Post Session: Quick Review

Indian equity benchmarks traded in red throughout the day and ended with losses of over half percent, following negative cues from global stocks. Markets snapped the two-day gaining streak with Sensex and Nifty slipping below their crucial 33,000 and 10,150 levels, respectively. Markets started the session on a pessimistic note as traders remained concerned with report that Goods and Services Tax (GST) collections slid for the second straight month to Rs 851.74 billion in February as only 69 per cent of the assessees filed returns. Around 5.951 million GSTR 3B returns were filed for the month of February till March 25. Sentiments on the street weakened further with a private report stating that weak macroeconomic indicators like current account deficit and inflation have exposed India to adverse global macro developments such as US monetary policy trajectory and trade war risks. Expiry of futures and options contracts for the month of March and profit booking on the last trading day for the current financial year 2017-18 before the long term capital gains tax (LTCG) kicks in from April 2, 2018 are the other factors that weighed on the sentiments. Traders failed to take any sense of relief with Chief Economic Advisor Arvind Subramanian’s statement that he wanted a simpler GST structure. He also said that once the GST Council is confident that the revenue through indirect tax is stabilising, it will do more simplification future.

On the global front, Asian markets ended lower, as tech stocks extended losses following sell-offs of their U.S. peers overnight. The European markets were trading in red in early deals on Wednesday, as persistent concerns over a regulatory crackdown on big tech and a string of negative headlines overnight hit sentiments towards the sector that drove a long bull market.

Back home, majority of Telecom stocks ended lower after telecom secretary Aruna Sundararajan said that the merger proposal of Vodafone India and Idea Cellular, to create the country’s largest telecom company, is in the final stages of approval. Besides, stocks related to IT space edged lower after the Income Tax Department freezed bank accounts and deposits of Nasdaq listed IT firm, Cognizant in Chennai and Mumbai for allegedly evading dividend distribution tax.

The BSE Sensex ended at 32957.93, down by 216.46 points or 0.65% after trading in a range of 32917.66 and 33104.11. There were 8 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.46%, while Small cap index was down by 0.92%. (Provisional)

The only gaining sectoral indices on the BSE were Consumer Durables up by 0.18% and Oil & Gas up by 0.04%, while Telecom down by 2.66%, Metal down by 2.14%, Basic Materials down by 1.75%, Realty down by 1.09% and Power down by 1.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Wipro up by 3.36%, Coal India up by 2.76%, Hero MotoCorp up by 2.05%, Yes Bank up by 1.12% and Indusind Bank up by 0.56%. (Provisional)

On the flip side, Bharti Airtel down by 3.52%, Adani Ports &SEZ down by 2.92%, Tata Steel down by 2.91%, Reliance Industries down by 2.09% and Bajaj Auto down by 2.09% were the top losers. (Provisional)

Meanwhile, amid intense pricing competition among telecom companies, the ratings agency, ICRA in its latest report has said that the recovery in the telecom sector is likely to be prolonged and the companies may see the pressure on their cash flows for few more quarters.

The rating agency has said that price competition in the sector is expected to continue to remain intense as the larger operators are contesting to acquire subscribers of the exiting telcos and added that the revenues and OPBDITA of the sector may fall by 13% and 34% respectively, in financial year 2017-18 (FY2018). However, it expects recovery in revenues and profitability of telecom sector by end of financial year 2018-19 (FY2019) and is also expecting reduction in the industry debt levels to Rs 4.3 lakh crore by FY2019 from the estimation of Rs 4.7 lakh crore as on March 31, 2018, on the back of asset monetisation and increased promoter support. 

Besides, on the long term basis, ICRA expects recovery in the sector, on the back of a consolidated structure, better pricing power and data usage with greater price-inelasticity. It also noted that larger telcos are getting an opportunity from the exit of smaller telcos to garner subscribers and the competition for them remains intense.

The CNX Nifty ended at 10121.25, down by 62.90 points or 0.62% after trading in a range of 10096.90 and 10158.35. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Wipro up by 3.41%, Bosch up by 2.90%, Tech Mahindra up by 2.62%, GAIL India up by 2.43% and Hero MotoCorp up by 2.00%. (Provisional)

On the flip side, Bharti Airtel down by 3.71%, Tata Steel down by 3.35%, Vedanta down by 2.77%, Adani Ports &SEZ down by 2.60% and Reliance Industries down by 2.02% were the top losers. (Provisional)

The European markets were trading in red; Germany’s DAX decreased 139.4 points or 1.16% to 11,831.43, France’s CAC was down by 52.58 points or 1.03% to 5,063.16 and UK’s FTSE 100 shed 44.02 points or 0.63% to 6,956.12. 

Asian stocks closed in red on Wednesday after US technology shares came under heavy selling pressure overnight on concerns about tighter industry regulations. Trade-related tensions also kept investors nervous. Japanese stocks fell, led by a sell-off in tech firms after their US counterparts skidded on concerns about government regulation, while ex-dividend trades added to the broader losses. Further, Chinese stocks closed lower, led by declines in the foreign trade sector. Stocks related to foreign trade dropped following the US government's latest tariff plan on imports from China.