Bourses continue to languish into negative territory with massive losses

The local barometer gauges continued to languish into negative territory with massive losses, on sustained selling pressure by market-participants. Sentiments on the street remained 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. Investors were also worried on the report that India’s fiscal deficit, for nine months of Financial Year 2018, stands at Rs 6,20,949 crore, overshooting the budgeted estimate (BE) target by 113.6%. The government has estimated Rs 5,46,532 crore of fiscal deficit for FY18 which during the same period of the last year stood negative at 93.9%. Down in red with losses of over 1.50%, both Sensex and Nifty were trading below the psychological 35,350 and 10,850 levels, respectively. The broader indices were too trading lower, in line with key benchmarks. Meanwhile, the rupee recovered 11 paise to 63.91 against the US dollar in early trade on increased selling of the American currency by exporters and banks. In scrip specific development, HCL Technologies (HCL) was trading in green after entering into a global reseller agreement with SAP SE.

On the global front, Asian markets were trading mixed, as investors remained cautious ahead of the release of the closely watched US monthly jobs report for January later in the day. Back home, the BSE Sensex is currently trading at 35322.83, down by 583.83 points or 1.63% after trading in a range of 35314.97 and 35738.13. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.73%, while Small cap index was down by 3.32%.

The top losing sectoral indices on the BSE were Realty down by 4.16%, Power down by 2.89%, Utilities down by 2.72%, Industrials down by 2.71% and Capital Goods down by 2.56%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were TCS up by 0.83%, ITC up by 0.42%, Sun Pharma up by 0.40% and Dr. Reddy’s Lab up by 0.12%. On the flip side, HDFC down by 3.22%, Maruti Suzuki down by 2.97%, ICICI Bank down by 2.78%, Tata Motors - DVR down by 2.73% and Kotak Mahindra Bank down by 2.53% 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 10848.05, down by 168.85 points or 1.53% after trading in a range of 10826.50 and 10954.95. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 0.92%, Tech Mahindra up by 0.92%, TCS up by 0.90%, HCL Tech. up by 0.86% and Sun Pharma up by 0.67%. On the flip side, Bajaj Finance down by 4.19%, HDFC down by 3.18%, Maruti Suzuki down by 3.03%, ICICI Bank down by 2.87% and Kotak Mahindra Bank down by 2.85% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 0.56 points or 0.03% to 1,869.14, Shanghai Composite was up by 11.14 points or 0.32% to 3,458.12, Jakarta Composite added 42.71 points or 0.65% to 6,641.17 and Hang Seng rose 98.41 points or 0.3% to 32,740.50. On the flip side, Nikkei 225 decreased 211.58 points or 0.9% to 23,274.53, KOSPI Index was down by 43.15 points or 1.68% to 2,525.39 and Taiwan Weighted shed 34.02 points or 0.3% to 11,126.23.