Post Session: Quick Review

Indian equity benchmarks extended their losing streak for third straight session and ended with losses of over half a percent on Thursday, weighed by a fall in Metal and Telecom stocks. The opening show was positive, on the back of strengthening rupee against the US dollar and falling global crude oil prices. Traders took some encouragement with private report stating that the Reserve Bank’s move to extend the deadline for meeting the capital conservation buffer (CCB) norms by one year would help increase lending capacity of banks by over Rs 3.5 lakh crore. The additional amount will help provide much-needed fund for micro, small and medium enterprises (MSMEs) and non-banking financial companies (NBFCs) that are facing cash crunch. Traders also took note of a report that European Union has unveiled a 'strategy paper' outlining the broad roadmap for stepping up cooperation with India in a range of key sectors, including trade, investment, Defence and security, innovation, and on dealing with various global challenges.

However, markets failed to sustain early gains and fell into negative territory in second half of the day, as traders turned cautious with Reserve Bank of India (RBI) revealing that the top 20 defaulters of public sector banks account for Rs 2.36 lakh crore, or 20%, of total bad loans in India, though it is yet to reveal their names. The total bad loans in the Indian banking system are Rs 10.2 lakh crore as of March 31, 2018. Selling further crept in with private reports that India could see two rate hikes in the initial monetary policies of next financial year. Market participants shrugged off a private report showing that India is now the second-fastest growing innovator after China among major Asian countries, with patent publication nearly doubling in a decade.

On the global front, Asian markets ended mostly in green on Thursday, following a rebound in energy and tech stocks on Wall Street. European markets were trading in red, as investors remained cautious in the face of Brexit and Italy budget difficulties in Europe, and wider geopolitical tensions. Back home, telecom sector was in focus with private report stating that the hyper-competition in the telecom sector is expected to spill over to the coming year as Reliance Jio will continue to dominate the 4G space for next six to twelve months. Besides, automobile sector stocks ended lower with Crisil Ratings in its latest report revising the passengers' vehicles (PV) volume growth forecast downward to 7-9 per cent, from its earlier estimate of 9-11 per cent for the financial year, owing to sluggish demand and higher inventory even during the festive season.

The BSE Sensex ended at 34985.49, down by 214.31 points or 0.61% after trading in a range of 34937.98 and 35364.50. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.79%, while Small cap index was down by 0.51%. (Provisional)

The only gaining sectoral index on the BSE was Capital Goods up by 0.10%, while Metal down by 1.86%, Telecom down by 1.56%, Realty down by 1.27%, Power down by 1.26% and Bankex down by 1.20% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & SEZ up by 1.69%, HDFC up by 0.54%, Larsen & Toubro up by 0.41%, TCS up by 0.40% and ONGC up by 0.16%. (Provisional)

On the flip side, Mahindra & Mahindra down by 3.24%, Tata Steel down by 2.24%, Wipro down by 1.99%, Axis Bank down by 1.92% and Power Grid down by 1.78% were the top losers. (Provisional)

Meanwhile, the investigation arm of the Finance Ministry has detected tax evasion worth Rs 29,088 crore in 1,835 cases in the first seventh months (April-October) of the current financial year (FY19). Of this, the Directorate General of GST Intelligence (DGGI), which is enforcement agency for checking indirect tax evasion, has detected evasion of goods and services tax (GST) worth Rs 4,562 crore in 571 cases. The bulk of the evasion was detected in case of service tax. The total number of cases where service tax was evaded stood at 1,145 involving Rs 22,973 crore. In case of central excise duty, it detected 119 cases where tax evaded was worth Rs 1,553 crore.

Further, the total amount of detection may be more as the data does not include detection by field offices of the Central Board of Indirect Taxes and Customs (CBIC).  On recovery of evaded taxes, a total amount of Rs 5,427 crore was realised during seven months of FY19. These include recovery from previous cases and those detected during the current financial year. Of the total recovery, Rs 3,124 crore was from GST evaders, followed by Rs 2,174 crore in case of service tax, and Rs 128 crore from those who had evaded central excise.

Earlier, the Finance Ministry had extended the informant reward scheme of central excise and service tax to GST. The scheme was modified to include officers of other government agencies like police, BSF, CISF and coast guard. According to reward scheme, informers and government servants were eligible for reward up to 20% of the net sale-proceeds of the contraband goods seized and/or amount of duty/ service tax evaded plus amount of penalty levied and recovered

The CNX Nifty ended at 10527.10, down by 72.95 points or 0.69% after trading in a range of 10512.00 and 10646.25. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 4.47%, Adani Ports & SEZ up by 1.87%, Larsen & Toubro up by 0.51%, HDFC up by 0.46% and TCS up by 0.31%. (Provisional)

On the flip side, Mahindra & Mahindra down by 3.26%, Hindalco down by 2.64%, Grasim Industries down by 2.52%, Indian Oil Corp. down by 2.44% and Ultratech Cement down by 2.32% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 72.64 points or 1.04% to 6,977.59, France’s CAC fell 43.93 points or 0.89% to 4,931.57 and Germany’s DAX shed 92.70 points or 0.83% to 11,151.47.

Asian markets ended mostly in green on Thursday with Wall Street regaining its footing overnight after a two-day slide. Chinese shares ended slightly lower as investors looked ahead to a crucial meeting between Chinese President Xi Jinping and his US counterpart Donald Trump at a G20 meeting in Argentina later this month. Meanwhile, Japanese shares advanced, with a relatively cheaper yen supporting underlying sentiments ahead of holidays in Japan and the US.