Benchmarks trade flat in early deals

Indian equity benchmarks made slightly positive start but soon turned volatile and are trading flat in early deals on Monday amid persistent foreign fund outflows. Gains in Metal, Auto and Basic Materials stocks offset by selling in FMCG, Telecom and IT stocks. Initially, the markets got support with positive trade in Asian peers. Traders took encouragement with Finance Minister Nirmala Sitharaman’s statement that the government is working on more measures to revive the sagging economy. However, volatility came in with report that reversing their buying trend, foreign portfolio investors (FPI) turned net sellers in December with a net outflow of Rs 244 crore from the capital markets amid subdued economic data. Adding some more pessimism among market participants IHS Markit in its latest report said that India's real GDP growth in 2019-20 fiscal is expected to be slightly below 5% as the impact of stimulus measures will take time to filter through to the economy.

On the global front, most of the Asian markets were trading higher with modest gains following the positive cues from Wall Street Friday after the US Labor Department's closely-watched monthly jobs report showed much stronger than expected job growth in the month of November. Some of the markets in the region pared initial gains after data showed China's exports declined in November for the fourth consecutive month. Doubts about whether a US-China trade deal will be reached before additional tariffs on Chinese imports come into effect on December 15 also weighed on sentiment.

Back home, industry chamber CII has suggested that the government should reduce the personal income tax rate and slash corporate tax further to 15% for all companies over three years to boost demand and propel growth. On the sectoral front, telecom stocks were in focus with a private report that the Department of Telecommunications is likely to propose a reduction in the universal service obligation fund charge by 2 percentage points to 3%. In scrip specific development, Maruti Suzuki gained as its overall sales increased to 141834 in November 2019 from 135946 units in November 2018.

The BSE Sensex is currently trading at 40435.52, down by 9.63 points or 0.02% after trading in a range of 40336.56 and 40536.42. There were 18 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.04%, while Small cap index was down by 0.06%.

The top gaining sectoral indices on the BSE were Metal up by 1.23%, Auto up by 0.97%, Basic Materials up by 0.48%, Consumer Discretionary up by 0.47% and Oil & Gas was up by 0.31%, while FMCG down by 0.51%, Telecom down by 0.47%, IT down by 0.31%, TECK down by 0.28% and Bankex was down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.96%, Maruti Suzuki up by 1.96%, Tata Motors up by 1.49%, Vedanta up by 1.44% and Tata Steel up by 1.17%. On the flip side, Hindustan Unilever down by 0.99%, Bajaj Finance down by 0.97%, Tech Mahindra down by 0.92%, HCL Technologies down by 0.72% and TCS down by 0.69% were the top losers.

Meanwhile, with an aim to revive the sagging economy, Finance Minister Nirmala Sitharaman has said that the government is working on more steps, including rationalisation of personal income tax rates. She said the government has taken several measures during August and September to boost the economy. She also said that the public sector banks have disbursed nearly Rs 5 lakh crore without compromising on prudential norms in the last two months to boost consumption in the hinterland. Besides, the Gross Domestic Product (GDP) growth slowed down to more than six-year low of 4.5% in the second quarter of the current fiscal from 5% recorded in the first quarter.

Sitharaman said ‘so there are ways for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on’. Assuring that there will be no harassment of taxpayers, she said the intent of the government is to further simplify taxation systems including removal of exemption. Citing the example of corporate tax, she said ‘From now on, they're moving towards a greater simplified and exemption free. Therefore, has harassment-free therefore subjective interpretation free taxation regime.’

The minister further said the government has introduced faceless assessment of direct tax and soon this will be introduced in indirect tax to eliminate harassment. On the Goods and Services Tax (GST), she said that the rate structure will have to be decided by the GST Council. Eventually, the rates have to be rationalised and the entire tax system has to be simplified. With regards to apprehension raised on the genuineness of data, she said ‘there's no doubt, we need to bring credibility back to the data’. She added that the government is aware of the debate which is going on data and its credibility, and the intention is to make sure that any kind of inappropriate methodology which is coming into the data will have to be addressed.

The CNX Nifty is currently trading at 11923.40, up by 1.90 points or 0.02% after trading in a range of 11888.05 and 11941.25. There were 27 stocks advancing against 22 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Zee Entertainment up by 2.80%, Tata Motors up by 2.11%, Hindalco up by 1.94%, Maruti Suzuki up by 1.82% and Vedanta up by 1.41%. On the flip side, Bharti Infratel down by 1.12%, Bajaj Finance down by 0.97%, HCL Technologies down by 0.97%, Tech Mahindra down by 0.90% and Hindustan Unilever down by 0.87% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 69.78 points or 0.3% to 23,424.18, Taiwan Weighted strengthened 54.90 points or 0.47% to 11,664.54, Hang Seng increased 6.39 points or 0.02% to 26,504.76, KOSPI rose 4.86 points or 0.23% to 2,086.71 and Jakarta Composite soared 1.42 points or 0.02% to 6,188.29. On the flip side, Shanghai Composite declined 0.75 points or 0.03% to 2,911.26 and Straits Times was down by 2.51 points or 0.08% to 3,192.20.