Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in early afternoon session, as selling continued in Auto, Metal, PSU and Consumer Disc stocks. Domestic sentiment remained dampened with the report that the overall trade deficit widened to $16298.47 million during the month under review as against $9904.82 million in January 2017, the highest in more than three years. Broader indices too were reeling under pressure. However, the market losses remained capped with the International Monetary Fund (IMF) director of Communications Department Gerry Rice’s statement that the tax collection assumptions in India’s budget is ambitious as the budget for 2018-19 assumes the tax revenue to increase faster than the value of transactions in the economy. Separately, Union minister D V Sadananda Gowda has said that the government will change the base year to 2017-18 for the calculation of GDP and IIP numbers while for retail inflation the year will be revised to 2018. In scrip specific development, Indoco Remedies was up by over two percent on receiving EU GMP Certification from Regulatory Authority of Hungary for its manufacturing facility for Non - Sterile products (Goa - Plant III), located at L-32, 33, 34 Verna Industrial Estate, Goa.

 The BSE Sensex is currently trading at 34194.29, down by 103.18 points or 0.30% after trading in a range of 34127.11 and 34508.24. There were 8 stocks advancing against 22 stocks declining on the index, while 1 stock remained unchanged.

 Back home, the broader indices were trading in red; the BSE Mid cap index was down by 0.73%, while Small cap index was down by 0.81%.

The only gaining sectoral indices on the BSE were IT up by 0.63% and TECK up by 0.45%, while Auto down by 1.22%, Metal down by 0.99%, PSU down by 0.92%, Consumer Disc down by 0.85% and Basic Materials down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.83%, Dr. Reddy’s Lab up by 1.47%, TCS up by 1.19%, Infosys up by 0.94% and Wipro up by 0.62%. On the flip side, Yes Bank down by 2.81%, ICICI Bank down by 1.67%, SBI down by 1.65%, Maruti Suzuki down by 1.45% and Tata Motors down by 1.18% were the top losers.

Meanwhile, terming tax collection assumptions in India’s budget as ambitious, the International Monetary Fund (IMF) director of Communications Department Gerry Rice has said that the budget for 2018-19 assumes the tax revenue to increase faster than the value of transactions in the economy. He added that the budget aims for a deficit that is smaller than the deficit that was expected in 2017-18.

IMF director of Communications Department has pointed out that the budget also assumes the government will be able to collect higher tax revenue from the same amount of consumption and income. But, he said there is a need to look into the fiscal implications of some of the initiatives that are presently unfunded.

Citing some of the implementations relating to the goods and services tax (GST) in 2017, Rice said if these issues persist, tax revenue collection could fall short on the budget. Referring to some of the social welfare programmes announced by finance minister Arun Jaitley, he said that in the budget, there are also some initiatives that are presently unfunded and fiscal implications of these need to look at a little bit more closely as more details become available.

Gerry Rice further said that the IMF is also looking at some of the potential slippages on the revenue side or higher outlays on new policy initiatives because they could result in cost to capital expenditures, which the world body feels is important to support a medium-term growth.

The CNX Nifty is currently trading at 10512.10, down by 33.40 points or 0.32% after trading in a range of 10493.50 and 10612.90. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 1.93%, Kotak Mahindra Bank up by 1.68%, Dr. Reddy’s Lab up by 1.42%, TCS up by 1.19% and Infosys up by 1.12%. On the flip side, Yes Bank down by 2.78%, Eicher Motors down by 2.44%, Vedanta down by 1.71%, SBI down by 1.69% and ICICI Bank down by 1.69% were the top losers.

Most of the Asian markets were closed on account of Lunar New Year holiday. Nikkei 225 was up by 255.27 points or 1.19% to 21,720.25.