Post Session: Quick Review

Indian equity benchmarks failed to hold the positive momentum and ended marginally lower on Tuesday, dragged by losses in Telecom, TECK, and IT stocks. During the opening session, key indices reached at fresh all-time high levels, as traders took some encouragement with Union Minister Nitin Gadkari’s statement that the government is in the process of launching Digital data-based credit ratings of Micro, Small and Medium Enterprises (MSME), to help entrepreneurs to get bank loans on the basis of these credit ratings. Markets trimmed some initial gains in afternoon session but managed to trade above neutral lines, as some optimism remained among the investors with a private report stating that Prime Minister Narendra Modi is finally attempting to overhaul India’s most controversial labour laws to attract investment and make it easier to do business in a country where changing archaic rules is a challenge for any government.

However, markets were unable to hold on to the gains and turned into negative terrain in late trade, after rating agency India Ratings and Research (Ind-Ra) revised its GDP growth forecast for the current financial year (FY20) to 5.6 per cent. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1 per cent. Some cautiousness also crept in with the Employees State Insurance Corporation (ESIC) in its latest payroll data showing that around 12.23 lakh jobs were created in September 2019, lower than 13.38 lakh in the previous month.

On the global front, Asian markets ended mostly lower on Tuesday, while European markets were trading mostly in red, as investors tracked developments in the China-US trade talks. Back home, energy stocks were in focus as the Indian Minister of New and Renewable Energy expressed confidence that the country will overachieve on its target to have 175 gigawatts of renewable energy capacity operational by 2022. Food processing sector were in focus after an inter-ministerial approval committee, headed by Food Processing Minister Harsimrat Kaur Badal, has cleared projects worth Rs 271 crore to boost processing and preservation capacities. The projects were sanctioned under the Creation/ Expansion of Food Processing & Preservation Capacities (CEFPPC) scheme.

The BSE Sensex ended at 40815.48, down by 73.75 points or 0.18% after trading in a range of 40710.20 and 41120.28. There were 10 stocks advancing against 21 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 0.36%. (Provisional)

The only gaining sectoral index on the BSE was Bankex up by 0.80%, while Telecom down by 5.13%, TECK down by 2.22%, IT down by 1.48%, Capital Goods down by 1.26% and Industrials down by 1.21% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 2.98%, Tata Steel up by 1.57%, Indusind Bank up by 1.48%, Hero MotoCorp up by 0.66% and Asian Paints up by 0.42%. (Provisional)

On the flip side, Bharti Airtel down by 4.54%, Tata Motors - DVR down by 2.56%, Power Grid down by 2.29%, HCL Technologies down by 2.12% and Tata Motors down by 2.08% were the top losers. (Provisional)

Meanwhile, Minister of State for Finance Anurag Singh Thakur has said the Central Goods and Services Tax (GST) collection stood at Rs 3.26 lakh crore till October 2019 in current fiscal year (FY20), which is around half the government's target for 2019-20. The Budget Estimates for Central GST for 2019-20 has been fixed at Rs 6,63,343 crore. He said the shortfall or excess in collection of GST with respect to budget estimate, if any, is calculated after completion of financial year.

On direct taxes, the minister said that for 2019-20, the budget estimate is Rs 13,35,000 crore. Between April-October, 2019 the net collection of direct taxes is Rs 5,18,084 crore. Regarding revenue loss to the government on account of corporate tax rate reduction, Thakur said the likely revenue forgone due to the reduction in corporate tax rates has been estimated to be Rs 1,45,000 crore.

On reasons for not cutting personal income tax rates, he said over the past years, the government has provided personal income tax relief to taxpayers taking into account the overall needs of the economy. Besides, on the effect of slowdown on tax collection and fiscal deficit, he said the revised estimates of tax collection and fiscal deficit are decided at the time of preparation of the budget estimate for the next year.

The CNX Nifty ended at 12046.80, down by 26.95 points or 0.22% after trading in a range of 12006.35 and 12132.45. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were ICICI Bank up by 2.85%, GAIL India up by 2.46%, Dr. Reddys Lab up by 1.86%, Indusind Bank up by 1.55% and Tata Steel up by 1.31%. (Provisional)

On the flip side, Zee Entertainment down by 7.39%, Bharti Infratel down by 6.62%, Bharti Airtel down by 4.26%, Grasim Industries down by 4.12% and JSW Steel down by 2.71% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC decreased 10.07 points or 0.17% to 5,914.79 and Germany’s DAX fell 37.46 points or 0.28% to 13,208.99, while UK’s FTSE 100 increased 0.21 points or 0% to 7,396.50.

Asian markets ended mostly lower on Tuesday, even after reports suggesting that China and the United States were 'very close' to a phase one trade deal. Hong Kong shares ended lower as investors locked in profit after a recent rally, while Alibaba’s shares rose to a small premium over New York in their debut at the financial hub. However, Japanese shares ended higher as the dollar hit a one-week high against the yen on growing optimism that China and the United States will soon announce a partial trade agreement. Earlier today, China's commerce ministry said Vice premier Liu He, China's chief trade negotiator, held a call with his US counterparts and that both sides agreed to maintain communication on remaining issues.