Lackluster trade continues on Dalal Street; Sensex loses over 500 points

Key Indian benchmarks continued their lackluster trade in late morning session, with the Sensex and the Nifty falling more than 500 and 150 points, respectively. Heavy selling in Realty, Consumer Durables and Basic Materials along with weak trend in other Asian markets, kept the markets under pressure. Traders’ sentiments were pessimistic with Finance Minister Arun Jaitley’s proposal to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares. Furthermore, the broader markets were also following the sluggish larger peers, with the losses of more than 3 per cent each. Traders also failed to get any relief with Finance Minister Arun Jaitley’s statemnet that India's $2.5 trillion economy is now firmly on course to register a strong growth rate of over 8 percent and 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.

On the global front, Asian markets were trading mostly in red, reflecting weakness in technology stocks and on worries about rising US bond yields. Investors also turned cautious ahead of the release of the closely watched U.S. monthly jobs report for January later in the day. Meanwhile, higher commodity prices lifted resources stocks. Back home, in scrip specific development, Eicher Motors traded higher after the company’s motorcycle division reported 31% rise in sales at 77,878 units in January 2018 as compared to 59,676 motorcycles sold in January 2017.

The BSE Sensex is currently trading at 35368.36, down by 538.30 points or 1.50% after trading in a range of 35314.97 and 35738.13. There were 3 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 3.01%, while Small cap index was down by 3.87%.

The top losing sectoral indices on the BSE were Realty down by 5.12%, Consumer Durables down by 4.54%, Basic Materials down by 3.01%, Power down by 2.96% and Consumer Disc down by 2.83%, while there were no gaining sectoral indices on the BSE.

The few gainers on the Sensex were TCS up by 1.24%, ITC up by 0.67% and Dr. Reddy’s Lab up by 0.33%. On the flip side, Yes Bank down by 3.51%, ONGC down by 3.13%, HDFC down by 2.98%, Maruti Suzuki down by 2.89% and Tata Steel down by 2.86% were the top losers.

Meanwhile, the Telecom minister Manoj Sinha has said that India's telecom sector is likely to generate as many as 4 lakh new jobs and contribute significantly to the country’s Gross Domestic Product (GDP) growth in the next 5 years, as the Union Budget for 2018-19 seeks to enhance telecom infrastructure in the country. He noted that the government has allocated Rs 10,000 crore for expansion of telecom infrastructure under various projects in the country, including laying of 4 lakh kilometres of optical fibre cable (OFC) network to connect 1.5 lakh gram panchayats by March 2019, scaling up wifi networks and connectivity in north- eastern states and laying undersea cable for connecting Andaman and Nicobar Islands (ANI) and Lakshadweep Islands etc.

The minister has stated that the task of connecting one lakh gram panchayats with high speed optic fibre network has been completed under Phase 1 of Bharat Net program. He also said that under phase 2, targeted to be completed by March 2019, the government aims to connect remaining 1.5 lakh GPs with OFC based broadband network. Besides, he said that the budget allocation will be used for setting up 5 lakh wifi hotspots in rural area. He believes that installation of 5 lakh hotspots will increase wifi hotspots by 15 folds in the country. He added that at present, there are 38,000 public wifi hotspots.

Sinha has stated that enhance connectivity will help Department of Posts (DoP) to expedite direct benefit transfer scheme being handled by it and enhance role of India Post Payments Banks, which will be launched in March-April. He also pointed out that DoP plans to increase passport seva kendra from 60 to 251 in this calendar year. He said that provision for installing electronic system at tolls will enhance roll of telecom ministry and Make in India programme. Adding further, he highlighted that India has emerged as one of very strong telecom market with 1,186 million phone connections out of which 1,163 million are mobile phones, tele-density has reached around 91 percent and internet user base increased from 422.81 million at the end of march and to 429.23 million in September.

The CNX Nifty is currently trading at 10852.00, down by 164.90 points or 1.50% after trading in a range of 10826.50 and 10954.95. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.16%, Eicher Motors up by 0.93%, HCL Tech. up by 0.92%, Tech Mahindra up by 0.71% and ITC up by 0.69%. On the flip side, Bajaj Finance down by 5.14%, Yes Bank down by 3.50%, Indiabulls Housing Finance down by 3.44%, HDFC down by 3.24% and UPL down by 3.12% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 193.25 points or 0.82% to 23,292.86, KOSPI Index decreased 41.98 points or 1.63% to 2,526.56, Taiwan Weighted decreased 34.02 points or 0.3% to 11,126.23 and Shanghai Composite decreased 12.24 points or 0.36% to 3,434.74.

On the flip side, FTSE Bursa Malaysia KLCI increased 1.42 points or 0.08% to 1,870.00, Hang Seng increased 19.6 points or 0.06% to 32,661.69 and Jakarta Composite increased 42.71 points or 0.65% to 6,641.17.