Markets recover losses to end flat

Indian equity benchmarks recovered most of their losses to end Tuesday’s trading session on flat note, with Sensex and Nifty closing slightly lower. After a cautious start, key indices remained under a grip of bears during whole day, affected by India Meteorological Department’s (IMD) statement that pre-monsoon rainfall from March to April has recorded 27% deficiency. The IMD recorded 43.3 millimetres of rainfall across the country from March 1 to April 24 as against the normal precipitation of 59.6 millimetres. Anxiety remained among investors, amid a report indicating that the decline in economic growth momentum in October-December quarter of FY19 is likely to continue. As per the report, subdued consumption demand and election related uncertainty is expected to weigh on India's industrial production.

Weakness persisted during the second half of the day, with a private report stating that surging global oil prices will pose a first big challenge to India's new government, whoever wins an election now underway, especially as domestic prices have been allowed to lag, meaning consumers are in for a painful surge as they catch up. However, markets managed to stage recovery in the last leg of the trade, supported by Union minister Suresh Prabhu’s statement that the country is working on district-based developmental model to achieve aggregate growth. He said if the national growth was at 6% and those of the districts was 4%, the aggregate growth would be 10%. Meanwhile, in order to improve margins and profit, Engineering Export Promotion Council (EEPC) of India has urged engineering exporters to adopt intellectual property rights (IPR).

On the global front, European markets were trading in red, as Eurozone economic sentiment weakened for a tenth straight month in April to its lowest level in nearly three years, amid a sharp deterioration in the morale in industry to its weakest level in about five years. The survey data from the European Commission showed that the economic sentiment index decreased to 104 from 105.6 in March. Asian markets ended higher, despite disappointing China's manufacturing data with both official and private surveys pointing to slower growth this month.

Back home, stocks related to the realty sector ended lower, amid reports that housing sales dipped by 5 per cent to 75,706 units in nine major cities during January-March period because of transition in GST rates. Further, airlines stocks remained in focus, with a report stating that financial costs are likely to climb further for airlines in the near term, with new accounting standards on leases set to create significant volatility in their profit and loss accounts. Indian Accounting Standard 116 or Ind AS-116 has come into effect from April 1 and pertains to principles for recognition, presentation and disclosure of leases.

Finally, the BSE Sensex slipped 35.78 points or 0.09% to 39,031.55, while the CNX Nifty was down by 6.50 points or 0.06% to 11,748.15.

The BSE Sensex touched a high and a low of 39,105.88 and 38,753.46, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.16%, while Small cap index was down by 1.27%.

The top gaining sectoral indices on the BSE were Metal up by 1.44%, IT up by 1.36%, Oil & Gas up by 1.16%, TECK up by 1.07% and Consumer Durables up by 0.96%, while Telecom down by 2.22%, Realty down by 2.18%, Auto down by 1.70%, Power down by 1.27% and Bankex down by 1.22% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech. up by 4.00%, Tata Steel up by 2.10%, HDFC Bank up by 1.77%, Infosys up by 1.74% and HDFC up by 1.06%. On the flip side, Yes Bank down by 29.23%, Indusind Bank down by 5.21%, Hero MotoCorp down by 3.51%, Maruti Suzuki down by 2.54% and Power Grid down by 2.36% were the top losers.

Meanwhile, in a bid to curb tax evasion, Goods and Services Tax (GST) officers are working on a system in which businesses above a certain turnover threshold will have to generate ‘e-invoice’ on government or GST portal for every sale. Businesses above a specified threshold will just get a unique number for every electronic invoice or e-invoice generated. This number can be matched with the invoices reported in the sales return and taxes paid.

Going forward, businesses will be required to generate full electronic-tax invoice or e-invoice recording entire value of sales. Businesses beyond a turnover threshold would be provided a software which will be linked to GST or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice. E-invoice generation method will be similar to the one being followed for e-way bill on the ‘ewaybill.nic.in’ portal or payment of Goods and Services Tax on the GSTN portal.

The e-invoice system will eventually replace the requirement of generation of e-way bill for movement of goods, as invoices would be generated through a centralised government portal. Currently, e-way bill is required for movement of goods worth more than Rs 50,000 across state borders. Once full e-tax invoice starts getting generated, it would significantly ease burden of return filing by businesses as invoice wise data would be auto-populated in the return forms.

The CNX Nifty traded in a range of 11,756.25 and 11,655.90. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 5.41%, Zee Entertainment up by 4.06%, IOC up by 3.70%, HCL Tech. up by 3.53% and TATA Steel up by 2.60%. On the flip side, Yes Bank down by 29.70%, Indiabulls Housing Finance down by 6.40%, Indusind Bank down by 5.80%, Hero MotoCorp down by 3.80% and Bharti Infratel down by 3.79% were the top losers.

European markets were trading in red; UK’s FTSE 100 slipped 17.25 points or 0.23% to 7,423.41, France’s CAC fell 25.31 points or 0.45% to 5,555.67 and Germany’s DAX was down by 17.91 points or 0.15% to 12,310.11.

Asian markets ended mostly higher on Tuesday with the rise in Chinese stocks despite data showed factory activity in China expanded for a second straight month in April but at a much slower pace, rekindling investor concerns over slowing global growth. The official Purchasing Managers' Index (PMI) for manufacturing unexpectedly fell to 50.1 in April from 50.5 in March, while the Caixin-Markit China PMI slipped to 50.2 against the 50.8 reading in the previous month. Growth in China's services sector also slowed in the month, an official survey showed. Investors also awaited a raft of economic data from the euro zone, the US Federal Reserve's two-day policy meeting starting later in the day and the latest developments on the trade front for directional cues. However, Seoul shares ended down after Samsung Electronics, the world's biggest Smartphone and memory chip maker, reported a slump in first-quarter net profits, hit by multiple factors. Upbeat industrial output data helped to limit the downside to some extent. A government report showed that industrial output in South Korea climbed a seasonally adjusted 1.4 percent month-on-month in March, - rebounding from the 3.4 percent contraction in February. Meanwhile, the Japanese markets were closed for the Golden Week holidays.