Post Session: Quick Review

Benchmark indices erased all their intraday gains and ended Wednesday’s session on pessimistic note, on the back of last hour selling pressure. The day began on a positive note, supported by positive macroeconomic data and better-than-expected earnings by some blue-chip companies, amid positive global cues. The Central Statistics Office’s (CSO) data showed that India's Consumer Price Index (CPI)-based inflation for the month of January 2019 eased to a 19-month low at 2.05% over the previous month on continued decline in food prices, including vegetables and eggs, while industrial production in December 2018 bounced back to 2.4% after sliding to a 17-month low in November. Buying further crept in with a report that outstanding indirect tax payable rose by over 37% between FY16 and FY19 (up to December) but the recoverable direct tax payable went up by over 47% during the same period.

Markets hold positive momentum in the afternoon session, taking support from Finance Minister Piyush Goyal’s statement that now individuals earning up to Rs 9.5 lakh can escape liability by taking advantage of saving schemes. The Minister said he did not propose any change in the tax rate but only provided few rebates which will boost spending and help the economy. Adding to optimism, reports said that the Cabinet is expected to soon consider a proposal of FDI-linked relaxation for mandatory 30 per cent local sourcing norms for foreign single brand retailers by allowing them more time to comply with regulations. The commerce and industry ministry has already circulated a draft cabinet note seeking views of different ministries including the department of economic affairs on the proposal.

However, benchmarks failed to sustain early gains and slipped into red terrain in late trade, as traders turned cautious after the Comptroller and Auditor General (CAG) pointed out irregularities in the way part of goods and services tax (GST) revenue was transferred to states in 2017-18. It said the devolution of Integrated GST (IGST), which is collected on the inter-state supply of goods and services and imports, to states did not happen according to provisions of the law. Traders also took note of the Minister of State for Micro, Small and Medium Enterprises (MSMEs) Giriraj Singh’s statement that there is need for financial inclusion of small entrepreneurs, underlying that without whom the country cannot develop.

On the global front, Asian markets ended mostly in green on Wednesday, while European markets were trading in green, amid renewed optimism the world's two largest economies might be able to resolve their long-running trade dispute. Back home, port sector stocks were in focus with report that major ports of the country together handled 578.86 Million Tonnes (MT) of cargo during April-January 2019, representing a growth of 3.11%.

The BSE Sensex ended at 35984.89, down by 168.73 points or 0.47% after trading in a range of 35962.68 and 36375.80. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.58%, while Small cap index was down by 0.45%.(Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.51%, TECK up by 0.36% and Realty up by 0.18%, while Oil & Gas down by 2.22%, PSU down by 2.22%, Capital Goods down by 1.87%, Energy down by 1.79% and Consumer Durables down by 1.40% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 1.98%, HDFC up by 0.92%, HCL Tech. up by 0.82%, Infosys up by 0.61% and TCS up by 0.41%. (Provisional)

On the flip side, ONGC down by 2.95%, SBI down by 2.90%, Power Grid down by 2.51%, Yes Bank down by 2.35% and Larsen & Toubro down by 2.24% were the top losers. (Provisional)

Meanwhile, highlighting tax relief to the middle class, Finance Minister Piyush Goyal has said that now individuals earning up to Rs 9.5 lakh can escape liability by taking advantage of saving schemes. He also said that the proposal to raise standard deduction from Rs 40,000 to Rs 50,000 and hiking Tax Deducted at Source (TDS) limit on interest income from Rs 10,000 to Rs 40,000 will provide relief to senior citizens.

The Minister said he did not propose any change in the tax rate but only provided few rebates which will boost spending and help the economy.  The Finance Bill, which contains tax proposals, was passed by the Lok Sabha with voice vote, completing the budgetary process in the lower house. He mentioned  ‘the concessions proposed in the Finance Bill are aimed at helping poor and middle class people living on tight budget...This is interim budget. We have not brought any tax proposal...we will bring them in July.’

Besides, he noted that the government during the last four- and-a-half years tried to benefit every section of society and tax payers. Accordingly, the tax base in the country increased, the tax collection had doubled in the last five years and India has become the fastest growing major economy in the world. He also said higher collections enabled the government to earmark more resources for the socially and economically deprived sections of the society.

The CNX Nifty ended at 10776.75, down by 54.65 points or 0.50% after trading in a range of 10772.10 and 10891.65. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports &SEZ up by 4.35%, Indiabulls Housing Finance up by 3.52%, UPL up by 2.45%, Tata Motors up by 2.14% and HDFC up by 1.22%. (Provisional)

On the flip side, Eicher Motors down by 5.00%, Indian Oil Corp. down by 3.78%, HPCL down by 3.76%, GAIL India down by 3.27% and ONGC down by 2.91% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 30.98 points or 0.43% to 7,164.12, France’s CAC added 13.51 points or 0.27% to 5,069.86 and Germany’s DAX was up by 18.57 points or 0.17% to 11,144.65.

Asian markets ended mostly in green on optimism the United States and China might be able to hammer out a deal to resolve their nearly year-long trade dispute. US President Donald Trump said that he could see letting the March 1 deadline for reaching a trade agreement with China slide a little if the two sides were close to a complete deal. Officials in Washington and Beijing had expressed hopes that a new round of talks which began this week would bring them nearer to easing their seven-month trade war. Seoul and Japanese stocks extended gains for a third straight session amid easing trade tensions. On the economic front, the Bank of Japan said that producer prices in Japan were down 0.6 percent on month in January, unchanged from the December reading but well shy of expectations for a decline of 0.2 percent. Export prices were down 2.5 percent on month and 3.3 percent on year, the bank said, while import prices sank 5.0 percent on month and 1.6 percent on year.