Benchmarks trade lower with marginal cut in early deals

Indian equity benchmarks made cautious start and are trading lower with marginal cut in early deals on Tuesday, as losses in Telecom, Metal and Basic Materials weighed on the indices. Traders were concerned as Crisil sharply cut India’s Gross domestic product (GDP) growth forecast to 5.1% for the current financial year (FY20) from an earlier estimate of 6.3%. Adding pessimism among market participants, a private report indicated that with the government trying to revive a stuttering economy, the Goods and Services Tax (GST) mop-up for November is expected to provide some respite, but it added that an improvement in GST collections may not be a solution to all the worries of the government. Though, downside remained capped with Commerce and Industry Minister Piyush Goyal’s statement that the value of India's overall exports rose about 8% to $538.07 billion during 2018-19. Besides, the government aims to increase the country's export of merchandise and services to $900 billion in 2019-20 and raise India's share in world exports (goods and services) to 3.5%.

Global cues also remained subdued with most of the Asian markets were trading lower on renewed worries about global trade tensions after US President Donald Trump announced plans to reinstate tariffs on metal imports from Brazil and Argentina. Weak US manufacturing data also dampened sentiment. Besides, Japan will provide November numbers for monetary base today.

Back home, the Cellular Operators Association of India (COAI) said that the Indian telecom industry has taken first step towards improving its financial health by hiking tariffs for the first time since 2016 - a much needed move for the telcos to cover adjusted gross revenue (AGR) dues within 90 days. In scrip specific development, Biocon was trading in green. Biocon and Mylan N.V. announced the US launch of Ogivri TM (trastuzumab-dkst), a biosimilar to Herceptin (trastuzumab).

The BSE Sensex is currently trading at 40733.61, down by 68.56 points or 0.17% after trading in a range of 40720.45 and 40885.03. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.12%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.77%, Auto up by 0.30%, Consumer discretionary up by 0.26%, Oil & Gas up by 0.09% and PSU was up by 0.07%, while Telecom down by 2.14%, Metal down by 1.90%, Basic Materials down by 0.82%, Capital Goods down by 0.47% and Industrials was down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.33%, Kotak Mahindra Bank up by 0.94%, SBI up by 0.83%, Maruti Suzuki up by 0.79% and Bajaj Finance up by 0.69%. On the flip side, Tata Steel down by 2.59%, Vedanta down by 2.28%, Tata Motors - DVR down by 1.50%, Yes Bank down by 1.01% and Indusind Bank down by 0.98% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has highlighted that corporate tax reduction is aimed at attracting fresh investment and generating jobs, and said that ‘green shoots’ are already visible with several foreign as well as domestic firms showing interest to invest. Amid concerns over slowing growth, she assured that the government was ‘pro-active’ in addressing the challenges faced by the economy and also made it clear that tax rate cut was not aimed to benefit certain companies but the entire industry.

Allaying fears of corporate tax reduction impacting revenue collection, she said gross direct tax collection increased by 5% till November this fiscal. She added that the decision to reduce corporate tax will have an impact of about Rs 1.45 lakh crore on revenue collection, but it will help in bringing more funds within a year's time. She also stressed that maximum direct tax collection comes in the final quarter of the financial year.

On the impact of corporate tax cut, the minister said ‘Yes, we are conscious of it and we are conscious that if not today, in a matter of a year you will have a lot of investments coming into this country. I can see the initial green shoots.’ She also allayed fears on economic slowdown, saying it was not for the first time that the rate of growth of Gross Domestic Product (GDP) had slowed to 4.5%. She said in the fiscal 2012-13 also the GDP had recorded sub-5 per cent growth, but it increased later.

The CNX Nifty is currently trading at 12025.20, down by 23.00 points or 0.19% after trading in a range of 12019.35 and 12068.60. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 1.44%, Bajaj Auto up by 1.25%, Titan Company up by 0.95%, SBI up by 0.81% and Maruti Suzuki up by 0.74%. On the flip side, Bharti Infratel down by 5.50%, Tata Steel down by 2.58%, Hindalco down by 2.27%, Vedanta down by 2.25% and JSW Steel down by 2.12% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 159.74 points or 0.68% to 23,369.76, Hang Seng decreased 38.76 points or 0.15% to 26,405.96, Jakarta Composite lost 2.80 points or 0.05% to 6,127.26, Shanghai Composite declined 3.07 points or 0.11% to 2,872.74, KOSPI fell 10.55 points or 0.5% to 2,081.37 and Straits Times trembled 6.29 points or 0.2% to 3,181.68. On the flip side, Taiwan Weighted was up by11.98 points or 0.1% to 11,514.81.