Indian equities remain in red terrain

Following weak Asian markets, Indian equity benchmarks continued their trade in red territory in early afternoon session, as investors remained on sidelines ahead of domestic economic data including December quarter gross domestic product (GDP) and fiscal deficit, to be released later in the day. Domestic sentiment remained downbeat with report that 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. Adding some anxiety among investors, the collection of Goods and Services Tax (GST) slipped marginally to Rs 86,318 crore in January 2018 (received in January/February up to February 25, 2018), from Rs 86,703 crore in December 2017. Moreover, continuous selling in Banking, Metal, PSU and Capital Goods stocks coupled with weakening rupee against the US dollar, also kept the sentiments under pressure. In scrip specific development, Granules India was up by around a percent on receiving EIR from USFDA for its Chantilly facility.

On the global front, Asian markets were trading in red, as weak Chinese and Japanese manufacturing data revived worries about global growth amid anxiety over faster rate rises in the United States. Back home, the BSE Sensex is currently trading at 34191.15, down by 155.24 points or 0.45% 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 0.33%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were IT up by 0.61%, TECK up by 0.39%, Realty up by 0.22%, Healthcare up by 0.22% and Auto up by 0.00%, while Bankex down by 1.18%, Metal down by 0.99%, PSU down by 0.67%, Capital Goods down by 0.61% and Power down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.57%, Dr. Reddy’s Lab up by 0.82%, Hero MotoCorp up by 0.39%, ONGC up by 0.35% and Maruti Suzuki up by 0.26%. On the flip side, ICICI Bank down by 2.08%, Yes Bank down by 2.00%, Adani Ports & SEZ down by 1.51%, Axis Bank down by 1.36% and Hindustan Unilever down by 1.11% were the top losers.

Meanwhile, the finance ministry has given its nod to the much-awaited policy for scrapping vehicles that are older than 15-years. The document will now go to the Goods and Services Tax (GST) Council for fixing concessions by the states and the Centre. The development comes after Road, Transport and Highways Minister Nitin Gadkari has affirmed that the aim of bringing this policy is to curb the menace of rising vehicular pollution in India. He also said that the policy was needed to curb vehicular pollution as well as given the annual 22 percent growth rate of the automobile industry that will require an additional highway lane every third year, costing Rs 800 billion.

Gadkari has said that India has the potential to become a global hub for automobile industry once this proposal is implemented because the prices will become cheaper as scrap collected from these vehicles will be used for the production of auto parts among other things. Earlier, he had sent a concept note on Voluntary Vehicle Fleet Modernisation Programme (V-VMP) to the Committee of Secretaries. This note talked about the creation of an ecosystem, wherein, voluntary scrapping and replacement of old polluting vehicles was proposed. The policy has proposed to push 28 million decade-old vehicles off the road.

The transport minister had earlier said that the Prime Minister is very keen on the proposal and once it is implemented, pollution would be checked considerably as 65 percent of the pollution is caused by heavy vehicles more than 15 years old. As per an earlier proposal, a relief of about Rs 0.5 million was to be provided to people who purchase new commercial vehicle of about Rs 1.5 million, if they surrender their over 15-year old commercial vehicles. Gadkari has said that once the proposal is accepted it is bound to result in Rs 100 billion boost in tax revenue as the automobile sector will benefit from it.

The CNX Nifty is currently trading at 10496.70, down by 57.60 points or 0.55% after trading in a range of 10461.55 and 10507.95. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.40%, UPL up by 1.05%, Cipla up by 0.90%, Dr. Reddy’s Lab up by 0.89% and GAIL India up by 0.61%. On the flip side, HPCL down by 3.38%, ICICI Bank down by 2.86%, Yes Bank down by 2.19%, Axis Bank down by 1.76% and Vedanta down by 1.75% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 384.05 points or 1.23% to 30,884.61, Nikkei 225 shed 321.62 points or 1.44% to 22,068.24, KOSPI Index was down by 28.78 points or 1.17% to 2,427.36, Shanghai Composite dropped 27.01 points or 0.82% to 3,265.06, FTSE Bursa Malaysia KLCI decreased 8.28 points or 0.44% to 1,863.18 and Jakarta Composite dipped 6.34 points or 0.1% to 6,592.59.