Benchmarks trade slightly in red in early deals

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals on Monday amid sluggish global cues. 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. Sentiments also remain dampened 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.

Weak global cues too dampened sentiments with Asian counters exhibiting mixed trend at this point of time, as investors fretted that political instability in the United States was leaving the country rudderless at a time when the global economy was showing signs of faltering. The US markets settled sharply lower on Friday as investors remained gripped by fears of a partial government shutdown, rising interest rates and flagging global growth and uncertainty surrounding US-China trade relations.

Back home, solar stocks remained buzzing as the GST council issued clarity on the confusion over the rates for solar power projects. It clarified that 70% of the gross value of project shall be deemed as the value of supply of said goods attracting 5% rate. Aviation stocks remained in focus on report that India's domestic air passenger traffic grew by 11.03 per cent to 11.64 million in November 2018. Passenger traffic during the January-November 2018 period grew by 19.21 per cent. In scrip specific developments, Strides Pharma surged with arm getting USFDA’s approval for Polyethylene Glycol, Electrolytes and GE Power edged higher with consortium bagging order worth $98.4 million.

The BSE Sensex is currently trading at 35716.15, down by 25.92 points or 0.07% after trading in a range of 35675.02 and 35910.67. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index dropped 0.24%, while Small cap index was down by 0.34%.

The top gaining sectoral indices on the BSE were IT up by 0.88%, TECK up by 0.72%, Healthcare up by 0.42%, FMCG up by 0.35% and Bankex up by 0.03%, while Metal down by 1.24%, Realty down by 1.17%, Consumer Durables down by 0.95%, Basic Materials down by 0.82% and Consumer Discretionary Goods & Services was down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.80%, TCS up by 1.28%, Infosys up by 1.27%, Tata Motors up by 0.99% and SBI up by 0.91%. On the flip side, Hero MotoCorp down by 3.28%, Bajaj Auto down by 2.01%, Vedanta down by 1.57%, Bajaj Finance down by 1.51% and HCL Tech down by 1.42% were the top losers.

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 is currently trading at 10731.95, down by 22.05 points or 0.21% after trading in a range of 10725.55 and 10782.30. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.67%, TCS up by 1.23%, Infosys up by 1.08%, SBI up by 0.72% and Tata Motors up by 0.71%. On the flip side, Hero MotoCorp down by 3.14%, JSW Steel down by 2.73%, Bajaj Auto down by 1.94%, Vedanta down by 1.47% and HCL Tech. down by 1.37% were the top losers.

Asian markets are trading mixed in early deals, Hang Seng declined 102.04 points or 0.40% to 25,651.38, Taiwan Weighted slipped 19.23 points or 0.20% to 9,626.93 and KOSPI was down by 6.01 points or 0.29% to 2,055.48. On the flip side, Straits Times rose 0.85 points or 0.03% to 3,046.89 and Shanghai Composite was up by 4.33 points or 0.17% to 2,520.58.