Post Session: Quick Review

Key equity benchmarks fell sharply on Monday, extending losses to a third session in a row, as weak global cues weighed down sentiments. Sharp sell-off in last leg of trade dragged the markets to low points, breaching their crucial 10,700 (Nifty) and 35,500 (Sensex) levels. Domestic bourses made a cautious start and traded with marginal losses, as traders remain concerned on report that Finance Commission Chairman N.K. Singh has sounded a note of caution against fiscal slippage, saying it would adversely impact the country’s macroeconomic stability as well as investment climate. He expressed apprehension that some states are not according priority to fiscal discipline, which was not the case earlier. Anxiety also persisted after Reserve Bank of India’s (RBI) data has showed the country’s foreign exchange reserves declined by $613.9 million to $393.12 billion in the week to December 14, due to fall in foreign currency assets. In the reporting week, foreign currency assets, a major component of the overall reserves, dropped by $631.6 million to $367.86 billion.

In afternoon trade, the markets managed to trim their initial losses, as traders found some solace with Finance minister Arun Jaitley expressing confidence of meeting the fiscal deficit target of 3.3% of GDP for the current financial year (FY19) despite revenue loss on account of reduction in GST rates. However, key indices failed to hold recovery and witnessed sharp sell-off in late hour of trade, as anxiety remained among the traders with the Directorate General of GST Intelligence (DGGI) has busted a racket of fraudulent companies engaged in raising fake tax invoices worth Rs 220 crore to avail input-tax credit. Selling further crept in with Sebi Chairman Ajay Tyagi’s statement that the capital markets, globally, have been quite volatile during the current year and are likely to remain so in coming times on account of various factors such as US Fed rate hikes, volatile oil prices, intensifying trade conflicts and sanctions

On the global front, Asian markets ended mixed, while European markets were trading in red, with lingering trade tensions, worries about Fed's independence and concerns over a partial U.S. government shutdown keeping investors nervous ahead of the Christmas break. Back home, tourism sector was in focus with Government think tank NITI Aayog proposing that the validity period of e-Visas be increased to 10 years and the number of annual visits for those on e-medical visa be enhanced to attract more tourists in the country.

The BSE Sensex ended at 35495.30, down by 246.77 points or 0.69% after trading in a range of 35423.24 and 35910.67. 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 0.45%, while Small cap index was down by 1.18%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.55%, Telecom up by 0.54% and TECK up by 0.44%, while Metal down by 2.11%, Realty down by 2.11%, Basic Materials down by 1.71%, Consumer Disc down by 1.57% and Consumer Durables down by 1.49% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.09%, Mahindra & Mahindra up by 1.04%, Kotak Mahindra Bank up by 0.97%, Bharti Airtel up by 0.86% and Infosys up by 0.50%. (Provisional)

On the flip side, Hero MotoCorp down by 4.37%, Bajaj Auto down by 3.09%, Tata Motors - DVR down by 2.45%, Tata Motors down by 2.39% and HDFC down by 2.34% were the top losers. (Provisional)

Meanwhile, Finance minister Arun Jaitley has expressed that the government is confident of meeting the fiscal deficit target of 3.3% of GDP for the current financial year (FY19) despite revenue loss on account of reduction in Goods and Services Tax (GST) rates.

The GST Council in its 31st meeting has decided to cut rates on 23 commonly used goods and services, which will lead to an annual revenue loss of Rs 5,500 crore. The GST Council cut tax rates on 17 goods and 6 services, ranging from cinema tickets, televisions, digital cameras and Jan Dhan accounts to frozen vegetables. The reduced rates will come into effect from January 1, 2019.

Besides, during the first seven months of FY19 (April-October), the fiscal deficit period stood at 103.9 per cent of budget estimates. The government has budgeted to contain fiscal deficit at 3.3 % of the GDP in Fy19, lower than 3.5 % in the previous financial year (FY18).

The CNX Nifty ended at 10668.70, down by 85.30 points or 0.79% after trading in a range of 10649.25 and 10782.30. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 1.75%, TCS up by 1.38%, Mahindra & Mahindra up by 1.00%, Wipro up by 0.99% and Kotak Mahindra Bank up by 0.92%. (Provisional)

On the flip side, JSW Steel down by 5.28%, Hero MotoCorp down by 4.68%, Indian Oil Corp. down by 3.08%, Bajaj Auto down by 3.04% and Hindalco down by 2.88% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 40.09 points or 0.6% to 6,681.08 and France’s CAC fell 44.55 points or 0.95% to 4,649.83.

Asian markets ended mixed in thin pre-Christmas trade on Monday as investors fretted about the impact of a partial US government shutdown and increasing trade tensions, with White House trade advisor Peter Navarro saying the trade war between the US and China would not come to an end in near-term. The US dollar slipped as political uncertainty weighed and Federal Reserve Bank of New York President John Williams said the US central bank is open to reconsidering its views on rate hikes next year. Oil prices inched higher in Asian trade after oil ministers from OPEC nations said they expect prices will arrest their recent slide and rebalance early next year. Chinese shares ended higher after the country's top policymakers signaled more support for the economy next year with tax cuts and other policy measures. Meanwhile, the markets in Japan and Indonesia were closed for public holidays.