Indian bourses continue to trade under pressure

Tracking regional indices, Indian bourses were trading under selling pressure in afternoon session, on the back of sustained selling activities by market-participants. Sentiments remained downbeat with India Ratings’ report warning that with populist decisions like farm loan waivers and other financial support schemes likely to gain significance in the run-up to the forthcoming next general elections, aggregate fiscal deficit of the states is expected to reach 3.2 per cent in FY20. It expects the states’ revenue account on aggregate to clock a deficit of 0.5 per cent of Gross Domestic Product (GDP) in FY20 due to a higher growth in revenue spends than revenue receipt. The market participants overlooked the International Monetary Fund’s (IMF) statement that India will further build its lead as the world’s fastest-growing major economy as it picks up pace next year while the global economy is forecast to slow. India’s GDP is forecast to expand 7.5% in FY20 and 7.7% in FY21, while China’s growth is seen at 6.2% in both years. The key indices also suffered due a falling rupee value against dollar. On the sectoral front, insurance sector remained in focus with global ratings agency Moody expressed confidence about the country’s insurance sector and said it will grow strongly on the back of robust GDP growth and evolving regulations.

On the global front, Asian markets were trading mostly in red, after the International Monetary Fund trimmed its global outlook for 2019 and 2020. The downgrade came after China said its economy grew at the slowest pace in 30 years in the last quarter of 2018. Back home, the BSE Sensex is currently trading at 36324.36, down by 254.60 points or 0.70% after trading in a range of 36282.93 and 36650.47. There were 3 stocks advancing against 28 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index fell 0.89%, while Small cap index was down by 0.77%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 0.51% and Healthcare up by 0.44%, while Metal down by 2.63%, Basic Materials down by 1.63%, Auto down by 1.63%, Industrials down by 1.05% and Consumer Disc down by 0.94% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.67%, Kotak Mahindra Bank up by 2.03% and Bajaj Finance up by 0.79%. On the flip side, Vedanta down by 3.25%, Tata Steel down by 2.94%, Mahindra & Mahindra down by 2.90%, Tata Motors down by 2.18% and Tata Motors - DVR down by 2.14% were the top losers.

Meanwhile, in order to boost manufacturing and exports of footwear, the Council for Leather Exports (CLE) has urged the government to cut Goods and Services Tax (GST) rate on footwear priced above Rs 1,000 to 12 percent. At present, 5% GST rate is applicable for footwear having a retail sale price up to Rs 1000 per pair, while 18% GST rate is applicable for footwear having a retail sale price exceeding Rs 1000 per pair.

CLE Chairman P R Aqeel Ahmed said “as the sector holds huge potential both for manufacturing and exports, we need support from the government.” Talking about the refund of GST, he said CLE is organising a series of awareness and outreach programmes at all the leather clusters in the country. He noted that the refund of GST duties is happening on time and is helping both big and small exporters to further take new orders from global buyers.

Currently, exports of leather and its products stand at $6 billion. Major export destinations include Europe and the US. Earlier, the commerce minister had unveiled an incentive package of Rs 2,600 crore for the leather and footwear sector in order to boost the exports and creation of jobs in the sector.

The CNX Nifty is currently trading at 10876.95, down by 84.90 points or 0.77% after trading in a range of 10864.15 and 10949.80. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 4.64%, Kotak Mahindra Bank up by 2.00%, GAIL India up by 1.65%, HPCL up by 1.13% and BPCL up by 0.98%. On the flip side, JSW Steel down by 3.32%, Vedanta down by 3.15%, Mahindra & Mahindra down by 3.00%, Tata Steel down by 2.99% and Hindalco down by 2.70% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 96.42 points or 0.47% to 20,622.91, Hang Seng decreased 299.39 points or 1.1% to 26,897.15, KOSPI fell 6.84 points or 0.32% to 2,117.77, Jakarta Composite dropped 27.63 points or 0.43% to 6,423.20, Shanghai Composite declined 34.29 points or 1.31% to 2,576.22 and Straits Times trembled 11.16 points or 0.35% to 3,209.40.

On the flip side, Taiwan Weighted was up by 5.26 points or 0.05% to 9,894.66.