Weak trade persist on D-Street as India’s factory activity slows to 4-month low

Key Indian benchmarks continued lackluster trade in late morning session, as growth in India’s factory activity slowed to a four-month low in February as new orders eased and weighed on output after manufacturers raised prices at the fastest pace in a year. The Nikkei Manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in February from January’s 52.4.  Investors’ sentiments also remained pessimistic, as the government’s revenue collection under the Goods and Services Tax (GST) has registered a marginal fall in the month of January 2018 (received up to February 25, 2018). According to the latest data released by the government, the total revenue mop-up under GST slipped by 0.44% to Rs 86,318 crore in January 2018 as compared to Rs 86,703 crore in December 2017. Besides, traders took note of Power Secretary A K Bhalla’s statement that India is a power surplus country but electricity does not reach all regions due to network constraints in some states. Further, heavy selling in Bankex, Metal and Capital Goods along with sluggish broader markets, were also contributing to the losses. However, downside remained capped with Moody's Investors Service’s report that India will grow 7.6 per cent in calendar year 2018 and 7.5 per cent in 2019, amid signs of economic recovery from impact of demonetisation and GST. Separately, Finance Minister Arun Jaitley said that India has the potential to beat a growth rate of 7-8 percent and it will continue to remain one of the fastest growing economies in the world.

On the global front, Asian markets were trading in red, following the negative lead overnight from Wall Street after Federal Reserve Chairman Jerome Powell's hawkish comments renewed concerns about US interest rate hikes. Back home, in scrip specific development, Apollo Hospitals Enterprise was trading in green after the company entered into partnership with tech giant Google to roll out a new feature ‘Symptom Search’ to provide better search results to users querying for medical symptoms.

The BSE Sensex is currently trading at 34189.87, down by 156.52 points or 0.46% after trading in a range of 34076.45 and 34214.86. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were IT up by 0.51%, Realty up by 0.50%, Healthcare up by 0.39% and TECK up by 0.33%, while Bankex down by 1.18%, Metal down by 0.83%, Capital Goods down by 0.72%, Basic Materials down by 0.47% and PSU down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.17%, Dr. Reddy’s Lab up by 0.83%, Sun Pharma up by 0.61%, Hero MotoCorp up by 0.52% and Bajaj Auto up by 0.43%. On the flip side, Yes Bank down by 2.54%, ICICI Bank down by 2.38%, Adani Ports & SEZ down by 1.19%, Larsen & Toubro down by 1.09% and Hindustan Unilever down by 1.06% were the top losers.

Meanwhile, the government’s revenue collection under the Goods and Services Tax (GST) has registered a marginal fall in the month of January 2018 (received up to February 25, 2018). According to the latest data released by the government, the total revenue mop-up under GST slipped by 0.44% to Rs 86,318 crore in January 2018 as compared to Rs 86,703 crore in December 2017. The GST collections had increased marginally in December after falling in the two previous months of November and October following the decision of the GST Council to cut rates on more than 200 items.

The government data indicated that 1.03 crore taxpayers have been registered under GST till February 25, of which 17.65 lakh are composition dealers who need to file returns every quarter. Of the total, 1.23 lakh composition dealers have opted out of scheme and have thus become regular taxpayers. Till February 25, there are 16.42 lakh composition dealers which are required to file returns every quarter and the rest of 87.03 lakh taxpayers are required to file monthly returns.

As per the data, so far 57.78 lakh GSTR 3B returns have been filed for the month of January till February 25, 2018. This is 69% of total taxpayers who are required to file monthly returns. Of the Rs 86,318 crore collected under the GST up to February 25, Rs 14,233 crore have been collected as CGST, Rs 19,961 crore as SGST, Rs 43,794 crore as IGST and Rs 8,331 as Compensation cess.

Further, Rs 11,327 crore is being transferred from IGST to CGST account, and Rs 13,479 crore to SGST account by way of settlement of funds on account of cross utilisation of IGST credit for payment of CGST and SGST, respectively or due to inter State B2C transactions. A total amount of Rs 24,806 crore is being transferred from IGST to CGST/SGST account by way of settlement.

The CNX Nifty is currently trading at 10499.75, down by 54.55 points or 0.52% after trading in a range of 10461.55 and 10507.95. There were 15 stocks advancing against 34 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Cipla up by 1.31%, UPL up by 1.23%, Infosys up by 1.11%, Dr. Reddy’s Lab up by 0.72% and Sun Pharma up by 0.63%. On the flip side, HPCL down by 3.44%, ICICI Bank down by 3.15%, Yes Bank down by 2.20%, Larsen & Toubro down by 1.33% and Hindustan Unilever down by 1.32% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 392.14 points or 1.25% to 30,876.52, Nikkei 225 decreased 226.61 points or 1.01% to 22,163.25, Shanghai Composite decreased 24.82 points or 0.75% to 3,267.25, KOSPI Index decreased 24.49 points or 1% to 2,431.65, FTSE Bursa Malaysia KLCI decreased 8.28 points or 0.44% to 1,863.18 and Jakarta Composite decreased 6.34 points or 0.1% to 6,592.59.