Post Session: Quick Review

Monday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered gains of over a percent on the back of widespread buying by participants. Trading for the week began on upbeat note, as local investors cheered with Economic Affairs Secretary Subhash Chandra Garg expressing confidence that fiscal deficit target of 3.4 per cent for 2018-19 would be met as shortfall in indirect tax collection would be compensated by lower expenditure. The mood remained upbeat with Commerce and Industry minister Suresh Prabhu’s statement that the government has set a target of attracting $100 billion in foreign direct investments over the next two years. The minister said the government is conducting a sector analysis for FDI investments and is preparing suitable policies which will help in bringing foreign funds.

Barometers continued their rally to reach at fresh intraday high points in last leg of trade, taking support from a report stated that Finance Ministry is working out a mechanism under which CPSEs will have to part with a portion of the proceeds of non-core asset sales as dividend to the exchequer. Local sentiments also got buttressed with private report indicating that led by IT industry, hiring activity picked up in February 2019, seeing a 16 percent uptake from a year ago. Traders also took a note of Railways Minister Piyush Goyal’s statement that the government has brought sustainable changes instead of temporary adjustments. He also said that the government took the fruits of progress to under-developed parts of the country, further highlighting that the country has become perhaps the fastest growing economy in the world from a fragile economy. 

On the global front, Asian markets ended on a mixed note on Monday, as investors remained cautious over a possible global economic slowdown after important data in the United States and China missed expectations last week. European markets were trading in green, as traders looked ahead to a crucial vote in the U.K. that will determine whether the country’s Brexit deal will be approved. Back home, stocks related to banking sector ended higher despite the Reserve Bank of India’s statement that it has imposed penalties worth Rs 71 crore on 36 public, private and foreign banks for non-compliance with various directions on time-bound implementation and strengthening of SWIFT operations. Auto sector stocks too ended higher with report that from April, up to 10 lakh electric two-wheelers will get subsidy of Rs 20,000 each, while 35,000 fully electric cars can avail benefit of Rs 1.5 lakh under the newly notified FAME-II scheme, reducing their prices for buyers.

The BSE Sensex ended at 37068.80, up by 397.37 points or 1.08% after trading in a range of 36726.39 and 37087.43. There were 26 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index surged 1.98%, while Small cap index was up by 1.61%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 5.51%, Energy up by 3.31%, Oil & Gas up by 2.98%, Consumer Durables up by 2.63% and Metal up by 2.51%, while IT down by 0.04% was the only losing index on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 8.06%, Coal India up by 3.88%, Power Grid up by 3.82%, Reliance Industries up by 3.43% and Tata Steel up by 2.55%. (Provisional)

On the flip side, NTPC down by 0.92%, TCS down by 0.46%, HCL Tech. down by 0.34%, Indusind Bank down by 0.21% and Infosys down by 0.11% were the top losers. (Provisional)

Meanwhile, expressing confidence over meeting fiscal deficit target, Economic Affairs Secretary Subhash Chandra Garg has said that fiscal deficit target of 3.4 per cent for 2018-19 (FY19) would be met as shortfall in indirect tax collection would be compensated by lower expenditure. As per the interim Budget 2019-20, the government has pegged fiscal deficit target of 3.4 per cent for the current fiscal year ending March 31.

He said ‘our assessment at this stage is, in direct taxes, we will probably do as per the revised estimate, in indirect taxes, there might be some shortfall, and on the expenditure side there might be some savings. On the whole, we should be where we are.’ On the growth front, Garg said India cannot grow at 7-8 per cent without the growth of private equity (PE) and venture capital (VC) industry.

In the current fiscal, direct tax collection is pegged at Rs 12 lakh crore (revised estimate). The government had originally budgeted to collect Rs 11.50 lakh crore in 2018-19 from direct taxes, which include corporate tax and personal income tax. Likewise, in 2018-19, GST collection is pegged at Rs 6.43 lakh crore (RE), which is lower than the targeted Rs 7.43 lakh crore (BE).

On the indirect tax front, customs collection in the current fiscal is pegged at Rs 1.30 lakh crore (RE). Besides, the data released by the Controller General of Accounts (CGA) showed that fiscal deficit touched 121.5 per cent of the full-year revised target of Rs 6.34 lakh crore at the end of January on account of lower revenue collection.

The CNX Nifty ended at 11174.70, up by 139.30 points or 1.26% after trading in a range of 11059.85 and 11175.50. There were 43 stocks advancing against 7 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 8.20%, HPCL up by 5.58%, BPCL up by 5.34%, Eicher Motors up by 4.30% and Bharti Infratel up by 4.24%. (Provisional)

On the flip side, NTPC down by 1.25%, Tech Mahindra down by 0.54%, Zee Entertainment down by 0.46%, HCL Tech. down by 0.43% and TCS down by 0.35% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 71.18 points or 1% to 7,175.49, France’s CAC added 1.30 points or 0.02% to 5,232.52 and Germany’s DAX was up by 11.52 points or 0.1% to 11,469.36.

Asian markets ended on a mixed note on Monday as global growth worries offset hopes for policy support from China. US job growth almost halted in February and new bank loans in China fell sharply last month, adding to concerns over cooling global growth. Investors also awaited a crucial vote on UK Prime Minister Theresa May's revised Brexit deal on Tuesday for directional cues. Chinese shares ended higher after central bank governor Yi Gang said Beijing would not use the yuan exchange rate as a tool to boost exports or ease trade frictions. Meanwhile, Japanese shares bounced back from four days of losses as investors looked ahead to the Bank of Japan (BoJ) policy meeting on March 14-15.