Markets continues to show sluggish trend in early noon session

Indian equity markets continue to show a sluggish trend in the early noon session, trading with a cut of around half a percent, with Senxex and Nifty trading below their psychological 27000 and 8150 levels, respectively. The sentiments were under pressure after the Crisil’s research report stated that India Inc is expected to report single-digit growth in revenues for the fifth consecutive quarter. This is mainly because of fragile consumption demand, especially in the rural areas, weakness in investment-linked sectors, and the meltdown in global commodity prices.

On the global front, Asian markets were trading mixed, with liquidity back in the markets as the Chinese traders returned after a long break. Back home, traders were seen piling up position in Metal, IT, Realty, PSU and Consumer Durables, while selling was witnessed in FMCG, Bankex, Capital Goods, Power and Auto. In scrip specific development, share of Tata Motors was trading up after the company launched two new cars- Tata Bolt hatch and sedan in South Africa. The Bolt hatch and sedan, extends Tata South Africa’s passenger product portfolio, and offers an upgrade of distinctive style and remarkable features. Manufactured in Pune, India, the Bolt range has a new design language and offers comfortable and responsive driving experience.

The BSE Sensex is currently trading at 26905.60, down by 130.25 points or 0.48% after trading in a range of 26897.24 and 27120.11. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.55%, while Small cap index was marginally down by 0.06%.

The top gaining sectoral indices on the BSE were Metal up by 0.37%, IT up by 0.33%, Realty up by 0.29%, PSU up by 0.15% and Consumer Durables up by 0.10%, while FMCG down by 0.86%, Bankex down by 0.61%, Capital Goods down by 0.61%, Power down by 0.40% and Auto down by 0.27% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.69%, Vedanta up by 1.21%, Tata Motors up by 1.11%, Hindalco up by 0.92% and Dr. Reddys Lab up by 0.81%. On the flip side, ITC down by 2.05%, Lupin down by 1.35%, Reliance Industries down by 1.19%, ICICI Bank down by 1.18% and Bajaj Auto down by 1.08% were the top losers.

Meanwhile, with an aim to meet the revenue shortfall arising due to deficit in tax collection during the current fiscal year, the government is likely to seek special dividend from the top central public sector enterprises (CPSEs). The government may look into this after the release of second quarter numbers. Companies like Coal India, NTPC, ONGC, GAIL, IOC etc may be asked to pay special dividend if government decides so.

According to the current norms, profit-making CPSEs are required to declare a minimum dividend of 20 per cent or a minimum pay-out of 20 per cent whichever is higher. In case of PSUs operating in oil, petroleum, chemical and infrastructure sectors, the minimum divided pay-out should be 30 per cent of the post tax profits.

The government has said that the total revenue collection will fall short by Rs 50,000 crore (5-7 per cent) in the current financial year mainly because of subdued growth in direct taxes. Though it has reiterated that despite shortfall in direct tax collection the fiscal deficit will still remain within the budgeted target. In the current financial year, the total tax revenues are likely to be around Rs 14 lakh crore against the budget estimate of Rs 14.5 lakh crore. Besides, it had budgeted to raise Rs 69,500 crore through disinvestment in current fiscal, of which Rs 28,500 crore is to come from strategic stake sales. There are fears that government may not meet its disinvestment target.

The CNX Nifty is currently trading at 8144.70, down by 32.70 points or 0.40% after trading in a range of 8141.30 and 8196.75. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 1.86%, Bank of Baroda up by 1.85%, Tata Steel up by 1.77%, PNB up by 1.44% and Ultratech Cement up by 1.36%. On the flip side, ITC down by 2.32%, Lupin down by 1.40%, ICICI Bank down by 1.25%, Reliance Industries down by 1.13% and Axis Bank down by 1.12% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 0.07 points or 0% to 2,005.91, FTSE Bursa Malaysia KLCI increased 4.5 points or 0.27% to 1,693.75, Jakarta Composite increased 13.96 points or 0.31% to 4,501.09 and Shanghai Composite increased 102.29 points or 3.35% to 3,155.07, while Hang Seng decreased 226.85 points or 1.01% to 22,288.91, Nikkei 225 decreased 188.94 points or 1.03% to 18,134.04, Taiwan Weighted decreased 53.43 points or 0.63% to 8,441.80 and Straits Times decreased 11.38 points or 0.38% to 2,950.43.