Benchmarks end F&O expiry day on dismal note

March F&O expiry session turned out to be a dismal day of trade for Indian equity benchmark with frontline gauges ending below their crucial 33,000 (Sensex) and 10,150 (Nifty) levels, as traders remained cautious ahead of a long holiday weekend, with domestic equity markets likely to remain closed on Thursday and Friday, on account of Mahavir Jayanti and Good Friday, respectively. Markets started the session on pessimistic note as sentiments remained downbeat 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% of the assessees filed returns. Around 5.951 million GSTR 3B returns were filed for the month of February till March 25. This is 69 per cent of total taxpayers who are required to file monthly returns. Sentiments also remained dampened 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.

Factors like 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,  also weighed on the sentiments. Meanwhile, government’s Chief Economic Advisor Arvind Subramanian has said 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. Traders failed to get any sense of relief with the commerce ministry’s statement that India and China have agreed to draw-up a medium and long term roadmap with action points and timelines in order to increase bilateral trade in a balanced and sustainable manner. It also pointed out that two neighbouring nations in Asia are the largest emerging economies of the world with 35% of the world's population and about 20% of the world’s GDP, but bilateral trade between the two nations is less than 1% of global trade.

Weak opening in European markets too dampened sentiments, as persistent concerns over a regulatory crackdown on big tech and a string of negative headlines overnight hit sentiment towards the sector that drove a long bull market. All the Asian markets ended in red as tech stocks extended losses following sell-offs of their US peers overnight.

Back home, 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. Telecom stocks declined with ICRA’s latest report stating that the revival India’s telecom sector is likely to be prolonged and the pressure on the cash flows of service providers might continue for few more quarters. Moreover, telecom secretary Aruna Sundararajan said that the much-awaited merger of Idea Cellular and Vodafone is in final stages of approval.

Finally, the BSE Sensex declined 205.71 points or 0.62% to 32,968.68, while the CNX Nifty was down by 70.45 points or 0.69% to 10,113.70.

The BSE Sensex touched a high and a low of 33,104.11 and 32,917.66, respectively and there were 12 stocks on gaining side as against 19 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.53%, while Small cap index was down by 0.92%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.24% and Oil & Gas was up by 0.06%, while Telecom down by 2.58%, Metal down by 2.04%, Basic Materials down by 1.66%, Healthcare down by 1.14% and Realty was down by 1.07% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.27%, Coal India up by 2.94%, Hero MotoCorp up by 2.30%, Kotak Mahindra Bank up by 0.55% and Yes Bank up by 0.49%. On the flip side, Tata Steel down by 3.25%, Bharti Airtel down by 3.05%, Adani Ports down by 2.93%, Sun Pharma down by 1.95% and ICICI Bank down by 1.94% were the top losers.

Meanwhile, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has stated that the 'crisis' facing by India’s banking system, mainly public sector banks (PSBs), should be used as an opportunity to privatise the banks. As per the report, privatisation of the banks should not be done in a harsh manner and be done in a way that is acceptable to the political leadership.

The report noted that for starters, the government equity which is as high as 80 percent in some PSBs, should be brought down to below 50 percent. It also expects that the moment the government equity is below 50 percent, the banks would be out of the clutches of the CVC, CBI and CAG, giving more autonomy and confidence to the top management to lend freely without fear of being haunted. Besides, it said that the boards would then be much more professional and the independent directors would be truly independent.

ASSOCHAM also pointed out that the boards would then be empowered to take strategic decisions without going to the Finance Ministry, although the Reserve Bank of India (RBI) should and would continue to play the role of a regulator, but in a much more effective manner. It added that the narrative must be built to the effect that the government can use both PSBs and private sector banks as the agents of change, without hurting the interest of the lenders.

The CNX Nifty traded in a range of 10,158.35 and 10,096.90. There were 20 stocks in green as against 30 stocks in red on the index.

The top gainers on Nifty were Wipro up by 3.41%, Bosch up by 2.90%, GAIL India up by 2.82%, Tech Mahindra up by 2.49% and Hero MotoCorp up by 2.00%. On the flip side, Bharti Airtel down by 3.71%, Tata Steel down by 3.28%, Vedanta down by 2.77%, Adani Ports down by 2.60% and Reliance Industries down by 2.02% were the top losers.

European markets were trading in red; Germany’s DAX decreased 111 points or 0.93% to 11,859.83, France’s CAC declined 50.52 points or 0.99% to 5,065.22 and UK’s FTSE 100 was down by 24.48 points or 0.35% to 6,975.66.

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.