Markets end near day’s low points

Indian bourses ended Thursday’s session near their day’s low points. After a cautious start, the markets traded firmly for the most part of the day, amid reports that giving relief to composition scheme taxpayers under the GST, the Finance Ministry has allowed such businesses to file self-assessed tax return on quarterly basis in a simplified form. In yet another simplification, the Goods and Services Tax (GST) Council has added flexibility into the way a company can utilise the available input tax credit. Any company would now be eligible to use credit available against paid integrated GST (IGST) to set off tax liabilities of state GST (SGST) and central GST (CGST) in any proportion and in any order. Traders also remained positive, as the Finance Ministry introduced several changes in the electronic way or e-way bill system, ranging from auto calculation of distance based on PIN codes for generation of e-way bill to barring businesses from generating multiple e-way bills based on one invoice, as it seeks to cracks down evasion in the GST framework.

However, in the last hours of the trade, key indices failed to hold their heads in green terrain and turned negative to end the trading session in red terrain, on the account of weak cues from global markets. Trading sentiments worsened amid a private report stating that Indians are becoming increasingly worried about the economy's condition, with fewer citizens believing that the local economy is getting better. Adding more worries among market participants, the World Bank forecasted slowdown in East Asia and Pacific economies in 2019. Growth of East Asia and the Pacific (EAP) will remain at 6.0 per cent in 2019, which is down from 6.3 per cent in 2018. Different factors marred slow growth in major economies which suffered due to economic policies.

On the global front, European markets were trading in red, after Austria's production growth slowed in February. The data from Statistics Austria showed that the production index that combines both industry and construction climbed 5.9 percent year-on-year in February, after a 6.7 percent increase in January. Industrial production grew 5.1 percent annually and construction output rose by 9.3 percent in February. Asian markets ended in red, as South Korea's gross domestic product was down a seasonally adjusted 0.3 percent on quarter in the first quarter of 2019. Investors looked ahead to the release of US first-quarter gross domestic product data on Friday for directional cues.

Back home, stocks related to the metal industry ended lower, as the data from the India's Engineering Export Promotion Council (EEPC) showed that the value of India's copper products exports declined 70 percent in the year ended in March 2019. Exports of copper and copper products, including cathodes, were $1.07 billion in the period from April 2018 to March 2019, down from $3.48 billion in the 2017-18 fiscal year. Besides, textile sector stocks remained in focus with Textile Secretary Raghavendra Singh’s statement that there is great potential for the technical textiles sector but the industry was yet to tap it. He added that another major need was skilling the people in the sector.

Finally, the BSE Sensex slipped 323.82 points or 0.83% to 38,730.86, while the CNX Nifty was down by 84.35 points or 0.72% to 11,641.80.

The BSE Sensex touched a high and a low of 39,262.22 and 38,663.98, respectively and there were 03 stocks advancing against 28 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.58%, while Small cap index was down by 0.05%.

The few gaining sectoral indices on the BSE were Basic Materials up by 0.34%, Oil & Gas up by 0.11% and Realty up by 0.10%, while Telecom down by 2.26%, Metal down by 1.91%, Bankex down by 1.02%, Auto down by 0.80% and Energy down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.06%, TCS up by 0.54% and Bajaj Auto up by 0.41%. On the flip side, Tata Steel down by 2.74%, Vedanta down by 2.26%, Maruti Suzuki down by 1.73%, SBI down by 1.37% and Tata Motors down by 1.34% were the top losers.

Meanwhile, Fitch Ratings in its latest report has stated the Reserve Bank of India (RBI) is the first central bank in the Asia-Pacific region to start an explicit interest rate easing cycle buoyed by benign food inflation and easier global financial conditions following the US Fed's shift to a more dovish policy stance.  The six-member Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, cut rates in February and April citing prospects of benign inflation. In the four months of 2019, the RBI has cut policy interest rates twice by 0.25 percent each to one-year low of 6 percent. It was the first back-to-back rate cut by the central bank since the MPC was formed in late 2016.

According to the report, consumer price inflation at 2.9 percent has remained below the RBI's comfort zone of 4 percent (+/- 2 percent). It said ‘Fitch's baseline is for the RBI to remain on hold for the remainder of 2019, although we acknowledge the central bank may look for opportunities for further easing’. Adding further, it noted that modest fiscal slippage relative to the central government's own targets in recent years has resulted in a stalling of fiscal consolidation. It added that campaign promises to support farmers' incomes, including direct cash transfers and farm loan waivers will, moreover, add to spending pressures in current fiscal.

The rating agency has stated that significant and politically difficult fiscal deficit reduction would be key to meet the general government debt ceiling of 60 percent of GDP by FY25 from a Fitch-estimated 68.8 percent of GDP in FY19. It pointed out that India's ratings balance a strong medium-term growth outlook and relative external resilience with strong foreign reserve buffers, against high public debt, financial sector fragilities and some lagging structural factors.

The CNX Nifty traded in a range of 11,796.75 and 11,624.30. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 5.47%, Grasim Industries up by 4.82%, Dr. Reddy’s Lab up by 2.70%, Bharti Airtel up by 2.53% and BPCL up by 2.52%. On the flip side, Bharti Infratel down by 9.62%, Tata Steel down by 2.71%, Vedanta down by 2.55%, MARUTI down by 1.95% and Hindalco down by 1.94% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 27.84 points or 0.37% to 7,443.91, France’s CAC shed 10.18 points or 0.18% to 5,565.88 and Germany’s DAX was down by 4.13 points or 0.03% to 12,309.03.

Asian markets ended mostly lower on Thursday as surprise deterioration in German business morale rekindled global slowdown fears. A mixed batch of US earnings, worries over China putting policy-easing measures on hold and caution ahead of US first-quarter gross domestic product data due on Friday also kept investors on the sidelines. Chinese shares ended lower on fears of easing stimulus. Further, South Korean shares ended lower on growth worries after data showed the country's economy unexpectedly contracted in the first quarter in the biggest fall since the financial crisis. South Reports showing South Korea's gross domestic product was down a seasonally adjusted 0.3 percent sequentially in the first quarter of 2019. That follows the 1.0 percent increase in the three months prior. However, Japanese shares ended higher after the Bank of Japan revised its forward guidance and said it would keep extremely low interest rates until spring 2020.