Local equities continue to trade in red zone

Local equity benchmarks trimmed some of their losses in morning session, but continue to trade in red trajectory. Barring Power index, there was selling across all sectoral indices. A level of pressure was seen on frontline stocks, especially Bharti Airtel and NTPC. Indices cut some losses as traders took support with Reserve Bank of India (RBI) report which showed that India’s foreign exchange reserves increased by $3.6 billion to $405.64 billion as on March 15. In the previous week, the reserves had increased by $258.8 million to $401.776 billion. Some comfort also came with Finance Minister Arun Jaitley’s statement that the government has exceeded its disinvestment target for the current fiscal by Rs 5,000 crore, taking the total proceeds to Rs 85,000 crore. Besides, the government is expecting to cross 1 crore enrolments by April-end under the Pradhan Mantri Shram-Yogi Maandhan (PMSYM) Yojna - a pension scheme for unorganised sector workers. However, sentiments remained pessimistic ahead of the fiscal deficit and infrastructure output data for the month of February are slated for a release later in the week.

On the global front, all Asian markets were trading in red, after disappointing economic data from Europe and a closely-watched signal of potential recession in the US appeared on Friday. Back home, a private report indicated that housing prices rose by a modest 7% in seven major cities during the past five years, while sales and new supply have declined 28% and 64%, respectively.

The BSE Sensex is currently trading at 37855.42, down by 309.19 points or 0.81% after trading in a range of 37783.35 and 38016.76. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.71%, while Small cap index was down by 0.76%.

The only gaining sectoral index on the BSE was Power up by 0.02%, while Metal down by 1.67%, Realty down by 1.23%, Basic Materials down by 1.21%, BANKEX down by 1.09% and FMCG was down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 0.89%, NTPC up by 0.45%, Bajaj Auto up by 0.21%, Maruti Suzuki up by 0.17% and Coal India up by 0.15%. On the flip side, Vedanta down by 2.16%, SBI down by 1.78%, Tata Motors down by 1.68%, Kotak Mahindra Bank down by 1.46% and Tata Steel was down by 1.46% were the top losers.

Meanwhile, with an aim to give relief to exporters, the government has extended Integrated Goods and Service Tax (IGST) and compensation cess exemptions for goods procurement under certain export promotion schemes till March 2020.  These exemptions have been extended for exporters buying inputs domestically or importing for export purposes under export oriented unit (EOU) scheme, Export Promotion Capital Goods (EPCG) scheme and advance authorisation.

The move is aimed at giving relief to exporters as they do not have to pay IGST at the initial point itself. In the GST regime, they have to pay the indirect tax and then seek refund, which is a cumbersome process. The Directorate General of Foreign Trade (DGFT) has said that exemption from IGST and compensation cess under advance authorisation scheme, EOU, and EPCG scheme of foreign trade policy 2015-20 is extended up to March 31, 2020.

Besides, exports grew 8.85% to $298.47 billion, while imports rose by 9.75% to $464 billion during April-February of the current fiscal year. The trade deficit has widened to $165.52 billion during the 11 months of the current fiscal from $148.55 billion compared to the year-ago period. EPCG is an export promotion scheme under which an exporter can import certain amount of capital goods at zero duty for upgrading technology related with exports. On the other hand, advance authorisation is issued to allow duty free import of inputs, which is physically incorporated in export product.

The CNX Nifty is currently trading at 11364.30, down by 92.60 points or 0.81% after trading in a range of 11342.90 and 11395.65. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were HPCL up by 1.30%, Indian Oil Corporation up by 1.02%, Dr. Reddy’s Lab up by 0.98%, BPCL up by 0.78% and Tech Mahindra up by 0.72%. On the flip side, Hindalco down by 2.63%, Bharti Infratel down by 2.39%, Indiabulls Housing Finance down by 2.37%, JSW Steel down by 2.36% and Vedanta was down by 2.07% were the top losers.

All Asian markets were trading in red; Nikkei 225 slipped 664.05 points or 3.07% to 20,963.29, Hang Seng decreased 510.17 points or 1.75% to 28,603.19, Taiwan Weighted dropped 173.68 points or 1.63% to 10,465.39, Jakarta Composite dropped 103.08 points or 1.58% to 6,422.19, Straits Times trembled 45.72 points or 1.42% to 3,166.38, Shanghai Composite declined 42.50 points or 1.37% to 3,061.65 and KOSPI was down by 38.95 points or 1.78% to 2,148.00.