Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in early noon session, as investors booked profits. Selling pressure on the index heavyweights such as TCS, Reliance Industries and HDFC Bank dragged the markets lower. Meanwhile, broader indices were also trading in red, dragging their larger peers lower during the trade. Sentiments were under pressure 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. Investors paid no attention towards Union Road Transport and Highways Minister Nitin Gadkari’s statement that the goal of making India a $5 trillion economy by 2024 was difficult but not impossible. He added that it can be achieved by increasing domestic production and reducing dependence on imports. Meanwhile, the market breadth is dismal with 1300 stocks declining versus 870 stocks advancing.

On the global front, Asian markets were trading mixed, as investors went cautious ahead to the release of central bank decisions and earnings reports. Back on street, in scrip specific developments, shares of Lupin declined as the company has received five observations from the US health regulator after inspection of its Vizag facility in Andhra Pradesh. Reliance industries slipped despite reporting a rise of 13.55% in its net profit at Rs 11,640 crore for the quarter under review as compared to Rs 10,251 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 41767.04, down by 178.33 points or 0.43% after trading in a range of 41708.94 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 lost 0.20%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Telecom up by 1.27%, Power up by 1.11%, Utilities up by 0.92%, Realty up by 0.39% and Capital Goods up by 0.16%, while Energy down by 1.20%, IT down by 1.01%, TECK down by 0.74%, Consumer Durables down by 0.59% and Metal was down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 3.85%, ICICI Bank up by 1.99%, Asian Paints up by 0.97%, Bharti Airtel up by 0.89% and Larsen & Toubro was up by 0.88%. On the flip side, TCS down by 2.13%, Reliance Industries down by 1.69%, HDFC Bank down by 1.54%, Sun Pharma down by 1.44% and Kotak Mahindra Bank was down by 1.06% were the top losers.

Meanwhile, the tax department has increased Goods and Services Tax (GST) collection target to Rs 1.15 lakh crore for the month of January-February and Rs 1.25 lakh crore for March by checking fraudulent input tax credit claims. Last month, the department had raised its GST tax collection target to Rs 1.1 lakh crore per month with Rs 1.25 lakh crore for a single month for the remaining period of this financial year while the direct tax target was to remain at Rs 13.35 lakh crore sans the corporate tax relief of Rs 1.45 lakh crore.

GST authorities would look into the mismatch of supply and purchase invoices, data analytics of mismatch in GSTR-1, GSTR-2A and GSTR-3B, failure of filing returns, over invoicing, recuperation of fake or excess refunds availed beyond the permissible limits, patching the tax leakages, action on checking fake or huge ITC claims, data analytic review of all the refund under inverted duty structure, etc. SMSs and emails will be sent to all such fraudulent or excess ITC claimants, targeted defaulters, non-filers and those who provide mismatched information in their returns or over invoice or who have been identified through data analytics for tax evasion by duping the system through rogue modus operandi.

Taxpayers who have taken ITC wrongfully can voluntarily repay amount equal to inadmissible credit before verification and punitive action is taken against them. The electronic communications to such identified targeted taxpayers and fraudulent refund seekers and over-invoice users would be followed by visits from the GST field formations to make them abide by the law and pay due taxes in time, and the field formations would be required to report on daily basis.

The CNX Nifty is currently trading at 12288.75, down by 63.60 points or 0.51% after trading in a range of 12277.20 and 12430.50. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation up by 3.85%, Bharti Infratel up by 2.43%, BPCL up by 1.74%, ICICI Bank up by 1.69% and Asian Paints was up by 0.99%. On the flip side, Indian Oil Corporation down by 3.55%, TCS down by 2.26%, Vedanta down by 1.94%, Reliance Industries down by 1.93% and Zee Entertainment was down by 1.90% were the top losers.

Asian markets were trading mixed, KOSPI rose 17.30 points or 0.77% to 2,267.87, Nikkei 225 surged 51.96 points or 0.22% to 24,093.22, Taiwan Weighted strengthened 34.30 points or 0.28% to 12,124.59 and Shanghai Composite was up by 12.47 points or 0.41% to 3,087.97.

On the flip side, Hang Seng decreased 193.46 points or 0.67% to 28,862.96, Straits Times trembled 5.93 points or 0.18% to 3,275.10 and Jakarta Composite was down by 29.80 points or 0.47% to 6,261.86.