Post Session: Quick Review

Indian equity benchmarks traded in red for most part of the day on Saturday and witnessed sharp selloff in last hour of trade largely forced the markets to close at day’s low, as Budget proposals failed to lift investors’ sentiment. Markets started off with marginal losses on report that the government’s fiscal deficit touched 132.4% of the full-year target at December-end mainly due to slower pace of revenue collections. The Controller General of Accounts (CGA) data showed that in actual terms, the fiscal deficit or gap between expenditure and revenue was Rs 931,725 crore. The government aims to restrict the gap at 3.3% of the GDP or Rs 703,760 crore in the year ending March 2020. However, key indices recovered soon and entered into positive territory, as sentiments turned optimistic with report that growth of eight core industries recovered to 1.3% in December 2019 after remaining in the negative zone in the previous four months helped by expansion in production of coal, fertiliser and refinery products. Traders also took some solace with report that GST collections have crossed the Rs 1 trillion mark for the third month in a row in January with improved compliance and plugging of evasion.

However, key indices failed to hold onto the positive momentum and fell sharply in late afternoon deals as the government raised fiscal deficit target to 3.8 per cent of the GDP from 3.3 per cent pegged earlier for 2019-20 due to revenue shortage. Investors paid no heed towards Finance Minister Nirmala Sitharaman’s statement that nominal GDP growth for 2020-21 is estimated at 10 percent. Presenting the Budget for 2020-21, she said receipts for 2020-21 are pegged at Rs 22.46 lakh crore while expenditure at Rs 30.42 lakh crore. Traders also overlooked announcements over cut in personal income tax, extended tax benefits for affordable housing and gave relief to companies on payment of dividend.

On the sectoral front, select logistic stocks ended in green after Finance Minister Nirmala Sitharaman in her budget has proposed to release National logistic policy and to create single-window e-Logistics market. Infrastructure stocks also were in limelight as Finance Minister Nirmala Sitharaman said to augment India's infrastructure and create jobs, the government has launched Rs 103 lakh crore infra projects besides providing about Rs 1.70 lakh crore for transport infrastructure and accelerating highways construction.

The BSE Sensex ended at 39659.45, down by 1064.04 points or 2.61% after trading in a range of 39634.79 and 40905.78. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 2.28%, while Small cap index was down by 2.45%.(Provisional)

The few gaining sectoral indices on the BSE were IT up by 1.31% and TECK up by 1.01%, while Realty down by 8.00%, Capital Goods down by 4.96%, PSU down by 4.16%, Industrials down by 4.12% and Metal down by 4.02% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 4.36%, Nestle up by 1.70%, Hindustan Unilever up by 1.52%, Tech Mahindra up by 1.14% and Infosys up by 0.15%. (Provisional)

On the flip side, ITC down by 6.78%, HDFC down by 6.32%, Larsen & Toubro down by 6.17%, SBI down by 5.09% and Ultratech Cement down by 4.90% were the top losers. (Provisional)

Meanwhile, the Controller General of Accounts’ data (CGA) has showed that the government's fiscal deficit touched 132.4 per cent of the full-year target at December-end mainly due to slower pace of revenue collections. In actual terms, the fiscal deficit or gap between expenditure and revenue was Rs 9,31,725 crore. The deficit was 112.4 per cent of 2018-19 Budget Estimate (BE) in the corresponding period. Besides, the government aims to restrict the gap at 3.3 per cent of the Gross Domestic Product (GDP) or Rs 7,03,760 crore in the year ending March 2020.

As per the data, the government's revenue receipts were Rs 11.46 lakh crore or 58.4 per cent of the 2019-20 BE. In the same period last fiscal, the collections were 62.8 per cent of the BE. The data further revealed that total expenditure was 75.7 per cent of BE or Rs 21.09 lakh crore. During the corresponding period in 2018-19, the expenditure was 75 per cent of the BE. Of the total spending, the capital expenditure was 75.6 per cent of the BE, higher than 70.6 per cent of the estimates during the same period in 2018-19.

Meanwhile, the Medium Term Fiscal Policy (MTFP) Statement presented with the Budget 2019-20, had pegged the fiscal deficit target for 2019-20 at 3.3 per cent of GDP, which was further expected to follow a gradual path of reduction and attain the targeted level of 3 per cent of GDP in 2020-21, and continue at the same level in 2021-22. In September 2019, the government had decided to lower tax rate for corporates, taking an estimated hit of Rs 1.45 lakh crore on its revenue mobilisation.

The CNX Nifty ended at 11643.65, down by 318.45 points or 2.66% after trading in a range of 11633.30 and 12017.35. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 4.25%, Hindustan Unilever up by 1.95%, Nestle up by 1.70%, Tech Mahindra up by 1.31% and Wipro up by 0.15%. (Provisional)

On the flip side, ITC down by 6.76%, Tata Motors down by 6.31%, HDFC down by 6.28%, Larsen & Toubro down by 6.09% and Zee Entertainment down by 6.00% were the top losers. (Provisional)