Benchmarks extend losses in morning session

Indian equity benchmarks extended their losses in morning session on account of selling in front line blue chip counters. The market took a beating on back of several announcements made yesterday in his speech made by Finance Minister Arun Jaitley during Union Budget 2018. The Finance Minister’s proposal to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares spooked investors. The market is also worried about the fiscal slippage issue, largely because of the degree of deviation as well. This fiscal deficit will put pressure on government borrowing. Besides, the imposition of a fresh tax on income from Mutual Funds could also have spooked investors. Separately, a report enlightened that India reported a fiscal deficit of $97.27 billion for April-December or 113.6% of the budgeted target for the current fiscal year that ends in March. Net tax receipts in the first nine months of 2017/18 fiscal year were Rs 9 trillion.

Traders were seen piling up position in IT stocks, while selling was witnessed in Consumer Durables, Realty and Basic Materials sector stocks. In scrip specific development, Lupin was trading in green on receiving final approval for its Clobetasol Propionate Cream USP, 0.05% from the United States Food and Drug Administration (USFDA) to market a generic version of Fougera Pharmaceuticals Inc.’s Temovate Cream, 0.05%. Clobetasol Propionate Cream USP, 0.05% had annual sales of around $135 million in the US. (IQVIA, erstwhile IMS, MAT October 2017).

On the global front, the Asian markets were trading mostly in red. China’s manufacturing sector sustained growth at multi-month highs in January, as factories continued to raise output to meet new orders, suggesting resilience in the world’s second-largest economy. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 35,400 and 10,900 levels respectively. The market breadth on BSE was negative in the ratio of 199:2295, while 72 scrips remained unchanged.

The BSE Sensex is currently trading at 35380.91, down by 525.75 points or 1.46% after trading in a range of 35314.97 and 35738.13. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 3.62%, while Small cap index was down by 4.88%.

The only gaining sectoral index on the BSE was IT up by 0.27%, while Consumer Durables down by 6.60%, Realty down by 6.46%, Basic Materials down by 3.53%, Power down by 3.47% and Consumer Disc down by 3.41% were the top losing indices on BSE.

The only gainers on the Sensex were TCS up by 1.21% and Infosys up by 0.90%.

On the flip side, Yes Bank down by 4.33%, Kotak Mahindra Bank down by 3.66%, Adani Ports & Special Economic Zone down by 3.06%, ONGC down by 2.72% and SBI down by 2.68% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has asserted that India's $2.5 trillion economy is now firmly on course to register a strong growth rate of over 8 percent. It indicated that the country has grown on an average of 7.5 percent in the first three years of the Modi government. Therefore, he expects that the country will grow at 7.2 to 7.5 percent in the second half of the current fiscal, ending March 31. Besides, it pointed out that the Gross Domestic Product (GDP) growth of 6.3 percent in Q2 (July-September) of FY18 signalled turnaround of the economy.

Talking about manufacturing sector, the minister stated that it is back on good growth path and the services, mainstay of India's growth, have also resumed their high growth rates of 8 percent plus. Also, he expressed hopes that exports to grow at 15 percent in 2017-18. Adding further, he said that India has already become 7th largest economy of the world and is expected to become 5th largest economy very soon. On Purchasing Power Parity (PPP) basis, he noted that the country is already the third largest economy.

According to the estimates of Central Statistics Office (CSO), Indian economy is expected to grow at 6.5 percent in the current fiscal. As per the Economic Survey tabled in Parliament, the economy is likely to grow at 7-7.5 percent in 2018-19. GDP growth in first quarter of 2017-18 had moderated to 5.7 percent, the lowest in the three years, before recovering to 6.3 percent in the following three months.

The CNX Nifty is currently trading at 10857.05, down by 159.85 points or 1.45% after trading in a range of 10826.50 and 10954.95. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.55%, HCL Tech up by 1.46%, Infosys up by 0.85%, Eicher Motors up by 0.67% and Aurobindo Pharma up by 0.29%.

On the flip side, Bajaj Finance down by 5.69%, Indiabulls Housing Finance down by 4.94%, Yes Bank down by 4.40%, UPL down by 3.89% and Kotak Mahindra Bank down by 3.35% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 162.46 points or 0.69% to 23,323.65, KOSPI Index decreased 42 points or 1.64% to 2,526.54, Taiwan Weighted decreased 18.41 points or 0.16% to 11,141.84 and Shanghai Composite decreased 15.81 points or 0.46% to 3,431.17.

On the other hand, FTSE Bursa Malaysia KLCI increased 1.42 points or 0.08% to 1,870.00, Hang Seng increased 3.79 points or 0.01% to 32,645.88 and Jakarta Composite increased 42.71 points or 0.65% to 6,641.17.