Benchmark continue sluggish trade

Indian equity benchmarks continued their sluggish trade in morning session, with losses of around half a percent, tracking correction in global peers on worries over Eurozone break-up risk due to political turmoil in Italy. Traders remained concerned with a private report stating that the Monetary Policy Committee (MPC) is expected to maintain the repo rate at 6% in the ensuing policy review meeting scheduled for 4-6 June, however, there is also a probability of a pre-emptive hike by 25 bps. Traders shrugged off a report stating that India’s exports are expected to record a growth of about 15-20% and touch $ 350 billion in the current fiscal on account of a host of factors including rise in commodity prices. Investors also failed to take any sense of relief with CRISIL’s report stating that direct tax collection has surged dramatically post 2016 due to the Income Declaration Scheme and demonetisation. The income tax growth increased from 8.2% in FY16 to 26.8% in FY17 and 21.0% in FY18. The corporate tax growth in the corresponding years were 5.7%, 7.0% and 16.3% respectively. This indicates a significant jump in the number of new income tax filers.

On the global front, Asian markets were trading in red, as a sell-off in US and European markets weighed on sentiment during the Asian trading session. The political crisis in Italy took center stage, with investors concerned over its implications for the rest of the euro zone. Back home, in scrip specific development, Bodal Chemicals gained on getting nod to acquire further stake in TCPL. Besides, IRB Infrastructure advances with arm executing concession agreement with National Highways Authority of India.

The BSE Sensex is currently trading at 34797.75, down by 151.49 points or 0.43% after trading in a range of 34735.11 and 34876.13. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.11%, while Small cap index was down by 0.03%.

The few gaining sectoral indices on the BSE were Power up by 1.02% and Utilities was up by 0.77%, while Telecom down by 0.91%, Bankex down by 0.70%, Oil & Gas down by 0.55%, Capital Goods down by 0.53% and Auto was down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.59%, Power Grid up by 1.64%, Mahindra & Mahindra up by 1.28%, NTPC up by 1.09% and Infosys was up by 0.13%. On the flip side, ICICI Bank down by 1.91%, Tata Motors - DVR down by 1.53%, Tata Motors down by 1.32%, Wipro down by 1.22% and Hero MotoCorp was down by 1.18% were the top losers.

Meanwhile, amid various supporting factors like rising commodity prices along with depreciation of Indian rupee, Federation of Indian Export Organisations (FIEO) President Ganesh Gupta has said that Indian exports is likely to grow at 15-20% to touch $350 billion in FY19, despite increasing global protectionism.

However, Gupta expressed need of fiscal and non-fiscal incentives from the government, in order to drive shipments in both advanced and emerging markets. He is also hopes that the government will actively engage with trading partners particularly with the US to protect trade interest of the country. He further highlighted that the US decision to impose economic sanctions on Iran would create an opportunity for domestic exporters to increase their shipments to that country. He also pointed that the country may face challenge if sanctions will be imposed on the financial system.

Besides, FIEO President underlined the issues being faced by exports at insurance front, saying that Export Credit Guarantee Corporation of India (ECGC) delay the process of claims, which impact exporters and added that the FIEO has raised this issue with the commerce ministry.

The CNX Nifty is currently trading at 10580.80, down by 52.50 points or 0.49% after trading in a range of 10558.45 and 10602.15. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.78%, Power Grid up by 1.84%, Mahindra & Mahindra up by 1.44%, NTPC up by 1.21% and UPL was up by 1.12%. On the flip side, Hindalco down by 2.16%, ICICI Bank down by 1.69%, HPCL down by 1.60%, Tata Motors down by 1.51% and BPCL was down by 1.49% were the top losers.

Asian markets were trading in red, Hang Seng declined 430.11 points or 1.41% to 30,054.47, Nikkei 225 slipped 355.32 points or 1.59% to 22,003.11, Taiwan Weighted losses 124.96 points or 1.14% to 10,839.16, Shanghai Composite dropped 55.38 points or 1.77% to 3,065.08, KOSPI Index fell 44.68 points or 1.82% to 2,412.57 and Jakarta Composite was down by 0.65 points or 0.01% to 6,067.67.