Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day and ended the session with cut of around seven tenth of a percent. The equity benchmarks made a soft start and traded in red in early deals weighed by geopolitical tensions surrounding North Korea after its latest hydrogen bomb test. Sentiments also weakened taking cues from foreign brokerage report that investment continued to slip to 27.5 percent of GDP, from 29.2 percent in June 2016, with high lending rates dampening demand and sustaining excess capacity. It added that lending rate cuts are key to economic growth recovery and banks should lower rates by 25 bps before the start of the busy season in October to accelerate reforms momentum. Separately, another global brokerage firm lowered India’s GDP growth forecast to 6.6 percent for this fiscal from 7.2 percent earlier. The brokerage firm said that the growth is expected to pick up in coming quarters as the economy normalizes post implementation of the GST. According to official data, India’s economic growth slipped to a three-year low of 5.7 percent in April-June as disruptions caused by demonetization spilled over to the third straight quarter amid a slowdown in manufacturing activities.

Investors took note of the report that the country’s former central bank head Raghuram Rajan had cautioned the government that short-term costs of a radical ban of high-value currency notes would outweigh the long-term benefits. Separately, India’s total public debt (excluding liabilities under the public account) increased by 3.6 percent to Rs 63.35 lakh crore at the end of June 2017. The debt of the government was Rs 61.13 lakh crore at the end of March 2017. According to the report on debt management released by the finance ministry, this indicated a quarter-on-quarter rise of 3.6 percent in Q1 FY18 as compared to a decline of 1.15 percent in the previous quarter (Q4 FY17). Internal debt constituted 93 percent of public debt as of June 2017, while marketable securities accounted for 83.2 percent. 

On the global front, Asian markets closed mostly in red, after a weekend nuclear weapons test by North Korea that Pyongyang claimed was a hydrogen bomb capable of fitting onto an ICBM. After surprising pretty much everyone with solid growth in the first half, China’s economy has continued to motor along nicely with a flurry of data for August expected to show momentum will largely hold up through to the end of the year despite tighter policy. The European markets were trading in red amid fresh concerns over geopolitical tensions in the region. Euro zone producer prices grew more slowly in July than expected by markets.

The BSE Sensex ended at 31680.41, down by 211.82 points or 0.66% after trading in a range of 31560.32 and 31932.20. There were 5 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.73%, while Small cap index was down by 0.67%. (Provisional)

The only gaining sectoral indices on the BSE was Metal up by 0.21%, while Telecom down by 1.70%, Realty down by 1.39%, TECK down by 1.08%, IT down by 1.08% and Industrials down by 1.03% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 3.13%, Sun Pharma up by 2.89%, ONGC up by 0.94%, Reliance Industries up by 0.35% and Wipro up by 0.17%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 2.75%, Infosys down by 2.09%, Bharti Airtel down by 2.05%, Kotak Mahindra Bank down by 1.97% and Tata Motors - DVR down by 1.91% were the top losers. (Provisional)

Meanwhile, in order to minimise human interface, the Income Tax (I-T) Department will focus more on e-assessment which will also lead to complete transparency, by ensuring work to be completed online. Besides, the Central Board of Direct Taxes (CBDT) which is a part of Department of Revenue in the Ministry of Finance, aims to add a sizeable number of new taxpayers in the current fiscal. It aims to achieve the twin objectives of substantially reducing the number of appeals and the disputed demand before CIT (appeals).

Prime Minister Narendra Modi, to track undeclared wealth and fix clear targets for improving tax administration by 2022, also asked tax officials to use data analytics. PM asked taxmen to clear pendency of cases and create an environment that instills confidence among honest taxpayers and uproots corruption.

Revenue Secretary Hasmukh Adhia too expressed need of coordination between both the CBDT and Central Board of Excise and Customs (CBEC), further stressing that genuine grievances of taxpayers should be disposed off on priority and taxpayers should be treated with courtesy. He underlined the importance of increasing efforts to garner revenue in light of the data that is available post demonetisation.

The CNX Nifty ended at 9903.45, down by 70.95 points or 0.71% after trading in a range of 9861.00 and 9988.40. There were 11 stocks advancing against 40 stocks declining on the index. (Provisional)

The top gainers on Nifty were Coal India up by 3.18%, Sun Pharma up by 2.89%, Bosch up by 1.41%, ONGC up by 0.91% and Indiabulls Housing up by 0.62%. (Provisional)

On the flip side, Indian Oil down by 4.42%, Adani Ports & Special Economic Zone down by 2.72%, ACC down by 2.51%, Tata Motors - DVR down by 2.25% and Infosys down by 2.09% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 11.8 points or 0.16% to 7,426.70, Germany’s DAX decreased 63.51 points or 0.52% to 12,079.13 and France’s CAC decreased 22.1 points or 0.43% to 5,101.16.

The Asian equity markets ended mostly in red on Monday, as geopolitical tensions flared up again, with U.S. president Donald Trump weighing new economic sanctions that could target China after a nuclear test Sunday by North Korea. The White House warned any nation doing business with Kim Jong Un’s regime would be met with economic sanctions and trade embargoes. The Japanese market was one of the biggest losers amid broad-based selling, down by around a percent as the yen strengthened against dollar on renewed geopolitical tensions and after the release of disappointing U.S. jobs report. Straits Times too sagged upon return from a long Hari Raya weekend, in the wake of Pyongyang's surprise nuclear test. The Chinese market though managed to make a modestly positive close ahead of key economic data later this week, as optimism about the economy helped investors shrug off heightened geopolitical tensions.