Post Session: Quick Review

Indian equity benchmarks remained under pressure throughout the session and ended with losses of around a percent, triggered by a sell-off in global equities amid fresh trade worries between US-China. Markets opened with heavy losses, as traders were cautious with report that in a first in recent history of tax filings, income tax e-filings in FY2019 have dropped. 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.

Trading sentiments remained subdued in the late trade with a private survey showing that India's services sector expanded at its slowest pace in seven months in April as some businesses postponed decisions and expansion plans until seeing results of the general election currently under way. The Nikkei/IHS Markit Services Purchasing Managers' Index slipped to 51.0 in April, the lowest since September, down from 52.0 the previous month. Market participants paid no heed towards reports that with a view to facilitate fundraising by start-ups, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed relaxation in the income tax laws pertaining to sale of residential properties and carrying forward of losses.

On the global front, Asian markets ended lower on Monday, while European markets were trading in red, as US-China trade concerns resurfaced after US President Donald Trump unexpectedly jacked up pressure on China to reach a trade deal in the midst of negotiations, saying he would hike US tariffs on Chinese goods this week. Back home, majority of steel sector stocks ended in red with data from the World Steel Association showing that India's steel production fell by about 0.3 percent to 27.33 million tonne (MT) during the first quarter of the calendar year 2019. During the January-March 2018 period, the country had produced 27.40 MT of crude steel.

The BSE Sensex ended at 38575.99, down by 387.27 points or 0.99% after trading in a range of 38509.79 and 38719.33. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.82%, while Small cap index was down by 0.87%.(Provisional)

The only gaining sectoral indices on the BSE were Telecom up by 0.43% and Oil & Gas up by 0.06%, while Consumer Durables down by 2.94%, Metal down by 2.09%, Realty down by 1.71%, Consumer Disc down by 1.40% and Industrials down by 1.38% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.19%, ITC up by 1.07%, Bharti Airtel up by 0.42% and Coal India up by 0.02%. (Provisional)

On the flip side, Yes Bank down by 5.04%, Tata Motors - DVR down by 4.88%, Tata Motors down by 4.46%, Bajaj Finance down by 2.36% and Tata Steel down by 2.21% were the top losers. (Provisional)

Meanwhile, a joint study carried out by the industry body Associated Chambers of Commerce & Industry of India (ASSOCHAM) and rating agency CRISIL stated that banks have taken a huge 57% haircut in the 94 large accounts worth Rs 1.75 lakh crore which were resolved in FY19, recovering just Rs 75,000 crore or only 43% of the admitted claims under the insolvency process approved by the various national company law tribunals (NCLTs).

The numbers assume importance as the bankruptcy law enters the third year this month. As of March, there were 1,143 cases pending at various bankruptcy tribunals, and 32% of them are pending for over 270 days. The average resolution timeline for these 94 cases resolved was 324 days as against the stipulated timeline of 270 days. The study said these 94 companies were liquidated, the recovery would have been just 22% which is significantly lower than the recovery rate through normal resolution process.

ASSOCHAM-CRISIL study further said there are a few big-ticket accounts for which resolution has not been finalised for over 400 days as IBC framework is still a work in progress. According to study, some of the key issues that need to be addressed for successful implementation of IBC are adherence to timelines, adequate judicial infrastructure, creditor classification and prioritising, among others.

The CNX Nifty ended at 11598.90, down by 113.35 points or 0.97% after trading in a range of 11571.35 and 11632.55. There were 10 stocks advancing against 40 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 2.40%, TCS up by 1.45%, ITC up by 0.66%, Bajaj Finserv up by 0.59% and Tech Mahindra up by 0.55%. (Provisional)

On the flip side, Zee Entertainment down by 6.10%, Titan Co down by 5.49%, Yes Bank down by 5.17%, Tata Motors down by 4.23% and JSW Steel down by 3.95% were the top losers. (Provisional)

European markets were trading in red, France’s CAC decreased 112.36 points or 2.02% to 5,436.48 and Germany’s DAX was down by 243.19 points or 1.96% to 12,169.56.

Asian markets ended lower on Monday due to selling pressure followed by escalated US-China trade tensions after US President Donald Trump on May 05 said that the US would hike tariffs on $200 billion worth of Chinese goods this week, with further tariffs on $325 billion goods ‘shortly’. Following Trump's threats to slam higher tariffs, the South China Morning Post newspaper reported, citing sources that Beijing is considering canceling the 11th round of trade talks with US officials later this week. Chinese shares ended lower on heavy selling pressure as Trump's comments unsettled investors who had been anticipating a trade deal as early as this week. Meanwhile, markets in Japan and South Korea were closed for holidays.