Benchmarks extend losses; Nifty slips below 7,100 mark

Indian equity benchmarks extended its downward journey hovering near the lowest point of the day in the late afternoon session taking cues from global counterparts. The selling pressure was visible across the sectors due to heavy selling by funds and retail investors. The sentiments were under pressure from early trade after US Federal Reserve Chair Janet Yellen in her testimony stated that tightening financial conditions driven by falling stock prices, uncertainty over China and a global reassessment of credit risk could throw the US economy off track from an otherwise solid course. Traders were selling in Realty, Capital Goods and Power sector stocks. In scrip specific development, State Bank of India (SBI) was trading under pressure after reporting a 62 percent slump in its net profit because of higher bad loans in the December quarter. India’s biggest lender by assets posted a net profit of Rs 1,115 crore against estimates of Rs. 3,300 crore in Q3. The profitability was hit because of a 60 percent rise in provisions for bad loans. On the other hand, Dr. Reddy’s Laboratories was trading in green as the company is going to consider buyback of equity shares in its meeting to be held on February 17, 2016.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,100 and 23,300 levels respectively. The market breadth on BSE was negative in the ratio of 321:2199 while 97 scrips remained unchanged.

The BSE Sensex is currently trading at 23294.64, down by 464.26 points or 1.95% after trading in a range of 23236.84 and 23758.46. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.18%, while Small cap index down by 3.24%.

The losing sectoral indices on the BSE were Realty down by 3.38%, Capital Goods down by 3.05%, Power down by 2.95%, Metal down by 2.79%, PSU down by 2.63%.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.06%, Bharti Airtel up by 0.77%, Cipla up by 0.36% and Bajaj Auto up by 0.12%.

On the flip side, BHEL down by 4.96%, ONGC down by 4.37%, Maruti Suzuki down by 3.05%, Lupin down by 3.05% and Larsen & Toubro down by 2.92% were the top losers.

Meanwhile, despite a likely shortfall in direct tax collections, the government will achieve its tax revenue target for the current year 2015-16 through a strong upswing in indirect taxes such as excise, customs and service tax. Revenue Secretary Hasmukh Adhia said that they are likely to exceed the collection in Indirect Tax by about Rs 40,000 crore in the current year and are positive to achieve 100 percent tax revenue target for the current year.

As per the latest revenue numbers, the tax collections between April-January showed a healthy growth of 33 percent in Indirect Tax and 10.9 percent in Direct Tax. Accordingly, as against the annual Budgetary Estimate (BE) target for tax collection of Rs 14.49 lakh crore, the government has received Rs 10.66 lakh crore, which is 73.5% of the BE target. Both direct and indirect tax collection put together, government expects to meet the annual BE target of revenue collection for the current year without any shortfall.

The government will meet the revenue collection target set in the Budget for the first time in five years. Of the Rs 14.49 lakh crore tax revenue target set for the current fiscal year, Rs 7.97 lakh crore was estimated to come from direct taxes and another Rs 6.47 lakh crore from indirect taxes.

In 2014-15, the government had targeted Rs 13.64 lakh crore in tax revenues but at the end of the year it was revised downwards to Rs 12.51 lakh crore. During the year, direct tax collections were Rs 7.05 lakh crore, short of Rs 7.36 lakh crore target, while Indirect tax revenues were at Rs 5.42 lakh crore , short of the target of Rs 6.24 lakh crore.

The CNX Nifty is currently trading at 7078.20, down by 137.50 points or 1.91% after trading in a range of 7061.80 and 7208.65. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 1.75%, Dr. Reddy’s Lab up by 1.06%, Bank of Baroda up by 0.98%, Bharti Airtel up by 0.71% and Cipla up by 0.51%.

On the flip side, Vedanta down by 5.87%, BHEL down by 4.84%, Hindalco down by 4.26%, ONGC down by 4.07% and Tata Power down by 3.13% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 742.37 points or 3.85% to 18,545.80, KOSPI Index decreased 56.25 points or 2.93% to 1,861.54 and FTSE Bursa Malaysia KLCI decreased 0.26 points or 0.02% to 1,644.15.

On the other hand, Jakarta Composite increased 49.74 points or 1.05% to 4,782.23.

The European markets were trading in red; UK’s FTSE 100 decreased 99.94 points or 1.76% to 5,572.36, Germany’s DAX decreased 175.3 points or 1.94% to 8,841.99 and France’s CAC decreased 92.56 points or 2.28% to 3,968.64.