Indian bourses continue to trade in negative terrain

Indian bourses continued to trade in negative territory in afternoon session, on selling in Energy, Banking, Oil & Gas and Metal sectors amid weakness rupee as well as negative Asian cues.  Sentiments remained weak with Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta’s statement that exporters are facing uncertainty due to a continuous depreciation of the domestic currency as they are not able to negotiate properly prices of goods in the global markets. Caution also crept ahead of the release of the gross domestic product (GDP) data for April-June quarter today. However, further losses were restricted as some support came in with a private report that the economic growth is expected to rise to 7.6% in the April-June quarter of 2018-19 from a sub-6% figure in the year-ago period mainly due to a low-base effect. On the sectoral front, Airline sector remained in focus with report that the aviation ministry is now working on a package to provide some relief to the financially-stressed airline sector. It will seek finance ministry’s approval for the package, though an earlier request of getting jet fuel in lower GST slab was not approved.

On the global front, Asian markets were trading mostly in red, as the China-US trade row burst back into view with a report that Donald Trump wants to impose tariffs on $200 billion of goods as early as next week. Back home, the BSE Sensex is currently trading at 38606.90, down by 83.20 points or 0.22% after trading in a range of 38566.81 and 38838.45. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.03%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.81%, IT up by 1.14%, TECK up by 0.91%, FMCG up by 0.52% and Capital Goods up by 0.52%, while Energy down by 1.39%, Bankex down by 0.46%, Oil & Gas down by 0.43%, Metal down by 0.41% and Auto down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.17%, Wipro up by 1.99%, Indusind Bank up by 1.72%, Power Grid up by 1.45% and Infosys up by 1.33%. On the flip side, Yes Bank down by 5.68%, Reliance Industries down by 2.32%, Bharti Airtel down by 1.39%, Vedanta down by 1.37% and Mahindra & Mahindra down by 1.33% were the top losers.

Meanwhile, Union finance minister Arun Jaitley has said that the demonetisation of Rs 500 and Rs 1000 notes in November 2016, led to formalisation of economy, increased tax collection and higher growth. His statement comes a day after the Reserve Bank of India (RBI) data revealed that as much as 99.3 percent of the demonetised notes have returned to the banking system.

The minister has stated that the large purpose of note ban exercise was to move India from a tax non-compliant society to a tax-compliant society. He also said that this necessarily involved formalisation of the economy and a blow to the black money. He said ‘This is the positive impact of demonetisation. More formalisation of economy, more money in the system, higher tax revenue, higher expenditure, higher growth after the first two quarters.’

Jaitley further highlighted that the growth of income tax collections in the pre-demonetisation two years was 6.6% and 9%, while post-demonetisation, the collections rose 15% and 18% in the next two years. He noted that the same trend is visible in the third year. Adding further, he noted that in March 2014, the number of Income Tax (IT) returns filed was 3.8 crore, whereas in 2017-18, it has grown to 6.86 crore. He said in the last two years, when the impact of demonetisation and other steps are analysed, the IT returns have increased 19% and 25%.

The CNX Nifty is currently trading at 11657.50, down by 19.30 points or 0.17% after trading in a range of 11643.20 and 11727.65. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.55%, Tech Mahindra up by 3.08%, Dr. Reddys Lab up by 2.77%, HCL Tech. up by 2.60% and Sun Pharma up by 2.13%. On the flip side, Yes Bank down by 5.86%, Reliance Industries down by 2.39%, Bajaj Finance down by 2.16%, Bajaj Finserv down by 1.64% and Zee Entertainment down by 1.49% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 9.12 points or 0.28% to 3,216.60, Taiwan Weighted shed 29.81 points or 0.27% to 11,063.94, Jakarta Composite dropped 71.61 points or 1.2% to 5,947.35, Hang Seng dipped 264.34 points or 0.95% to 27,899.71, Shanghai Composite decreased 11.92 points or 0.44% to 2,725.82 and Nikkei 225 fell 4.35 points or 0.02% to 22,865.15.

On the flip side, KOSPI was down by 15.53 points or 0.67% to 2,322.88.