Local barometers extend losses; Sensex below 36,900 mark

Pressurized by feeble global cues, local barometer gauges extended their losses in morning deals, breaching their crucial 36,900 (Sensex) and 10,950 (Nifty) levels. Traders were jittery on fears that a surge in crude prices following attacks on Saudi oil facilities could hurt the economy further. Investors also remain concerned with State Bank Research’s report warning that any attempt to trim government spending to maintain the fiscal numbers will be severely detrimental to growth. The current slowdown cannot be tackled by monetary policy in isolation. The government must address demand weakness by continuing to meaningfully frontload expenditure say through Mgnrega and PM-Kisan. Sentiments got hit with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that India's current account and fiscal deficit could take a hit if oil prices continue to rise after an attack on Saudi Arabian oil facilities over the weekend. Meanwhile, Commerce and Industry Minister Piyush Goyal’s statement that India and US are in continuous dialogue and working towards early resolution of trade related issues.

On the global front, Asian markets were trading mostly in red, as investors continued to weigh up the implications of a major attack on Saudi Arabia’s oil infrastructure at the weekend. Back home, on the sectoral front, Tourism industry stock remain in focus as Tourism Ministers from different states on made a strong pitch for reduction, simplification and rationalisation of various taxes and levies, including GST, in the tourism and travel industry to attract tourists and cushion stiff global competition.

The BSE Sensex is currently trading at 36860.21, down by 263.10 points or 0.71% after trading in a range of 36853.03 and 37169.56. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.28%, while Small cap index was down by 0.17%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.69%, Metal up by 0.24% and FMCG was up by 0.15%, while Telecom down by 1.50%, Auto down by 0.99%, TECK down by 0.84%, Capital Goods down by 0.83% and IT was down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.58%, Yes Bank up by 1.34%, Hindustan Unilever up by 0.86%, Asian Paints up by 0.76% and ONGC was up by 0.42%. On the flip side, Axis Bank down by 2.40%, Tech Mahindra down by 2.10%, HCL Tech down by 1.79%, Tata Motors - DVR down by 1.78% and Bharti Airtel was down by 1.69% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman stated that the government has decided not to levy 2 percent tax deduction at source (TDS) on cash payments of above Rs 1 crore made through Agriculture Produce Market Committees (APMCs) in order to make immediate payments to farmers for their produce. In the Union Budget, the government had made the provision of levying 2 percent TDS on cash withdrawals exceeding Rs 1 crore to discourage the practice of making payments in cash.

Sitharaman has said that an additional 15 percent depreciation will be allowed on motor vehicles purchased between August 23, 2019, and March 31, 2020. She said the move is expected to give a boost to the automobile sector by driving sales.

The minister further said that the depreciation on cars purchased during the period will be 30 percent as against the normal rate of 15 percent. In the case of buses, lorries and taxis, she said the depreciation rate has been enhanced to 45 percent from 30 per cent. She added that depreciation helps companies reduce tax liabilities.

The CNX Nifty is currently trading at 10922.55, down by 80.95 points or 0.74% after trading in a range of 10915.15 and 11000.10. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 1.61%, Yes Bank up by 1.57%, Titan Company up by 1.48%, Dr. Reddys Lab up by 1.11% and Hindustan Unilever was up by 0.79%. On the flip side, Axis Bank down by 2.67%, Tech Mahindra down by 2.18%, Bharti Airtel down by 2.17%, Ultratech Cement down by 2.13% and BPCL was down by 2.04% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 351.56 points or 1.3% to 26,772.99, Shanghai Composite declined 32.69 points or 1.08% to 2,998.06, Taiwan Weighted dropped 24.86 points or 0.23% to 10,873.27, Straits Times trembled 15.60 points or 0.49% to 3,188.33 and Nikkei 225 was down by 7.37 points or 0.03% to 21,980.92.

On the other side; KOSPI rose 0.44 points or 0.02% to 2,062.66 and Jakarta Composite was up by 3.65 points or 0.06% to 6,223.09.