Local equities continue lackluster trade

Mirroring global clues, local equity benchmarks continued their lackluster trade in morning session, with losses of around half a percent. Barring Telecom, Oil & Gas stocks, there was selling across all sectoral indices. Weakness was also visible in the broader markets with S&P BSE Mid-cap and S&P BSE Small-cap indices losing around half a percent each. Traders remain concerned with a report that income tax e-filings in FY2019 have dropped by more than 6.6 lakh. Income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. Traders took note of a report that Economic Affairs Secretary Subhash Chandra Garg’s statement that Asian Development Bank (ADB) must expand its private sector operations to boost economic development. He said there is a rising need for the agency to focus on strengthening human capital and develop social safety nets. Traders failed to get any sense of relief with the Reserve Bank of India’s (RBI) data showing the country's foreign exchange reserves soared by $4.368 billion to $418.515 billion in the week to April 26, helped by the second dollar-rupee swap auction.

On the global front, Asian markets were trading in red, after President Donald Trump threats to hike tariffs on $200 billion of Chinese goods at the end of the week in a bid to speed up stuttering trade talks between the economic superpowers. Back home, in order to curb Goods and Services Tax (GST) evasion through issue of fake invoices, all invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September.

The BSE Sensex is currently trading at 38684.07, down by 279.19 points or 0.72% after trading in a range of 38509.79 and 38719.33. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.52%, while Small cap index was down by 0.40%.

The only gaining sectoral indices on the BSE were Telecom up by 0.36% and Oil & Gas was up by 0.24%, while Metal down by 1.82%, Consumer Durables down by 1.28%, Basic Materials down by 1.25%, Auto down by 0.88% and FMCG was down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 0.52%, Power Grid up by 0.45%, Bharti Airtel up by 0.27% and Asian Paints was up by 0.17%. On the flip side, Tata Motors down by 3.91%, Tata Motors - DVR down by 3.49%, Yes Bank down by 3.08%, Hindustan Unilever down by 1.82% and HDFC was down by 1.61% were the top losers.

Meanwhile, in order to ensure that cable TV and direct-to-home (DTH) companies are complying with new regulatory norms, the Telecom Regulatory Authority of India (TRAI) has roped in state-owned Broadcast Engineering Consultants India (BECIL) for conducting audits. The TRAI, which had earlier warned of action against operators found to be flouting the new tariff order and regulatory regime, said that audits in this regard will begin soon.

BECIL will be conducting the audit on behalf of TRAI to ensure compliance with the new regulatory framework. TRAI Secretary S K Gupta said ‘we request all distribution platform operators (DPOs) to ensure compliance with the new regulatory framework in letter and spirit’. Gupta said that a decision is being taken on the companies that would face the audit of systems. He further stated DTH and Cable TV operators will be randomly selected and audit will be conducted to see if they are in compliance with the new regulatory framework.

TRAI unveiled a new tariff order and regulatory regime for the broadcast and cable sector to facilitate consumers to opt for channels they wish to view and pay only for them. It had said every channel should be offered a la carte, with a transparent display of rates on electronic programme guide. The regulator also clarified that DTH and cable operators cannot force consumers to go in for only predefined packages or bouquets.

The CNX Nifty is currently trading at 11626.10, down by 86.15 points or 0.74% after trading in a range of 11585.10 and 11629.80. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.77%, Wipro up by 0.86%, Indian Oil Corporation up by 0.74%, Tech Mahindra up by 0.56% and TCS was up by 0.41%. On the flip side, Tata Motors down by 3.92%, Yes Bank down by 3.27%, Hindalco down by 3.17%, JSW Steel down by 2.93% and UPL was down by 2.93% were the top losers.

Asian markets were trading in red; Hang Seng decreased 960.08 points or 3.19% to 29,121.47, Taiwan Weighted dropped 200.58 points or 1.81% to 10,895.72, Shanghai Composite declined 164.56 points or 5.35% to 2,913.78, Straits Times trembled 110.25 points or 3.25% to 3,282.04 and Jakarta Composite was down by 72.48 points or 1.15% to 6,246.98.