Benchmarks continue weak trade in morning session

Indian equity benchmarks extended their weak trade in morning session on account of selling in frontline blue chip counters. The bears retained their grip on Dalal Street as weak global and domestic cues kept investors on the back foot. Also, the backdrop of political turmoil back home weighed on the markets. The rupee opened down against dollar on account of continued foreign fund outflows as well as hopes of a rate hike by the US Federal Reserve this week. A strong dollar and sustained foreign fund outflow weighed on the domestic unit. Foreign Portfolio Investors sold shares worth Rs 192.78 crore on Friday, according to the data available with NSDL. 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 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.

Traders were seen buying in Capital Goods and Consumer Durables stocks, while selling was witnessed in Metal, PSU and Realty sector stocks. In scrip specific development, 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. Shilpa Medicare was trading firm after the USFDA intimated the company that based on its inspection from November 11 to November 30, the unit of the company located at Telangana has been determined that the inspection classification of this facility is VAI.

On the global front, Asian markets were trading mostly in red. 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, the BSE Sensex and NSE Nifty were trading below the psychological 33,100 and 10,200 levels respectively. The market breadth on BSE was negative in the ratio of 551:1756, while 92 scrips remained unchanged.

The BSE Sensex is currently trading at 33087.14, down by 88.86 points or 0.27% after trading in a range of 33076.59 and 33275.79. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.22%, while Small cap index was down by 1.13%.

The only gaining sectoral indices on the BSE were Capital Goods up by 0.30% and Consumer Durables up by 0.07%, while Metal down by 2.05%, PSU down by 1.90%, Realty down by 1.55%, Oil & Gas down by 1.54% and Basic Materials down by 1.31% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.20%, Maruti Suzuki up by 0.76%, Hindustan Unilever up by 0.74%, TCS up by 0.58% and Mahindra & Mahindra up by 0.47%.

On the flip side, Coal India down by 3.25%, Tata Steel down by 2.33%, Asian Paints down by 2.09%, Adani Ports & Special Economic Zone down by 1.91% and SBI down by 1.82% were the top losers.

Meanwhile, raising concerns over the fiscal condition, the Reserve Bank of India’s (RBI) latest data has 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.

The RBI in its release said that the widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit brought about by increase in imports relative to exports. India’s trade deficit increased to $118.9 billion in April-December 2017 from $82.7 billion in the same period of 2016. As per the data, on a cumulative basis, the CAD increased to 1.9% of GDP in April-December 2017 from 0.7% in the corresponding period of 2016-17 on the back of a widening of the trade deficit.

The Central Bank said that the capital and financial account surplus rose to $12.6 billion in the December quarter from $7.3 billion a year ago, bolstered by robust foreign portfolio inflows worth $5.3 billion during this period. Private transfer receipts representing remittances by Indians employed overseas, amounted to $17.6 billion, surging by 16.0% from their level a year ago. 

Besides, net invisible receipts were higher in April-December 2017 mainly due to increase in net services earnings and private transfer receipts, while net Foreign Direct Investment (FDI) inflows during April-December 2017 moderated to $23.7 billion from $30.6 billion during the corresponding period of the previous year.

The CNX Nifty is currently trading at 10159.80, down by 35.35 points or 0.35% after trading in a range of 10156.20 and 10224.55. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 1.11%, Maruti Suzuki up by 0.90%, Hindustan Unilever up by 0.69%, Mahindra & Mahindra up by 0.63% and TCS up by 0.63%.

On the flip side, Indian Oil Corporation down by 3.79%, BPCL down by 3.72%, HPCL down by 3.19%, Coal India down by 3.00% and Tata Steel down by 2.44% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 220.46 points or 1.02% to 21,456.05, KOSPI Index decreased 19.71 points or 0.79% to 2,474.26, Jakarta Composite decreased 5.52 points or 0.09% to 6,299.44 and Taiwan Weighted decreased 0.92 points or 0.01% to 11,026.78.

On the other hand, FTSE Bursa Malaysia KLCI increased 1.87 points or 0.1% to 1,848.26, Shanghai Composite increased 4.23 points or 0.13% to 3,274.11 and Hang Seng increased 30.06 points or 0.1% to 31,532.03.