Sensex, Nifty close lower on Monday

Indian equities ended Monday’s trading session on negative note, with Sensex and Nifty losing over 160 and 60 points, respectively. The markets made a slightly higher start of the day, aided by Finance Minister Arun Jaitley’s statement that India is expected to become the third largest economy in the world by 2030 with GDP touching $10 trillion, helped by consumption and investment growth. Currently, the size of the Indian economy is about $2.9 trillion. Talking about avenues of growth for the next 20 years, the finance minister listed infrastructure creation, rural expansion and gender parity, among others. Adding some support, World Bank Chief Economist for the South Asia Region, Hans Timmer said that India’s economic growth in recent years has been too much driven by domestic demand and its exports were about one third of its potential.

However, key equity indices soon turned volatile to settle the session in red terrain, on the back of mixed cues from global markets. Domestic sentiments also got impacted with a ratings agency’s latest report that Indian IT majors hit due to H1-B visa restrictions. It said that Restrictions on the H1-B visas by the US have compelled Indian tech companies to hire more locally and led to an escalation in employee costs. Market participants also remained on sidelines ahead March-quarter corporate earnings along with inflation data due to release on April 12. Investors took a note of Commerce and Industry Minister Suresh Prabhu’s statement that there is a need to develop a proper matrix to understand changes in the Indian economy and job creation that is happening at a rapid pace. He also stated that the relation between employment generation to Gross Domestic Product (GDP) will always undergo a change depending upon the profile of the economy.

On the global front, European markets were trading in red, as Germany's exports and imports declined more-than-expected in February at the fastest pace in a year, as demand ebbed amid the global uncertainties, adding to concerns sparked by recent data that growth in the biggest economy in the euro area remained sluggish in the first quarter. As per preliminary figures from the Federal Statistical Office, Exports fell a calendar and seasonally-adjusted 1.3 percent month-on-month. Besides, Norway's industrial production decline slowed in February. The figures from the Statistics Norway showed that industrial production fell 1.8 percent month-on-month in February, after a 2.2 percent decline in January. Asian markets ended mixed, as investors watched Brexit developments and look for progress in US-China trade talks.

Back home, auto stocks ended lower, as the data released by the Society of Indian Automobile Manufacturers (SIAM) showed that domestic passenger vehicle (PV) sales declined by 2.96 percent to 2,91,806 units in March 2019 from 3,00,722 units in the year-ago month. Further, aviation stocks remained in focus, with Civil Aviation Minister Suresh Prabhu’s statement that aviation turbine fuel (ATF) should be brought under the Goods and Services Tax (GST) regime as it will ensure a level playing field for the domestic airline industry. He said input costs should be competitive for any sector and the ministry has been of the strong view that the fuel should be brought under the GST regime.

Finally, the BSE Sensex slipped 161.70 points or 0.42% to 38,700.53, while the CNX Nifty was down by 61.45 points or 0.53% to 11,604.50.

The BSE Sensex touched a high and a low of 39,041.25 and 38,520.96, respectively and there were 10 stocks advancing against 21 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.72%, while Small cap index was down by 0.39%.

The top gaining sectoral indices on the BSE were IT up by 0.97%, TECK up by 0.77%, Power up by 0.40%, Capital Goods up by 0.02% and Utilities up by 0.02%, while Realty down by 2.33%, Energy down by 1.69%, Oil & Gas down by 1.48%, PSU down by 0.95% and Metal down by 0.89% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.44%, Mahindra & Mahindra up by 1.07%, ONGC up by 1.05%, TCS up by 0.89% and NTPC up by 0.74%. On the flip side, Yes Bank down by 2.66%, Bajaj Finance down by 2.57%, Vedanta down by 2.51%, Tata Motors down by 2.48% and Tata Motors - DVR down by 2.34% were the top losers.

Meanwhile, ratings agency Crisil in its latest report has said that electric two-wheeler segment would be impacted the most in the initial phase of the 'Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India' (FAME-II) scheme with the exclusion of lead acid battery-powered such vehicles. It estimated that more than 95 percent of the electric two-wheeler models being produced now won’t be eligible for the incentive under FAME-II. It found that about 90 percent of the vehicles that availed of incentives under the FAME I scheme, which was operational between April 1, 2015, and March 31, 2019, were electric scooters.

According to the report, the phase two of FAME scheme, which is effective from April 1, will be implemented over a period of three years with a Rs 10,000 crore outlay, and will be applicable to vehicles with 'advanced batteries' (excluding lead acid ones). It noted that FAME-II continues to exclude lead acid battery-powered two-wheelers. Additionally, as per the latest eligibility criteria, it said that e-scooters ought to have a minimum range of 80 km per charge and minimum top speed of 40 kmph, along with riders on energy consumption efficiency, minimum acceleration and higher number of charging cycles. It observed that this further excludes more than 90 percent of the remaining lithium-ion battery-driven models from the subsidy.

Crisil further stated that earlier, the incentive for lithium ion battery-based two-wheelers stood at Rs 17,000 or Rs 22,000, based on the fuel savings potential and irrespective of the size of the battery. It also said that FAME-II has linked the demand incentive to the size of the battery, with the government providing Rs 10,000 per kWh of battery used for a two-wheeler. Besides, it stated that about 85 percent of the outlay would be as a demand incentive applicable to buses, passenger vehicles and three-wheelers registered for commercial usage and public transport, along with privately owned two-wheelers. 

The CNX Nifty traded in a range of 11,710.30 and 11,549.10. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.45%, Infosys up by 1.30%, Mahindra & Mahindra up by 1.28%, TCS up by 1.24% and Power Grid up by 0.82%. On the flip side, Indiabulls Housing Finance down by 4.76%, Indian Oil Corporation down by 4.01%, Bajaj Finance down by 2.99%, Vedanta down by 2.69% and Yes Bank down by 2.30% were the top losers.

European markets were trading in red; UK’s FTSE 100 fell 13.75 points or 0.18% to 7,433.12, France’s CAC declined 4.04 points or 0.07% to 5,472.16 and Germany’s DAX was down by 50.08 points or 0.42% to 11,959.67.

Asian markets ended mixed on Monday due to stronger-than-expected US jobs growth data as well as signs of progress in US-China trade talks helped ease concerns about the global economy. Non-farm payroll employment jumped by 196,000 jobs in March after edging up by a revised 33,000 jobs in February, though wage increases slowed in the month. Chinese shares ended on a flat note on hopes for more policy easing and amid optimism over ongoing trade talks with Washington. Hong Kong shares ended up after Chinese official broadcaster CCTV reported that there was ‘new progress’ in trade talks that concluded in Washington on Friday. Meanwhile, Japanese shares closed down as investors braced for the upcoming corporate earnings season.