Local equities continue to trade flat with negative bias

Local equity benchmarks were trading flat with negative bias in morning session, tailing soft global cues. Consumer Durables, IT, and TECK counters witnessed notable losses, while Realty, Metal and Industrials sectors edged higher. Some cautiousness came with the International Monetary Fund’s (IMF) report that it trimmed its economic growth forecasts for India by 20 basis points (bps) each from its January predictions to 7.3% for FY20 and 7.5% for the next fiscal. Citing persistent risks from the trade war, it also lowered 2019 global growth forecast by 20 bps to 3.3%. Investors remained on sidelines with a private report that President Donald Trump is sending a clear message to the economic policy that: ‘My trade wars aren’t finished yet and a weakening global economy will just have to deal with it’. Traders also remain concerned with the finance ministry’s statement that the government has fallen short of Rs 50,000 crore in its direct tax collection target of Rs 12 lakh crore for 2018-19.

On the global front, Asian markets were trading mostly in red, as the possibility of a US-EU trade war shifted into focus after Washington's tariffs threat, while traders are also spooked by BREXIT uncertainty. Back home, US Trade Representative’s 2019 National Trade Estimate Report on Foreign Trade Barriers stated that India’s data localisation norms and draft e-commerce policy terming certain proposals as ‘most discriminatory and trade-distortive’. India has recently promulgated a number of data localisation requirements that would serve as significant barriers to digital trade between the US and India.

The BSE Sensex is currently trading at 38936.17, down by 3.05 points or 0.01% after trading in a range of 38851.77 and 38950.45. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.25%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 2.73%, Industrials up by 0.48%, Metal up by 0.47%, Energy up by 0.46% and Healthcare was up by 0.43%, while Consumer Durables down by 0.33%, IT down by 0.32%, TECK down by 0.26% and Utilities was down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.62%, Tata Motors up by 2.50%, Coal India up by 1.28%, Kotak Mahindra Bank up by 1.04% and ONGC was up by 0.98%. On the flip side, TCS down by 1.44%, Hero MotoCorp down by 1.00%, Maruti Suzuki down by 0.81%, HCL Tech down by 0.77% and HDFC was down by 0.67% were the top losers.

Meanwhile, with help of expenditure savings and other measures including the rollover of the fuel subsidy, the government has managed to meet the revised fiscal deficit target of 3.4 per cent of the Gross domestic product (GDP). The government in its interim Budget in February had revised upward the fiscal deficit target to 3.4 per cent from 3.3 per cent of GDP estimated earlier for Financial year 2019 (FY19).

The government met revised fiscal deficit target mainly on account of cut last minute expenditure and rolled over fuel subsidies. Accordingly, the shortfall in tax collection has been matched. There has also been some increase in non-tax revenue collection, especially on account of disinvestment proceeds.

Besides, about Rs 25,000-30,000 crore worth of subsidies due to PSU oil companies for selling LPG and kerosene oil below the cost during FY19 have been rolled over and will now be paid in the current fiscal. Finance Secretary Subhash Chandra Garg recently said the government is close to meeting fiscal deficit target of 3.4 per cent for FY19.

The CNX Nifty is currently trading at 11669.15, down by 2.80 points or 0.02% after trading in a range of 11638.65 and 11680.05. There were 27 stocks advancing against 22 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 2.96%, Tata Motors up by 2.50%, Wipro up by 1.70%, Dr. Reddy’s Lab up by 1.35% and Coal was India up by 1.28%. On the flip side, TCS down by 1.69%, GAIL India down by 1.16%, Titan Company down by 1.06%, Hero MotoCorp down by 1.02% and HDFC was down by 0.78% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 138.84 points or 0.64% to 21,663.75, Hang Seng decreased 114.14 points or 0.38% to 30,043.35, Jakarta Composite dropped 25.03 points or 0.39% to 6,459.32, Taiwan Weighted dropped 13.13 points or 0.12% to 10,838.47 and Shanghai Composite was down by 12.73 points or 0.39% to 3,226.93.

On the other hand; Straits Times advanced 2.01 points or 0.06% to 3,327.61 and KOSPI was up by 3.89 points or 0.18% to 2,217.45.