Benchmarks trade lower in early deals

Indian Equity benchmarks made a cautious start and are trading slightly in red in early deals ahead to the six-member Monetary Policy Committee (MPC) headed by Reserve Bank of Indian (RBI) Governor Shaktikanta Das three-day meet to be start on February 05 and announce the policy on February 07. Traders remained cautious with the government data showing that fiscal deficit touched 112.4% of the full-year budget target of Rs 6.24 lakh crore at the end of December on account of lower revenue collections. The fiscal deficit, or gap between Government's expenditure and revenue, stood at Rs 7.01 lakh crore during April-December of the current financial year which ends in March. Traders took note of a SBI research report stating that the RBI may cut key lending rate by 0.25 percent later this week in view of benign inflation. They expect RBI to change its stance in February, but it is likely to remain on a pause mode.

On the global front, The Japanese stock market is trading in red at this point of time, while most of the other Asian markets are closed for the Lunar New Year holiday. The US markets rose on Monday, led by the technology sector, as investors awaited another busy week of corporate earnings reports and economic data.

Back home, telecom sector stocks edged lower despite report that telecom firms, barring Reliance Jio, have asked the government to waive GST on spectrum payments and other levies, while adjusting accumulated tax credits of Rs 35,000 crore in the pending payments. Sugar industry stocks remained buzzing with Indian Sugar Mills Association (ISMA) stating that sugar production rose 8% to 185 lakh tonnes in the first four months of this marketing year ending September, while cautioning that cane arrears to farmers could reach very uncomfortable levels.

The BSE Sensex is currently trading at 36536.13, down by 46.61 points or 0.13% after trading in a range of 36495.83 and 36653.17. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.03%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.62%, Auto up by 0.43%, Healthcare up by 0.37%, Consumer Disc up by 0.27% and Utilities was up by 0.21%, while Telecom down by 3.07%, TECK down by 0.78%, IT down by 0.57%, Realty down by 0.32% and Metal was down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.57%, Mahindra & Mahindra up by 1.29%, Power Grid Corporation up by 1.11%, Yes Bank up by 1.06% and Bajaj Finance up by 1.00%. On the flip side, Bharti Airtel down by 3.93%, Tata Motors down by 1.61%, Tata Motors - DVR down by 1.18%, Infosys down by 0.79% and Tata Steel down by 0.68% were the top losers.

Meanwhile, rising concerns over state of financial position of the country, fiscal deficit or gap between Government's expenditure and revenue exceeded to Rs 7.01 lakh crore during April-December of the current financial year (FY19) and touched 112.4% of the full-year Budget Estimate (BE) of Rs 6.24 lakh crore on the back of lower revenue collections. Besides, at the end of December 2017, the deficit was 113.6% of the BE.

The Controller General of Accounts (CGA) data showed that the revenue receipts of the government totalled Rs 10.84 lakh crore or 62.8% of BE in 2018-19 till December, compared with 66.9% during the same period last year. The government has budgeted revenue mop up of Rs 17.25 lakh crore in FY19. The figure has been revised upwards to over Rs 17.29 lakh crore in the Interim Budget 2019-20.

Besides, tax revenue was 63.2% of BE, compared with 73.4% in the comparable period of the previous year. The total expenditure of the government at December-end was Rs 18.32 lakh crore or 75% of BE. The total expenditure for current fiscal has been raised to Rs 24.57 lakh crore in the Revised Estimates, from the budgeted Rs 24.42 lakh crore.

The government has budgeted to cut the fiscal deficit to 3.3% of GDP or Rs 6.24 lakh crore in 2018-19, from 3.53% in the previous financial year. In the interim budget for 2019-20, the fiscal deficit was revised upwards marginally to 3.4% of GDP or over Rs 6.34 lakh crore, on account of additional outlay of Rs 20,000 crore for funding income scheme for small farmers.

The CNX Nifty is currently trading at 10897.25, down by 15.00 points or 0.14% after trading in a range of 10886.70 and 10928.90. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 3.65%, Zee Entertainment up by 2.42%, Titan Co up by 2.03%, Indusind Bank up by 1.31% and Bajaj Auto up by 1.23%. On the flip side, Bharti Airtel down by 3.93%, Bharti Infratel down by 1.83%, Tata Motors down by 1.64%, Indiabulls Housing down by 1.55% and Wipro down by 1.16% were the top losers.

Several markets in Asia are closed for the Lunar New Year holidays. Nikkei 225 was down by 8.69 points or 0.04% to 20,875.08.