Local equities slip into red after touching record levels

After opening at record levels, local equity benchmarks have turned negative in morning session, with Sensex and Nifty falling more than 200 and 50 points, respectively. Reliance Industries, TCS and HCL Tech were the top losers in the Sensex pack, falling up to 2%, followed by Hero MotoCorp and Sun Pharma. Traders turn concerned with former finance secretary Subhash Chandra Garg’s statement that the government’s tax collection is likely to fall short of its estimate by Rs 2.5 lakh crore or 1.2% of GDP in 2019-20, while calling for scrapping of dividend distribution tax. However, traders ignored finance minister Niramala Sitharaman’s statement that decriminalising corporate laws, settling tax disputes and rapid privatisation of state-owned companies are among the measures the government is working on to put the country on the path to a $5-trillion economy. Market participants also failed to get any sense of relief from Union Road Transport and Highways Minister Nitin Gadkari’s report that the goal of making India a $5 trillion economy by 2024 was ‘difficult but not impossible’. It can be achieved by increasing domestic production and reducing dependence on imports. Besides, a private report showed that blocking Huawei from rolling out 5G technology may cause loss of up to $63 billion in the GDP of top eight technology markets, and at least $4.7 billion in case of India, by 2035.

On the global front, Asian markets were trading mixed, despite the record highs on Wall Street on January 17, with the focus now turning to the release of corporate earnings results this week. Back home, a private report showed that India has been ranked very low at 76th place out of 82 countries on a new Social Mobility Index, while Denmark has topped the charts.

The BSE Sensex is currently trading at 41740.62, down by 204.75 points or 0.49% after trading in a range of 41728.67 and 42273.87. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.27%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were Power up by 1.26%, Utilities up by 0.86%, Telecom up by 0.65%, PSU up by 0.10% and FMCG was up by 0.05%, while Energy down by 1.27%, IT down by 0.95%, TECK down by 0.76%, Auto down by 0.64% and Consumer Durables was down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.75%, ICICI Bank up by 1.13%, ITC up by 1.10%, Asian Paints up by 0.97% and ONGC was up by 0.76%. On the flip side, Reliance Industries down by 1.93%, TCS down by 1.75%, HCL Tech down by 1.75%, Hero MotoCorp down by 1.41% and Sun Pharma was down by 1.35% were the top losers.

Meanwhile, the Society of Indian Automobile Manufacturers (SIAM) in its latest data has showed that passenger vehicle (PV) exports from India increased by 5.89 per cent to 5,40,384 units in the first nine months (April-December) of the current financial year (FY20) as compared to 5,10,305 units in the same period of last financial year (FY19). Car shipments saw 4.44 per cent growth at 4,04,552 units, while utility vehicle exports saw a rise of 11.14 per cent at 1,33,511 units during the April-December period.

However, data showed that vans witnessed a 17.4 per cent decline in exports at 2,321 units during the period under review as compared with 2,810 units in the same period last fiscal. Hyundai Motor India (HMIL) led the segment, followed by Ford India and Maruti Suzuki India (MSI) at the second and third positions, respectively.

Hyundai Motor India exported 1,44,982 units to overseas markets during the period under review, up 15.17 per cent over the same period last fiscal. The company exports vehicles to over 90 countries across Africa, Middle East, Latin America, Australia and Asia Pacific. Ford India's foreign dispatches stood at 1,06,084 units during the April-December period, down 12.57 per cent from a year-ago period. On the other hand, Maruti Suzuki India exported 75,948 units across global markets, down 1.7 per cent from same period last year.

The CNX Nifty is currently trading at 12285.50, down by 66.85 points or 0.54% after trading in a range of 12282.95 and 12430.50. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 4.00%, BPCL up by 2.16%, Bharti Infratel up by 2.13%, Asian Paints up by 1.02% and ITC was up by 0.98%. On the flip side, Indian Oil Corp. down by 2.53%, Reliance Industries down by 2.05%, Zee Entertainment down by 1.83%, TCS down by 1.83% and HCL Tech was down by 1.81% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 63.41 points or 0.26% to 24,104.67, Taiwan Weighted strengthened 30.31 points or 0.25% to 12,120.60, KOSPI rose 19.94 points or 0.89% to 2,270.51 and Shanghai Composite was up by 13.09 points or 0.43% to 3,088.59.

On the other hand, Straits Times trembled 9.18 points or 0.28% to 3,271.85, Jakarta Composite lost 29.80 points or 0.47% to 6,261.86 and Hang Seng was down by 100.29 points or 0.35% to 28,956.13.