Local equities turn negative

Local equity benchmarks wiped out all gains to enter in negative zone, despite positive global clues. Both Sensex and Nifty were trading below their crucial 36,100 and 10,850 marks, respectively. TCS, Bharti Airtel and Larsen & Toubro were the prime losers among heavy-weights, pushing Sensex lower. Traders remain concerned with a report that in the first eight months of FY 2018-19, India's fiscal deficit target has overshot by 15 per cent, largely due to a revenue shortfall rather than front-loading of expenditure. However, losses remain capped, as traders were taking solace with a report that the Union Cabinet approved a proposal for a $75-billion bilateral swap arrangement between India and Japan, a move aimed at enhancing the RBI's ability to manage exchange rate volatility. Some support also came with GST Council’s report that it has doubled the exemption limit for Goods and Services Tax (GST) registration to Rs 40 lakh from Rs 20 lakh to ease cost of compliance for small taxpayers or micro, small and medium enterprises (MSMEs). This means businesses with an annual turnover under Rs 40 lakh will now be exempt from registration and payment of GST.

On the global front, Asian markets were trading in green, as investors cheered a more restrained Federal Reserve and US-China trade. As Talks between American and Chinese negotiators may have ended without significant breakthroughs, but traders are choosing to focus on the positives. Back home, Agriculture industries stocks were in focus, as Commerce & Industry Minister Suresh Prabhu stated that in order to promote agriculture exports, the government is considering providing transport subsidy to States. He said ‘we are considering giving transport subsidy to states. It is under active consideration to promote agriculture exports’.

The BSE Sensex is currently trading at 36079.46, down by 27.04 points or 0.07% after trading in a range of 36071.71 and 36214.26. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.20%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were FMCG up by 0.49%, Metal up by 0.43%, Basic Materials up by 0.33%, Oil & Gas up by 0.20% and Healthcare was up by 0.14%, while Realty down by 1.32%, Telecom down by 1.14%, TECK down by 0.84%, IT down by 0.83% and Capital Goods was down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.30%, ONGC up by 0.84%, Sun Pharma up by 0.83%, Vedanta up by 0.64% and HDFC was up by 0.63%. On the flip side, TCS down by 1.87%, Bharti Airtel down by 1.81%, Tata Motors - DVR down by 1.33%, Larsen & Toubro down by 1.12% and HCL Tech was down by 1.06% were the top losers.

Meanwhile, in order to promote agriculture exports, Commerce & Industry Minister Suresh Prabhu has said the government is considering providing transport subsidy to States. He said ‘we are considering giving transport subsidy to states. It is under active consideration to promote agriculture exports’. While the World Trade Organization does not allow subsidies for farm exports, developing countries like India can provide subsidies to exporters for transport and marketing purposes.

He further mentioned that the issue was discussed with the representatives of States, including Karnataka, Arunachal Pradesh, Uttar Pradesh, Assam, Nagaland, Tamil Nadu and Punjab, who participated in the meeting of the Council for Trade Development and Promotion.

Besides, on credit issues being faced by exporters, Prabhu stated the Commerce Ministry was also in talks with the Finance Ministry on increasing lending to exporters and the Financial Services Secretary will soon hold a meeting with banks on the issue.

The CNX Nifty is currently trading at 10815.70, down by 5.90 points or 0.05% after trading in a range of 10810.15 and 10850.15. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.40%, UPL up by 1.39%, Hindalco up by 1.23%, ONGC up by 1.19% and Grasim Industries was up by 1.16%. On the flip side, TCS down by 1.96%, Bharti Airtel down by 1.79%, Larsen & Toubro down by 1.30%, GAIL India down by 1.16% and Bharti Infratel was down by 0.96% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 205.90 points or 1.02% to 20,369.70, Hang Seng increased 49.94 points or 0.19% to 26,571.37, Taiwan Weighted strengthened 31.26 points or 0.32% to 9,751.95, Straits Times advanced 15.26 points or 0.48% to 3,198.77, Jakarta Composite soared 12.32 points or 0.19% to 6,341.03, KOSPI rose 8.09 points or 0.39% to 2,071.37 and Shanghai Composite was up by 2.88 points or 0.11% to 2,537.98.