Markets make cautious start to the year 2018

Indian equity benchmarks made a cautious start to the year 2018 and are managing to keep their head above water with traders taking some support from report that the government has extended by 10 days the last date for filing of final sales return GSTR-1 till January 10 under the Goods and Services Tax. Businesses with turnover of up to Rs 1.5 crore will have to file GSTR-1 for July-September by January 10, 2018, as against December 31, 2017 earlier. However, market participants remained cautious with fiscal deficit at the end of November breaching the target and touching 112 percent of the budget estimate for 2017-18, mainly due to lower GST collections and higher expenditure. Fiscal deficit was Rs 6.12 lakh crore during April-November 2017-18. Traders will also be concerned with government statement that Indian economy slowed down in 2016-17, with the gross domestic product declining drastically from 8 percent in 2015-16 to 7.1 percent the next year.

On the global front, most of the major Asian equity markets remained closed for trading today. The US markets made a lower closing of the final trading day of the year, but were sharply higher for the year; the decline was mainly due to investors deciding to do some profit taking following the strong upward move seen in 2017.
Back home, Finance Minister Arun Jaitley said the slower economic growth reflected lower growth in the industry and the services sectors, due to a number of factors including structural, external, fiscal and monetary factors. Auto stocks remained in focus today on declaring their monthly sales number for the month of December. In scrip specific developments, L&T surged on its arm bagging EPC contract worth Rs 2,100 crore, while Thyrocare Technologies advanced on launching ‘FocusTB’.

The BSE Sensex is currently trading at 34077.10, up by 20.27 points or 0.06% after trading in a range of 34032.70 and 34101.13. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.50%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Realty up by 1.95%, Healthcare up by 0.99%, Capital Goods up by 0.56%, Industrials up by 0.55% and PSU was up by 0.55%, while Telecom down by 0.29%, TECK down by 0.28%, Metal down by 0.23% and IT was down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.88%, ITC up by 0.99%, Dr. Reddys Lab up by 0.80%, SBI up by 0.69% and Tata Motors up by 0.59%. On the flip side, Hindustan Unilever down by 0.83%, TCS down by 0.81%, ICICI Bank down by 0.61%, Axis Bank down by 0.31% and NTPC down by 0.28% were the top losers.

Meanwhile, breaching the budgeted target for the current fiscal year 2017-18, India’s fiscal deficit, the difference between government expenditure and revenue, stood at Rs 6.12 lakh crore for the period April-November 2017-18; 112% of its Rs 5.46 lakh crore Budget Estimates (BE) target for FY18, mainly due to lower goods and service tax collections, non-tax revenues such as spectrum and transfer of money by the RBI to the government and higher expenditure. Over the same period last year, the fiscal deficit was 85.8% of the BE. This is the highest deviation from the BE for fiscal deficit in the first eight months of a financial year since 2008-09, the year of the global financial crisis.

According to the Controller General of Accounts (CGA) data, the government's revenue receipts were at Rs 8.04 lakh crore in the eight months to November, which work out to 53.1% of the BE of Rs 15.15 lakh crore for 2017-18. The receipts, comprising taxes and other items, were at 57.8% of the target in the year-ago period. In addition, the Goods and Services Tax (GST) collections slipped to their lowest in November as rates were cut on dozens of goods to make the new national sales tax regime more acceptable. Total collections under the GST in November slipped for the second straight month to Rs 80,808 crore, down from over Rs 83,000 crore in the previous month.

The data also showed that the government's total expenditure was Rs 14.78 lakh crore at November-end, or 68.9% of the budget estimate, while it was 65% of the budget estimate a year ago. Capital expenditure during April-November of 2017-18 was higher at 59.5% of the BE compared to 57.7% in the same period of the previous fiscal. Capital spending increased in November to Rs 21,320 crore from Rs 16,406 crore in October. Revenue expenditure, including interest payment, was 70.5% of the BE during April-November 2017-18, as against 66.1% a year earlier.

The CNX Nifty is currently trading at 10531.65, up by 0.95 points or 0.01% after trading in a range of 10516.35 and 10535.50. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.79%, Sun Pharma up by 2.03%, Aurobindo Pharma up by 1.41%, UPL up by 0.96% and ITC up by 0.91%.

On the flip side, Bharti Infratel down by 1.85%, TCS down by 0.93%, Vedanta down by 0.83%, Hindustan Unilever down by 0.83% and Hindalco down by 0.77% were the top losers.