Post Session: Quick Review

Indian equity benchmarks ended in red for second-straight session, on signs of escalating tensions between India and Pakistan. Markets started the day on optimistic note and traded in fine fettle, as traders took encouragement with the Reserve Bank of India (RBI) stating that it would infuse Rs 12,500 crore into the system through open market operations. The decision on OMO is based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward. The sentiment was also supported by a report that consumer market is expected to grow at 12 percent annually over the next decade and touch Rs 335 lakh crore. The consumer market was around Rs 110 lakh crore in 2018, clipping past 13 percent annually in the past decade when it stood at Rs 31 lakh crore in 2008.

However, in afternoon trade, markets slipped from the day's high, as traders turned pessimistic with the government data showing that fiscal deficit touched 121.5 percent of the full-year revised target of Rs 6.34 lakh crore at the end of January on account of lower revenue collections. The fiscal deficit, or the gap between the government's expenditure and revenue, stood at Rs 7.70 lakh crore during April-January of the current financial year ending March. At the end of January 2018, the deficit was 113.7 percent of the Revised Estimate (RE). Some pessimism also spread among the investors with the government detected Rs 20,000 crore worth GST evasion so far this fiscal and will take more steps to check frauds and increase compliance. But, the markets managed to trim some losses in dying hour of trade as traders found some solace with a private report that the government is likely to transfer Rs 2,000 each to at least 10 million more farmers, carrying forward the PM-KISAN scheme that Prime Minister Narendra Modi has launched.

On the global front, Asian markets ended mixed on Wednesday, while European markets were trading in red, ahead of a meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un in Vietnam. Back home, steel sector were in focus with ratings agency ICRA stating that the steel sector has turned out to be one of the major beneficiaries of the Insolvency and Bankruptcy Code (IBC). Out of the 40 large defaulting accounts identified by the RBI in 2017, 11 entities belonged to the steel sector. Also, power industry stock were in focus, as Power Minister R K Singh stated that India will achieve 100 per cent household electrification by March 31 as envisaged in the Saubhagya scheme and the next goal is to achieve round the clock power supply to all households.

The BSE Sensex ended at 35906.42, down by 67.29 points or 0.19% after trading in a range of 35735.33 and 36371.11. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.36%, while Small cap index was up by 0.17%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.03%, Basic Materials up by 0.44%, Industrials up by 0.42%, Healthcare up by 0.32% and Auto up by 0.24%, while Consumer Durables down by 0.57%, Metal down by 0.53%, Power down by 0.49%, Bankex down by 0.45% and Telecom down by 0.44% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 1.74%, Sun Pharma up by 1.65%, Bharti Airtel up by 1.59%, Larsen & Toubro up by 1.51% and TCS up by 1.11%. (Provisional)

On the flip side, Tata Motors down by 3.45%, Tata Motors - DVR down by 3.09%, Vedanta down by 2.95%, Kotak Mahindra Bank down by 1.64% and Hindustan Unilever down by 1.64% were the top losers. (Provisional)

Meanwhile, with lower revenue collections, the Controller General of Accounts (CGA) in its latest data showed that the central government’s fiscal deficit has widened and touched 121.5% of the full-year revised target of Rs 6.34 lakh crore at the end of January. The fiscal deficit, or the gap between the government's expenditure and revenue, stood at Rs 7.70 lakh crore during April-January of the current financial year ending March. At the end of January 2018, the deficit was 113.7% of the Revised Estimate (RE).

As per the CGA data, the revenue receipts of the government totalled Rs 11.81 lakh crore or 68.3% of RE till January in 2018-19, compared with 72.8% during the same period last fiscal. The government expects to mop up revenue of Rs 17.29 lakh crore during the current fiscal, from Rs 17.25 lakh crore budgeted originally. Tax revenue was 68.7% of RE, compared with 76.5% in the comparable period of the previous year.  On the expenditure front, the data showed that the total expenditure of the government at January-end was Rs 20.01 lakh crore or 81.5% of RE. The total expenditure for the current fiscal has been raised to Rs 24.57 lakh crore in the RE, from the budgeted Rs 24.42 lakh crore.

The government had budgeted to cut the fiscal deficit to 3.3% of Gross Domestic Product (GDP) or Rs 6.24 lakh crore in 2018-19, from 3.53% in the previous financial year. However, the fiscal deficit was revised upwards marginally to 3.4% of GDP or over Rs 6.34 lakh crore in the Interim Budget 2019-20, on account of additional outlay of Rs 20,000 crore for funding income scheme for small farmers.

The CNX Nifty ended at 10800.35, down by 34.95 points or 0.32% after trading in a range of 10751.20 and 10939.70. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 2.77%, Bharti Airtel up by 1.90%, UPL up by 1.75%, Bajaj Auto up by 1.63% and Larsen & Toubro up by 1.58%. (Provisional)

On the flip side, Bharti Infratel down by 3.96%, Wipro down by 3.20%, Tata Motors down by 3.12%, Vedanta down by 2.80% and Titan Co down by 2.11% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 53.22 points or 0.74% to 7,097.90, France’s CAC dropped 19.87 points or 0.38% to 5,218.85 and Germany’s DAX was down by 89.22 points or 0.77% to 11,451.57.

Asian markets ended mixed on Wednesday as investors welcomed dovish comments on monetary policy from the US Federal Reserve and eagerly looked forward to the second summit between US President Donald Trump and North Korean leader Kim Jong Un in Vietnam later in the day. Chinese shares ended higher after Fed Chair Powell reiterated the US central bank would stay patient on monetary policy in the face of a slowing economy. Further, Japanese shares ended higher as gains in the defensive sector offset profit taking in China-related stocks. Meanwhile, Taiwan shares was marginally lower after a government report showed Taiwan's industrial production fell for a second straight month in January.