Indian markets ended lower with cut of around a percent on Tuesday amid heavy selloffs in shares of banking as investors fretted about the exposure of major banks to the troubled real estate sector, compounding worries about a slowdown in economic growth. Today, the markets are likely to extend previous session’s losses with negative start tracking weak global cues. Markets were closed on Wednesday on account of Gandhi Jayanti. There will be some cautiousness with the finance ministry data showing that Goods and services tax (GST) collection fell to a 19-month low of Rs 91,916 crore in September, pointing to a deepening economic slowdown. It is the second straight month when the collection has fallen below the Rs 1-trillion mark. Traders will be also concerned with report that the Finance Ministry made it clear that companies opting for a lower tax of 22% will not be eligible for accumulated additional depreciation and Minimum Alternative Tax (MAT) credit. Also, an another report stated that India Inc’s debt servicing woes, which seemed to be getting better from FY15 to FY19, now seem to be taking a distinct turn for the worse. Though, some respite may come later in the day with India Ratings and Research’s statement that the corporate tax cut will help India Inc save up to Rs 65,000 crore of outgo in FY20. Some support may also come with World Economic Forum’s (WEF) statement that India, a young economy with lot of potential, has demonstrated remarkable strength and resilience amid global slowdown. Traders may take note of report that India and America will launch a new initiative for clean energy to fuel economic growth in the strategically-important Indo-Pacific region where China has been trying to expand its sphere of influence. Besides, the Reserve Bank assured the general public that the Indian banking system is safe and stable and there is no need for panic based on rumours. Banking stocks will be in focus with domestic ratings agency Crisil’s report said that the Indian banking system's stock of dud assets will further reduce to up to 8 per cent level by March 2020, but the NBFCs may continue to face challenges. There will be some buzz in the auto stocks with report that low consumer sentiment continued to subdue sales performance of the Indian automobile sector in September, as major industry players reported a significant decline in their respective sales figures.
The US markets declined on Wednesday as worries intensified about slowing US manufacturing activity that could presage a possible economic downturn. Asian markets are trading in red on Thursday after the US opened a new trade war front by saying it will impose tariffs on $7.5 billion of goods from the European Union.
Back home, Indian equity bourses ended in red for yet another trading session. The start of the day was positive, amid report that the government has stayed with the borrowing plan for the fiscal, as announced in the budget, sending a strong signal that it will try and meet the fiscal deficit target despite a sharp cut in corporate tax rate that is expected to cost Rs 1.45 lakh crore. But, soon key indices turned volatile, as India's manufacturing activity remained unchanged in September 2019, hit by subdued demand conditions domestically and externally. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) was at 51.4 in September, unchanged from August. Markets extended their losses in the last hours of the trade. Sentiments got impacted with the Commerce and Industry Ministry’s data showing that the eight core industries in August contracted to over three-and-half year low of 0.5%, due to decline in output of coal, crude oil, natural gas, cement, and electricity. Adding more worries among traders, the RBI’s data showed that the country’s external debt stood at $557.4 billion in the June quarter, an increase of $14.1 billion over the quarter ended March 2019. Separately, a survey of World Economic Forum business leaders showed that the possibility of a fiscal crisis is the biggest risk to doing business globally. Finally, the BSE Sensex fell 361.92 points or 0.94% to 38,305.41, while the CNX Nifty was down by 114.55 points or 1.00% to 11,359.90.
