Indian equity benchmarks extended their losses in morning session on account of selling in frontline counters. The rupee opened up against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net buyers in domestic equity markets on Tuesday and bought shares worth Rs 174 crore with gross purchases and gross sales of Rs 5,485.70 crore and Rs 5,311.44 crore, respectively. Traders remained on sidelines ahead of long Diwali weekend, as the markets will be closed on Thursday and Friday for Diwali, with Thursday just having one hour of Muhurat trading. Investors took note of a private report that about 49% Indians are likely to spend less this Diwali compared to last year due to demonetization and impact of GST, with expenditure on clothes and sweets to be the highest. Though 21% will be spending more over last year, 18% will spend same as the last year while 21% respondents said they were undecided.
Separately, almost three months after roll out of new indirect tax regime, Revenue Secretary Hasmukh Adhia has said that the Goods and Services Tax (GST) compliance is still low. He added that a clear trend about revenue collections is likely to emerge only after three-four months, once integrated GST (IGST) is converted into Central GST and State GST, as GST revenue includes IGST revenue. He also said that compliance will fall further if penalty for late filing of returns is dropped. The downside was capped after Surjit Bhalla, a member of the Prime Minister’s Economic Advisory Council said that the government is likely to stick to its fiscal deficit target of 3.2% of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalize banks.
Traders were seen piling up position in Energy, Oil & Gas and Utilities stock, while selling was witnessed in Telecom, Bankex and TECK sector stocks. In scrip specific development, Axis Bank was trading in red as the bank’s corporate lending continued to suffer with rising bad loans, and its retail segment profitability was dented with a fall in pre-tax profit. The lender’s September quarter earnings rose 38%, boosted by a low base in the previous year and a jump in treasury profits. Wipro was trading in green after the IT major on Tuesday reported a 5.5% rise in sequential and 6% rise in year-on-year (Y-o-Y) rise in net profit at Rs 2,189.50 crore ($349 million) for the September quarter. The company has given guidance of $2,014 million to $2,054 million for December quarter revenue from its IT services business. Non-banking finance company MAS Financial Services was trading firm after debuting on exchanges. The issue price is fixed at higher end of price band of Rs 456-459 per share. The Rs 460-crore initial share sale offer had received overwhelming response from investors as it was oversubscribed 128.39 times.
On the global front, Asian markets were trading mostly in red. Chinese President Xi Jinping said that the country will relax market access for foreign investment and expand access to its services sector. Xi also said China will deepen market-oriented reform of its exchange rate as well as its financial system, while at the same time strengthening the role of state firms in the economy. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,500 and 10,200 levels respectively. The market breadth on BSE was positive in the ratio of 1100:1043, while 92 scrips remained unchanged.
The BSE Sensex is currently trading at 32490.55, down by 118.61 points or 0.36% after trading in a range of 32464.40 and 32557.40. There were 10 stocks advancing against 21 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index was up by 0.01%, while Small cap index was up by 0.11%.
The top gaining sectoral indices on the BSE were Energy up by 1.07%, Oil & Gas up by 0.76%, Utilities up by 0.54%, Power up by 0.41% and Capital Goods up by 0.10%, while Telecom down by 1.57%, Bankex down by 1.56%, TECK down by 0.60%, Healthcare down by 0.51% and Consumer Durables down by 0.44% were the top losing indices on BSE.
The top gainers on the Sensex were Reliance Industries up by 1.77%, Power Grid up by 1.56%, Wipro up by 1.54%, ONGC up by 1.52% and Kotak Mahindra Bank up by 1.49%.
On the flip side, Axis Bank down by 7.14%, ICICI Bank down by 3.80%, Cipla down by 2.10%, SBI down by 1.97% and Tata Motors - DVR down by 1.61% were the top losers.
Meanwhile, amid the talks of fiscal stimulus from the government, a member of the Prime Minister’s Economic Advisory Council (EAC) Surjit Bhalla has indicated that government will likely stick to deficit target. He said the government had stuck to its fiscal deficit targets over the past three years and is expected to do so this year as well.
Bhalla said the Council's views on the fiscal deficit has been communicated to the government by its chairman Bibek Debroy, adding that the government is likely to stick to its fiscal deficit target of 3.2 per cent of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalise banks.
He further said that GDP growth could be close to 6.5 percent for the fiscal year, although that is lower than the government’s earlier estimate of about 7.3 percent. Growth slipped to its lowest level in three years in the first quarter, logging an annual rate of 5.7 percent.
Recently, President of the Federation of Indian Chambers of Commerce and Industry Pankaj Patel has called on the Reserve Bank of India (RBI) to reduce the price of money for Indian business by easing the fiscal deficit and inflation targets and allowing the rupee to depreciate against major currencies.
The CNX Nifty is currently trading at 10192.60, down by 41.85 points or 0.41% after trading in a range of 10184.35 and 10211.85. There were 16 stocks advancing against 34 stocks declining on the index.
The top gainers on Nifty were Reliance Industries up by 1.97%, Power Grid up by 1.61%, ONGC up by 1.52%, Kotak Mahindra Bank up by 1.51% and Wipro up by 1.26%.
On the flip side, Axis Bank down by 7.19%, ICICI Bank down by 3.80%, Bharti Infratel down by 3.03%, Zee Entertainment down by 2.55% and Yes Bank down by 2.32% were the top losers.
The Asian markets were trading mostly in red; Jakarta Composite decreased 20.01 points or 0.34% to 5,927.32, Hang Seng decreased 18.4 points or 0.06% to 28,679.09, Nikkei 225 decreased 4.51 points or 0.02% to 21,331.61 and KOSPI Index decreased 2.41 points or 0.1% to 2,481.96.
On the other hand, Taiwan Weighted increased 1.11 points or 0.01% to 10,724.26 and Shanghai Composite increased 9.3 points or 0.28% to 3,381.34.
The markets in Malaysia and Singapore will be closed for Deepavali.
