Bears hold grip on Dalal Street

Bears were holding their grip on Dalal Street in late afternoon session, amid weak opening of European markets. In line with larger peers, the broader markets were too lingering under pressure, while Healthcare index declined the most on the BSE. Domestic sentiments got hit with a private report stating that the economy is likely to lose steam and may clip at 6.6 percent in the first half of 2019 from 7.4 percent a year ago, on account of the global slowdown and the uncertainty about the outcome of the forthcoming general elections. Adding more anxiety among the market participants, another private report showed that the government is set breach the fiscal deficit target yet again by 40 bps for 2018-19, and raise the target to 3.5 percent for next fiscal in the forthcoming budget that may be skewed towards the rural economy.

On the sectoral front, realty stocks were trading lower, impacted by credit rating agency, ICRA’s latest survey report that the imposition of the Goods and Services Tax (GST) on the joint development projects has resulted in decline in the proportion on year-on-year basis from 93 per cent in FY17 to 71 per cent in FY18. Further, coal industry stocks came under pressure, amid reports that India's 2018 thermal coal imports rose at the fastest pace in four years, despite moves by Prime Minister Narendra Modi's government to cut imports in a bid to reduce its trade deficit.

On the global front, European markets were trading in red, as Germany's Ifo business confidence indicator dropped at a faster-than-expected pace in January and fell below 100 for the first time since May 2016. The survey results from the Ifo Institute showed that the Ifo business climate index dropped to 99.1 from 101 in December. Asian markets were also trading in red.

The BSE Sensex is currently trading at 35634.25, down by 391.29 points or 1.09% after trading in a range of 35565.15 and 36124.26. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.07%, while Small cap index was down by 2.08%.

The only gaining sectoral indices on the BSE were TECK up by 0.56% and IT up by 0.20%, while Healthcare down by 2.25%, Basic Materials down by 2.21%, Bankex down by 1.99%, Auto down by 1.62% and Power down by 1.57% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.63%, TCS up by 1.58%, Larsen & Toubro up by 1.19%, Asian Paints up by 0.62% and Power Grid up by 0.40%. On the flip side, Bajaj Finance down by 6.14%, Yes Bank down by 4.85%, ICICI Bank down by 4.82%, Indusind Bank down by 2.46% and Hero MotoCorp down by 2.32% were the top losers.

Meanwhile, credit rating agency, ICRA in its latest report has showed that realty joint development projects got hit in FY18 with the challenges posed by the applicability of the GST, which has pulled down the proportion on year-on-year basis to 71 per cent in FY18 from 93 per cent in FY17.

The rating agency further noted that the developments were initially more concentrated in Bengaluru, with city-based developers using the JD model extensively initially. However, in the build-up to the RERA, which largely got implemented from July 1, 2017, the proportion of the JD launches started increasing, and the trend began spreading into other cities on a pan-India basis. As per report, Joint development launches across India were at 72 per cent in FY16, and then saw a high of 93 per cent in FY17, but declined to 71 per cent in FY18.

Besides, ICRA pointed out lack of clarity on the tax rate to be paid by a developer for provision of construction services, against which the TDR is received as a consideration, adding that clarity on these GST-related issues would be key for continued momentum in the joint development space, though ICRA expects it to continue as a preferred mode of development.

The CNX Nifty is currently trading at 10647.60, down by 132.95 points or 1.23% after trading in a range of 10630.95 and 10804.45. There were 11 stocks advancing against 38 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Zee Entertainment up by 15.99%, Bharti Infratel up by 2.59%, Coal India up by 2.24%, TCS up by 1.50% and Larsen & Toubro up by 1.11%. On the flip side, Adani Ports & SEZ down by 9.70%, Bajaj Finance down by 6.43%, Indiabulls Housing Finance down by 6.41%, Yes Bank down by 4.94% and ICICI Bank down by 4.82% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 124.56 points or 0.6% to 20,649.00, Jakarta Composite dropped 38.91 points or 0.60% to 6,443.93, Shanghai Composite declined 4.21 points or 0.16% to 2,597.51, Straits Times trembled 2.34 points or 0.07% to 3,199.91 and KOSPI was down by 0.43 points or 0.02% to 2,177.30. On the other side, Hang Seng increased 7.77 points or 0.03% to 27,576.96 and Taiwan Weighted was up by 43.72 points or 0.44% to 10,013.33.

All European markets were trading in red; France’s CAC fell 29.00 points or 0.59% to 4,896.82, Germany’s DAX declined 50.35 points or 0.45% to 11,231.44 and UK’s FTSE 100 was down by 31.66 points or 0.46 % to 6,777.56.