Markets extend southward journey for fourth straight session

Extending their southward journey for fourth straight session, Indian equity benchmarks ended the Monday’s trade in red terrain with frontline gauges declining below their crucial 10,100 (Nifty) and 33,000 (Sensex) levels, as negative global cues on the prospect of global trade wars and caution ahead of the US Federal Reserve’s meet on March 20-21, kept denting traders’ sentiments. After making a cautious start, markets never looked confidant and extended their southward journey to end at day’s low. Traders reacted negatively on report that India’s October-December current account deficit sharply widened from a year earlier on higher imports. The October-December current account deficit widened to 2.0% of gross domestic product, or $13.5 billion, compared with 1.4%, or $8.0 billion, in the same period a year ago. Traders also remained on sidelines ahead of an informal World Trade Organization (WTO) ministerial meeting to be held in New Delhi on March 19-20, where Representatives from 50 countries will be participating. The 50 nations will engage in free and frank discussions on global trade to explore the options for resolving various issues and re-invigorating the WTO.

Traders failed to get any sense of relief with report that overseas investors have pumped in nearly Rs 6,400 crore in the segment in March so far on expectations of rebound in corporate earnings and easing of global oil prices. 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).

Weak opening in European markers too dampened sentiments, 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. Asian markets exhibited mixed trend on Monday. 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.

Back home, select stocks from realty counter edged lower 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. Metal stocks lost their shine 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.
Finally, the BSE Sensex declined 252.88 points or 0.76% to 32,923.12, while the CNX Nifty was down by 100.90 points or 0.99% to 10,094.25.

The BSE Sensex touched a high and a low of 33,275.79 and 32,856.54, respectively and there were 6 stocks on gaining side as against 25 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index declined 1.58%, while Small cap index was down by 1.98%.

The top losing sectoral indices on the BSE were Telecom down by 3.40%, Realty down by 3.01%, Metal down by 2.65%, TECK down by 2.08% and Basic Materials was down by 2.00%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Power Grid Corporation up by 1.12%, NTPC up by 1.03%, Larsen & Toubro up by 0.95%, Maruti Suzuki up by 0.80% and Hindustan Unilever up by 0.69%. On the flip side, Tata Steel down by 4.24%, Bharti Airtel down by 4.16%, Wipro down by 2.60%, Yes Bank down by 2.57% and Coal India down by 2.51% were the top losers.

Meanwhile, central board of excise & customs (CBEC) chairperson Vanaja Sarna has said that India's goods and services tax (GST) collections is likely to register a growth from April 2018 onwards and will cross Rs 90,000 crore per month. She also indicated that revenue collection from GST fell marginally to Rs 86,318 crore in January, from Rs 86,703 crore in December.

 CBEC chairperson Vanaja Sarna has stated that those who did not come into the fray, should come into the fray. She said “Enforcement action will take place and you will get more people on board.” Besides, she noted that initial hiccups related to the new tax regime have been settling now and a lot has been settled. She added that all technologies that are required are there.

In a major relief to exporters and other taxpayers, CBEC has taken an initiative to observe a special drive 'refund sanction fortnight' across the country from March 15 to March 29 to deal exclusively with the pending GST refund claims. The exporters who have IGST refund or Input Tax credit (ITC) claim pending with the CBEC can visit the field offices where the tax officials will help them. The CBEC has already given refunds to the tune of Rs 5,000 crore but as much as 70 percent of total amount returned to exporters is still stuck, even after eight months of GST roll-out.

The CNX Nifty traded in a range of 10,224.55 and 10,075.30. There were 9 stocks in green as against 41 stocks in red on the index.

The top gainers on Nifty were NTPC up by 1.21%, Power Grid Corporation up by 1.12%, Maruti Suzuki up by 1.06%, Hindustan Unilever up by 0.99% and Larsen & Toubro up by 0.92%. 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 BPCL down by 3.70% were the top losers.

European markets were trading mostly in green; Germany’s DAX declined 116.03 points or 0.94% to 12,273.55, UK’s FTSE 100 decreased 89.64 points or 1.25% to 7,074.50 and France’s CAC was down by 39.07 points or 0.74% to 5,243.68.

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.