Bears back in action after a day of break; Sensex loses over 350 points

Profit-booking, coupled with doubts over the central government's ability to push through key economic legislations during the upcoming parliament session, dragged the Indian equity markets lower and deposed over one and half percentage point on Tuesday. Sentiments remained subdued with the report that India’s merchandise exports fell for the 14th consecutive month with shipments in January, 2016 contracting 13.6 percent year-on-year to $21 billion due to a steep fall in shipment of petroleum products and engineering goods amid tepid global demand. Imports also fell during the month by 11 per cent to $28.7 billion that resulted in the trade deficit narrowing to an 11-month low of $7.6 billion. Besides, a weakness in rupee against the dollar also influenced the sentiment. Indian rupee was trading lower by 33 paise at 68.39 against the American currency at the time of equity markets closing as the dollar firmed up overseas. Market participants remained concerned with the report that foreign Institutional Investors (FIIs) continued their selling spree as they sold net Rs 1,311.59 crore on February 15, 2015. FIIs have been net sellers of Indian equities in 27 of 30 sessions this year, and have offloaded $2.14 billion worth of shares since the beginning of the year until Friday.

On the global front, Asian markets ended mostly in green on Tuesday as a combination of stabilising Chinese markets, rebounding oil prices and solid US consumption data prompted investors to look for bargains after last week's rout. European stocks too rose on Tuesday as the global rally gathered momentum on rebounding oil prices. US crude jumped as much as $1.26 per barrel or 4.3 percent, to $30.70 on reports that Saudi Arabia and Russia, the world's two biggest oil producers, will meet Tuesday in Doha, Qatar. 

Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices dropped into the red terrain soon, lacking any significant upside cues. The key gauges traded on a lackluster note for most part of the morning trades. The selling pressure accentuated in the mid afternoon as investors took to across the board risk aversion. The indices barely managed to show signs of stabilizing in the second half of the session as the downward drift halted only with the session’s close after suffering gargantuan losses. Eventually the NSE’s 50-share broadly followed index Nifty, took a cut of over one and half a percent to settle below the crucial 7,050 support level, while Bombay Stock Exchange’s Sensitive Index Sensex slipped by over three fifty points and closed below the psychological 23,200 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with large cuts of over two percent. On the BSE sectoral front, the Capital Goods pocket bore the maximum brunt of selling as it got thrashed by over three percent, followed by the rate sensitive Realty index, which too went home with hefty losses of over three percent, while counters like Oil & Gas, PSU and Banking too suffered severe pounding. The market breadth remained pessimistic as there were 614 shares on the gaining side against 2007 shares on the losing side while 104 shares remained unchanged.

Finally, the BSE Sensex declined by 362.15 points or 1.54% to 23191.97, while the CNX Nifty dropped 114.70 points or 1.60% to 7,048.25. 

The BSE Sensex touched a high and a low 23692.08 and 23164.54, respectively. The broader indices made a negative closing; the BSE Mid cap index ended down by 2.43%, while Small cap index ended down by 2.25%

The top losing sectoral indices on the BSE were Capital Goods down by 3.06%, Realty down by 3.03%, Oil & Gas down by 2.32%, PSU down by 2.23%, Bankex down by 2.11%, while there were no gainers in BSE sectoral space.

The top gainers on the Sensex were Adani Ports & SEZ up by 4.78%, NTPC up by 2.12%, Dr. Reddys Lab up by 0.16% and Wipro up by 0.13%. On the flip side, SBI down by 6.49%, Tata Motors down by 4.88%, BHEL down by 4.35%, GAIL India down by 3.76% and Larsen & Toubro down by 3.59% were the top losers.

Meanwhile, the government has collected non-tax receipts over Rs 2 lakh crore in the current fiscal. The biggest share flows from dividends paid by PSUs and the RBI. The other major items of non-tax receipts are interest receipts, spectrum charges, royalty, licence fee, sale of forms and RTI application fee. The receipts are about 90% of the FY16 non-tax revenue estimate of Rs 2.21 lakh crore.

For the financial year 2015-16 Rs 1,00,651 crore has been budgeted from dividends. Of this Rs 36,174 crore is estimated to come from CPSEs and Rs 64,477 crore from banks, financial institutions and RBI. The RBI has already paid a dividend of Rs 65,896 crore in FY16, 25% more than the amount in the year ago period.

Besides, Finance Minister Arun Jaitley has launched a Non-Tax Receipt Portal (NTRP) developed by Controller General of Accounts (CGA) which provides a one-stop platform to citizens or corporates or other users to make online payment of non-tax receipts to Government of India. As taxes are largely collected using the e-payment mode, non tax revenues flow mainly through physical instruments such as bank draft or cheque or cash. The online electronic payment will help common users/citizens from the hassle of visiting bank premises for issue of drafts, and later to Government offices to deposit the instrument for availing services. The online payments can be made by using either a credit card, a debit card or through net banking.

Recently the government has said it would meet the tax revenue target of Rs 14.49 lakh crore for the current fiscal as a small shortfall in direct tax revenue would be offset by the indirect tax collections. It expects Rs 40,000 crore extra mop up from indirect taxes to make up for the shortfall in direct levies.

The CNX Nifty touched a high and low 7,204.65 and 7,037.70 respectively. 

The top gainers on Nifty were Adani Ports &Special up by 4.84%, NTPC up by 2.24%, Hero MotoCorp up by 0.46%, Power Grid up by 0.43% and IndusInd Bank up by 0.39%. On the flip side, SBI down by 6.85%, Zee Entertainment down by 5.97%, Bank of Baroda down by 5.96%, PNB down by 5.16% and Vedanta down by 5.13% were the top losers.

European markets were trading in green; Germany’s DAX increased 3.51 points or 0.04% to 9,210.35, France’s CAC gained 26.83 points or 0.65% to 4,142.08 and UK’s FTSE 100 was up by 33.5 points or 0.58% to 5,857.78.

Asian markets ended higher on Tuesday as a combination of stabilizing Chinese markets, rebounding oil prices and solid US consumption data prompted investors to look for bargains after last week's rout. Chinese shares ended higher, helped by a surge in China’s bank lending to a record high and comments from China's premier, who hinted of fresh stimulus if the economy slowed further. China's bank lending surged to a record 2.51 trillion yuan ($385 billion) in January from 597.8 billion yuan recorded in December amid soaring demand for mortgages. Hong Kong shares extended gains, led by energy stocks as sentiment improved on the back of higher oil prices and rebounding European and Chinese equities. Japanese stocks rose slightly in choppy trade as weaker yen and firmer oil prices.