Post Session: Quick Review

Indian equity benchmarks traded on volatile note throughout the day and ended in red with Nifty losing 100 points and Sensex losing 250 points. Bears tightened grip on Dalal Street as weak global and domestic cues kept investors on the back foot. Also, the backdrop of political turmoil weighed on the markets with Nifty breaching 10,100 levels for the first time since December 7, 2017. The Lok Sabha proceedings were disrupted today for the 11th day today as the TDP, YSR Congress, TRS and AIADMK continued their noisy protests over various issues, including the banking scam and special status for Andhra Pradesh. Indian equity benchmarks traded slightly in red as the sentiments were under pressure after the Reserve Bank of India’s (RBI) latest data showed that India’s current account deficit (CAD), which is the difference between foreign exchange spent and earned, widened sharply to $13.5 billion or 2% of Gross Domestic Product (GDP) in the October-December quarter (Q3) of fiscal year 2017-18, from $8.0 billion (1.4% of GDP) in the corresponding quarter of the previous year and $7.2 billion (1.1% of GDP) in the preceding quarter.

Meanwhile, investors took note that holding companies of many Indian business houses, corporates investing in subsidiaries and associates, as well as several large individual investors will have to cough up more tax after a Supreme Court ruling last week. The verdict will prevent many companies and investors from treating their entire outgo of interest on borrowings as ‘expenditure’. Separately, with only 16% of the summary sales returns under GST matching with the final returns, the revenue department has started to analyze major gaps with a view to check any possible tax evasion. According to the GST returns data, 34% of businesses paid Rs 34,400 crore less tax between July-December while filing initial summary return (GSTR-3B). The street shrugged off Central Board of Excise and Customs’ (CBEC) chairperson Vanaja Sarna’s statement that the collection of Goods and Services Tax (GST) will see buoyancy from April onwards and will cross Rs 90,000 crore per month.

On the global front, Asian markets closed mixed. China’s home prices rose in the fewest cities in five months in February, as the government’s almost two-year campaign to curb property speculation started to bite. The European markets were trading in red as investors looked ahead to a trading week in which the Federal Reserve is likely to hike interest rates. German Finance Minister Olaf Scholz said he is seriously concerned about a trade stand-off with the United States. Scholz said Germany would continue talks to dissuade the United States from imposing planned punitive steel and aluminum tariffs.

Back home, metal stocks took a heavy beating tracking losses in Chinese iron ore prices. Chinese iron ore fell to its lowest level since November as high inventory levels and a weak domestic steel market weighed on prices. Worries over the potential trade war between the US and China and frustration over US President Donald Trump’s steel and aluminium tariffs also played spoilsports hurting investors’ risk appetite. Select realty stocks were under pressure on private report that housing sales declined by around 40% last year to 2,02,800 units in seven major cities from the average sales of 2013 and 2014 mainly due to sharp fall in the Delhi-NCR market.

The BSE Sensex ended at 32923.60, down by 252.40 points or 0.76% after trading in a range of 32856.54 and 33275.79. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.56%, while Small cap index was down by 1.97%. (Provisional)

The top losing sectoral indices on the BSE were Telecom down by 3.32%, Realty down by 3.21%, Metal down by 2.64%, TECK down by 2.07% and IT down by 1.97%, while there were no gainers on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 1.09%, Power Grid up by 0.99%, Larsen & Toubro up by 0.91%, NTPC up by 0.70% and Hindustan Unilever up by 0.69%. (Provisional)

On the flip side, Tata Steel down by 4.35%, Bharti Airtel down by 4.28%, Wipro down by 2.96%, Coal India down by 2.91% and Yes Bank down by 2.46% were the top losers. (Provisional)

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that the US president’s recent move to impose a 25 percent tariff on all steel imports is unlikely to have any significant impact on the domestic steel industry in the medium term. It noted that the tariffs will take effect on March 23, 2018 and would be effective on all countries except Canada and Mexico which together comprises about a quarter of the total US imports.

According to the report, the impact of import tariffs may not be significant in the medium term due to reasons like global steel demand (ex-USA) is expected to increase by 25 MT in calendar year (CY) 2018. It noted that India's steel exports to the USA market remained a meagre 0.7 MT in CY2017, accounting for less than 1 percent of India's domestic demand. Therefore, it pointed out that Indian steel mills should be able to find an alternate market for its nominal US export volumes without much difficulty.

The rating agency further stated that Chinese steel exports has been steadily declining in the last two years, reaching 75 MT in CY2017 from the peak level of 112 MT in CY2015, and in the current year too, exports have continued to shrink, declining by 27.1 percent in the first two months of CY2018. It also noted that this trend is expected to continue throughout CY2018 on the back of a resilient Chinese domestic demand and proposed steel capacity cuts.

The CNX Nifty ended at 10094.20, down by 100.95 points or 0.99% after trading in a range of 10075.30 and 10224.55. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 1.21%, Power Grid up by 1.12%, Maruti Suzuki up by 1.06%, Larsen & Toubro up by 0.92% and Hindustan Unilever up by 0.91%. (Provisional)

On the flip side, HCL Tech down by 4.61%, Tata Steel down by 4.37%, Bharti Airtel down by 4.13%, Tech Mahindra down by 3.94% and Indian Oil Corporation down by 3.65% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 77.17 points or 1.08% to 7,086.97, Germany’s DAX decreased 124.52 points or 1.01% to 12,265.06 and France’s CAC decreased 42.34 points or 0.8% to 5,240.41.

Asian equity markets ended mixed on Monday as investors awaited the US Federal Reserve's highly anticipated monetary policy decision due later in the week as well as new Fed Chairman Jerome Powell's first press conference for directional cues. Japanese shares closed lower after an opinion poll showed Prime Minister Abe's support falling to its lowest since he took office in 2012. Investors ignored preliminary figures from the Ministry of Finance showing that Japan's exports and imports grew more-than-expected in February. The value of exports climbed 1.8 percent year-over-year in February, faster than the 1.4 percent rise economists had forecast. Meanwhile, Chinese and Hong Kong stocks ended higher after Chinese President Xi Jinping was re-elected unanimously to the post over the weekend by the country's legislature.