Bears continue to haunt markets

Bears continued to haunt Indian equity markets in late afternoon session, with the Sensex and Nifty losing over 300 and 100 points, respectively, despite firm opening in European markets. Trading sentiments got hampered, amid reports that direct Tax collections fell short by Rs 82,000 crore at Rs 11.18 lakh crore during 2018-19 with lower corporate tax collections emerging as one of the reasons for the lower mop. The government had set a target of Rs 12 lakh crore. Traders also remained pessimistic after US Labour Secretary Alexander Acosta told US lawmakers that the Trump administration is proposing a hike in the H-1B visa application fee to raise funds for the expansion of an apprentice programme which trains American youth for technology sector jobs.
 
On the sectoral front, airlines stocks remained in focus, after the International Air Transport Association (IATA) said that the demand for air cargo globally continues to face headwinds due to weakening businesses and growing trade tensions. Stocks related to the hospital industry also remained in limelight, with rating agency, ICRA’s latest report stating that the hospital sector has witnessed consolidation and a significant jump in M&A transactions, post the stress on performance of the sector due to regulatory restrictions. According to ICRA, the total value of M&A transactions in the hospital sector in FY2019 amounted to Rs 7615 crore, as against transactions worth Rs 2991 crore done in FY2018, recording an increase of 155 per cent.

On the global front, European markets were trading in green, as Germany's industrial production rose for a second straight month and at the fastest pace in three months in March, defying expectations of a decline, and raised hopes of a strong economic performance in the first quarter. The preliminary data from the Federal Statistical Office showed that industrial production grew 0.5 percent monthly following a 0.4 percent increase in February, which was revised from 0.7 percent.  However, Asian markets were trading in red, as fears of an escalation in trade war between the US and China continued to keep risk appetite in check.

The BSE Sensex is currently trading at 37969.18, down by 307.45 points or 0.80% after trading in a range of 37884.64 and 38248.57. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.62%, while Small cap index was down by 0.87%.

The lone gaining sectoral index on the BSE was IT up by 0.10%, while Realty down by 2.06%, Energy down by 1.82%, Auto down by 1.12%, Healthcare down by 1.10% and Consumer Disc down by 1.05% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 0.58%, Coal India up by 0.50%, HCL Tech. up by 0.44%, Power Grid up by 0.31% and Infosys up by 0.10%. On the flip side, Vedanta down by 3.34%, Tata Motors down by 3.09%, Tata Motors - DVR down by 2.85%, Reliance Industries down by 2.50% and Yes Bank down by 2.13% were the top losers.

Meanwhile, forecasting positive outlook, credit rating agency, ICRA in its latest report said that capital expenditure by states on their roads is likely to increase at a growth rate of 22% to Rs 1.43 lakh crore by FY 2021 from Rs 96,000 crore in FY 2019, supported by several expressway projects launched/announced by Maharashtra and Uttar Pradesh. The report further noted that road expressway project would give fillip to capex in the sector in these two states.

The rating agency further made a prediction of state wise expenditure on roads, saying that in Maharashtra, the estimated spend in case of Nagpur-Mumbai expressway alone is Rs 35,000 crore over next three years in addition to proposed road improvement programme through hybrid annuity mode, while in UP, for Purvanchal and Ganga expressways together, the estimated spend over next three years is around Rs 20,000 crore.

Further, report said that historically, the cumulative spend by the state governments on roads was much higher than the central government spend on national highways but most of it went unnoticed because of low proportion of public private partnership projects, wide dispersion across various geographies and authorities and most of these contracts were smaller in terms of value which were lapped up by the local EPC contractors.

The CNX Nifty is currently trading at 11382.60, down by 115.30 points or 1.00% after trading in a range of 11381.25 and 11479.10. There were 11 stocks advancing against 38 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were UPL up by 1.20%, Coal India up by 0.68%, TCS up by 0.63%, BPCL up by 0.55% and Cipla up by 0.53%. On the flip side, Zee Entertainment down by 7.54%, Tata Motors down by 3.35%, Vedanta down by 3.30%, Reliance Industries down by 2.57% and SBI down by 2.41% were the top losers.

All Asian markets were trading in red; Straits Times declined 32.78 points or 0.99% to 3,279.74, Hang Seng fell 360.56 points or 1.23% to 29,002.46, Taiwan Weighted slipped 63.43 points or 0.58% to 10,923.71, Jakarta Composite fell 50.20 points or 0.80% to 6,247.12, Shanghai Composite decreased 33.02 points or 1.13% to 2,893.37, Nikkei 225 tumbled 321.13 points or 1.46% to 21,602.59 and KOSPI was down by 8.98 points or 0.41% to 2,168.01.

European markets were trading mostly in green; France’s CAC gained 4.53 points or 0.08% to 5,400.28 and Germany’s DAX was up by 30.14 points or 0.25% to 12,122.88. On the flip side, UK’s FTSE 100 was down by 13.88 points or 0.19% to 7,246.59.