Benchmarks trade lower in early deals; Sensex slips below 35,650 mark

Indian markets made a cautious start and are trading with cut of over half a percent in early deals on Monday, despite positive trade in Asian peers. Besides, IT, auto and FMCG stocks were under pressure. Traders were concerned with the Federation of Indian Chambers of Commerce (Ficci) and the Indian Banks’ Association (IBA) survey stating that Liquidity is expected to remain constrained till the end of March owing to factors such as higher demand for money at the end of 2018-19, the upcoming Lok Sabha elections and advance tax outflow. The survey said higher fiscal deficit too will be a factor in constraining liquidity. It covered areas like current liquidity and suggestions to improve it and enhance credit growth. Investors are eyeing the Reserve Bank of India’s (RBI) board meeting. Finance Minister Arun Jaitley is scheduled to address the customary post-Budget meeting of the central board of the RBI later in the day, and highlight the key points of the interim Budget, including the fiscal consolidation roadmap. Meanwhile, the government is likely to retain the provident fund interest rate at 8.55% despite the decline in interest rates, benefitting over 60 million subscribers of the Employees’ Provident Fund Organisation (EPFO).

On the global front, all the Asian markets were trading higher as investors grow increasingly confident that China and the United States will eventually hammer out a deal to end their long-running trade war. Back home, on the sectoral front, sugar sector stocks were in focus with a ICRA’s report that the government's move to increase the minimum selling price of sugar will augur well for the mills and is expected to increase their operating profit margins by 6%. In scrip specific development, Yes Bank fell as much as 3% after report showed that the Reserve Bank of India (RBI) may impose monetary penalty on YES Bank for breaching the confidentiality norms of its communications exchange with the private bank which the central bank is said to be treating as a market-related information slip aimed at boosting the stock.

The BSE Sensex is currently trading at 35635.80, down by 173.15 points or 0.48% after trading in a range of 35607.65 and 35912.44. There were 10 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.51%, while Small cap index was down by 0.39%.

The top gaining sectoral indices on the BSE were Realty up by 1.15%, Utilities up by 0.59%, Power up by 0.58%, Metal up by 0.55% and PSU was up by 0.30%, while Consumer Durables down by 1.17%, Energy down by 1.01%, FMCG down by 1.00%, Auto down by 0.98% and IT was down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.20%, Vedanta up by 1.49%, Tata Steel up by 1.47%, ONGC up by 1.30% and Power Grid was up by 0.52%. On the flip side, Yes Bank down by 3.52%, HCL Tech down by 1.82%, Hindustan Unilever down by 1.75%, Bajaj Auto down by 1.66% and Bajaj Finance was down by 1.50% were the top losers.

Meanwhile, in order to boost outbound shipments, exporters body Federation of Indian Export Organisations (FIEO) has suggested a series of measures including outright exemption from Goods and Services Tax (GST), interest subsidy for agri-sector, and more funds for Micro, Small and Medium Enterprises (MSME) players. With increasing protectionism in several countries, FIEO President Ganesh Kumar Gupta said domestic exporters need incentives to increase shipments.

Gupta further said these support measures, if provided on time has the potential to take the country's exports to $375 billion in 2019-20 and create lakhs of jobs. This fiscal, they will cross $325 billion to $330 billion. Talking about GST, he said it is necessary that an outright exemption window may be provided to exporters as was in existence before the GST regime to mitigate the liquidity problem. Though, he also said the government has taken several measures to provide quick GST refunds to exporters, but due to one reason or the other, substantial GST refunds remain outstanding for long time causing acute liquidity problem which adversely affect our exports growth.

The FIEO president added that there is a good potential for agricultural produce in overseas markets and, for that there is a need to extend the interest subsidy scheme to the sector. Besides, he sought more funds for improving trade related infrastructure in states, incentives to promote shipments of value added branded products, steps to increase trade with neighbouring countries like Nepal and Bangaldesh, and benefits on sales to foreign tourists.

In order to reduce transaction time and cost simultaneously increasing competitiveness, he said there is a need to provide more facility to the MSME exporters in the forthcoming foreign trade policy particularly of non-fiscal nature and added that exemption from IGST under advance authorization scheme. Under this scheme, manufacturers are allowed to import inputs at zero duty but only for the export purposes. During the April-January period of the current fiscal, exports grew 9.52 per cent to $271.8 billion.

The CNX Nifty is currently trading at 10666.55, down by 57.85 points or 0.54% after trading in a range of 10665.25 and 10759.90. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.25%, Dr. Reddy’s Lab up by 2.20%, NTPC up by 2.06%, Vedanta up by 2.04% and Tata Steel was up by 1.82%. On the flip side, Yes Bank down by 3.40%, Bajaj Auto down by 1.98%, Bajaj Finserv down by 1.88%, Hindustan Unilever down by 1.84% and Bajaj Finance was down by 1.76% were the top losers.

All Asian markets were trading in green; Hang Seng increased 421.90 points or 1.51% to 28,322.74, Jakarta Composite soared 75.25 points or 1.18% to 6,464.34, Nikkei 225 surged 374.03 points or 1.79% to 21,274.66, Taiwan Weighted strengthened 80.66 points or 0.8% to 10,145.44, Shanghai Composite gained 47.88 points or 1.78% to 2,730.27, Straits Times advanced 24.50 points or 0.76% to 3,264.24 and KOSPI was up by 12.11 points or 0.55% to 2,208.20.