultation Paper on Compensation to the Consumers in the Event of Dropped Calls’, seeking suggestions for compensating customers for deficient services on mobile phones. Bharti Airtel lost close to a percent, Idea Cellular was down by about 3%, RCom too lost over half a percent.

The BSE Sensex ended at 24893.81, down by 308.09 points or 1.22% after trading in a range of 24851.77 and 25387.32. There were just 4 stocks on the gainers side against 26 stocks on losers’ side on the index. (Provisional)

The broader indices too suffered sharp cuts; the BSE Mid cap index was down by 2.19%, while Small cap index lost 1.76%. (Provisional)

The top losing sectoral indices on the BSE were Metal down by 2.31%, Bankex down by 2.10%, Power down by 1.92%, Capital Goods down by 1.89%, Realty down by 1.75%. (Provisional)

The gainers on the Sensex were HDFC up by 0.77%, ONGC up by 0.18%, Mahindra & Mahindra up by 0.13% and Tata Motors up by 0.08%. On the flip side, ICICI Bank down by 3.63%, Axis Bank down by 3.38%, Vedanta down by 3.38%, Dr. Reddys Lab down by 2.84% and BHEL down by 2.78% were the top losers. (Provisional)

Back home, concerned over the lower than expected growth in service tax collection, the revenue department of India has notified that, it will mainly focus on five key sectors which include aviation operations, manpower recruitment and security agencies, works contract and construction which are prone to tax evasion.

With an aim to improve service tax collection and to help in service tax audit and scrutiny of returns, the service tax department has prepared sector specific profile of the five sectors which are prone to evasion. Under this, senior officials of the department will be assigned the task of profiling of each of the five sectors. The Sector specific profiling would be in addition to the manual scrutiny of service tax returns of assesses based on risk parameters which has been initiated from August 1. The detailed manual return scrutiny would be conducted in respect of such assesses whose total tax paid for 2014-15 is below Rs 50 lakh.

For the current fiscal, government has budgeted to collect around Rs 2.09 lakh crore from service tax, a growth of 25 per cent against the last financial year. Besides, during April-July of current financial year the service tax revenues surged by 20.1 per cent to Rs 60,925 crore. The rate of growth was, however, less that 75.4 per cent in case of excise and 21 per cent in case of customs.

The CNX Nifty ended at 7552.95, down by 102.10 points or 1.33% after trading in a range of 7545.90 and 7705.05. There were just 6 stocks in green against 43 stocks on red on the index. (Provisional)

The gainers on Nifty were Tech Mahindra up by 1.09%, HDFC up by 0.90%, Yes Bank up by 0.59%, Tata Motors up by 0.34% and ACC up by 0.19%. On the flip side, NMDC down by 4.43%, Bosch down by 3.97%, ICICI Bank down by 3.39%, Vedanta down by 3.38% and Axis Bank down by 3.33% were the top losers. (Provisional)

European markets were trading in green, France’s CAC increased by 11.92 points or 0.26% to 4,535.00, UK’s FTSE 100 increased 30.28 points or 0.5% to 6,073.20 and Germany’s DAX was higher by 38.68 points or 0.39% to 10,076.72.

The Asian markets closed mostly in red on Monday with China stocks ending lower after a volatile day as investors sold shares in the aftermath of a four-day market holiday. China’s central bank governor notified that China’s currency has stabilized against the dollar after the country’s surprise announcement last month to revalue the yuan amid stock market turmoil. He added that at present, the exchange rate of RMB against dollar tends to be stable, and most of the correction of the stock market has taken place, so the financial market is expected to be more stable. China has revised its annual economic growth rate in 2014 to 7.3% from the previously released figure of 7.4%. Gross domestic product stood at 63.6 trillion yuan last year, down by 32.4 billion yuan from the initial estimate. The bureau has revised down 2014 growth of the services sector by 0.3% points to 7.8%, which helped drag down estimated GDP growth rate. The primary sector - the agriculture sector - grew 4.1% last year, while growth of the secondary sector, which includes manufacturing and construction, rose 7.3%. After the revision, the services sector accounted for 48.1% of GDP last year, down from the previously announced 48.2%. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 3.96B, from 3.62B in the preceding month.