Markets trade slightly in red in early deals

Indian equity benchmarks are trading slightly in red in early deals on Friday ahead of Services PMI data for the month of December to be out later in the day. Traders remained cautious with a private report that despite crossing the Rs 1-trillion mark twice this year, the goods and services tax (GST) collections are running well behind the budgeted target. As opposed to a monthly target of Rs 1.04 trillion, the monthly run rate adjusting for refunds, works out to around Rs 89,600 crore. This could force the government to either cut its capital expenditure this year or roll over spending on account of subsidies to next year in order to meet the fiscal deficit target. However, losses remain capped with Finance Minister Arun Jaitley’s statement that enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases and another about Rs 70,000 crore is likely to be recovered in the remaining months of the current financial year.

On the global front, Asian markets are trading mostly in green at this point of time. However, Japanese markets tumbled as they reopened after the New Year holidays. The US markets end sharply lower on Thursday, as weak economic data and a rare sales warning from Apple sparked fresh worries among investors about a global slowdown.

Back home, banking sector stocks edged lower despite Finance Minister Arun Jaitlet’s statement that commercial banks were likely to recover Rs 70,000 crore ($9.95 billion) of bad loans by the end of March, helped by resolution of 12 large cases. NBFCs stocks remained buzzing with ratings agency ICRA’s report that the ongoing issues with the non-bank lenders will crimp the operating profits of such companies by up to 0.50%. It said the decline in profitability will be primarily due to increase in the cost of funds, slowdown in portfolio growth and cost of carrying additional liquidity due to the troubles.

The BSE Sensex is currently trading at 35494.23, down by 19.48 points or 0.05% after trading in a range of 35452.81 and 35704.85. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.04%, while Small cap index was down by 0.25%.

The top gaining sectoral indices on the BSE were Telecom up by 1.39%, PSU up by 0.53%, Power up by 0.50%, Utilities up by 0.49% and FMCG was up by 0.34%, while IT down by 1.32%, TECK down by 1.00%, Consumer Durables down by 0.29%, Energy down by 0.23% and Consumer Disc was down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.32%, Tata Motors - DVR up by 1.91%, Bharti Airtel up by 1.72%, NTPC up by 1.26% and Asian Paints up by 0.77%. On the flip side, Infosys down by 1.31%, HCL Tech down by 1.07%, TCS down by 1.05%, ICICI Bank down by 1.00% and Reliance Industries down by 0.43% were the top losers.

Meanwhile, in major relief to businesses, the Finance Ministry has decided to allow them to claim input tax credit (ITC) benefit till March 2019 for the first financial year (FY18) of Goods and Services Tax (GST) roll out. The ministry has allowed this provided it matches with the return filed by their suppliers. The deadline for claiming ITC ended on October 25, 2018.

The Central Board of Indirect Taxes and Customs (CBIC) through a gazette notification issued an order stating that ITC claims for the maiden year of GST roll out (July 2017 to March 2018) will be allowed till March 31, 2019. GST was rolled out from July 01, 2017.

Besides, the CBIC has also allowed businesses to correct any error or omission in filing of final sales return or GSTR-1 for the period July 2017-March 2018. Now businesses can correct the errors in the returns to be filed for January-March 2019.

ITC claims were allowed to businesses earlier provided businesses had generated invoice, paid taxes and filed returns. However, in the recent order the CBIC has mandated that ITC claims would have to be matched with GSTR-2A, which is auto-generated by the systems based on sales returns filed by suppliers.

The CNX Nifty is currently trading at 10664.00, down by 8.25 points or 0.08% after trading in a range of 10649.05 and 10729.40. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.95%, Tata Motors up by 2.35%, Bharti Airtel up by 1.66%, NTPC up by 1.50% and ONGC up by 1.23%. On the flip side, Infosys down by 1.58%, Tech Mahindra down by 1.50%, TCS down by 1.38%, Zee Entertainment down by 1.09% and HCL Tech down by 1.08% were the top losers.

Asian markets are trading mostly in green; Straits Times surged 27.46 points or 0.91% to 3,040.34, Hang Seng soared 326.10 points or 1.30% to 25,390.46, KOSPI jumped 11.47 points or 0.58% to 2,005.17, Jakarta Composite rose 35.48 points or 0.57% to 6,256.49 and Shanghai Composite was up by 44.66 points or 1.81% to 2,509.02.

On the flip side, Nikkei 225 tumbled 545.54 points or 2.73% to 19,469.23 and Taiwan Weighted was down by 109.46 points or 1.15% to 9,382.96.