Bourses extend losses after Budget announcements

Indian equity benchmarks extended their losses in late afternoon session, after Union Budget announcements. Anxiety spread among traders, 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. Market participants paid no heed towards Finance Minister Nirmala Sitharaman’s announcements over cut in personal income tax, extended tax benefits for affordable housing and gave relief to companies on payment of dividend in the Union Budget for 2020-21.

Back home, logistic sector stocks were in watch, after the government said that a national logistics policy will be released soon which will set up a single window e-logistics market and focus on employment generation and making MSMEs competitive. Besides, power industry stocks were also in focus, as the government proposed a Rs 22,000 crore outlay for renewables and power sector in 2020-21 for realising its goal of 24X7 electricity for all and providing freedom to consumers to choose service provider and tariff.

The BSE Sensex is currently trading at 40123.70, down by 599.79 points or 1.47% after trading in a range of 39930.46 and 40905.78. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.09%, while Small cap index was down by 1.05%.

The only gaining sectoral indices on the BSE were IT up by 1.20%, TECK up by 0.95% and Telecom up by 0.14%, while Realty down by 5.56%, Capital Goods down by 3.13%, Industrials down by 2.38%, Bankex down by 2.22% and PSU down by 1.98% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.69%, Hindustan Unilever up by 1.67%, Tech Mahindra up by 1.32%, Infosys up by 0.88% and Titan up by 0.45%. On the flip side, Larsen & Toubro down by 4.42%, ITC down by 4.40%, HDFC down by 3.83%, ICICI Bank down by 2.57% and Kotak Mahindra Bank down by 2.50% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has released data on sectoral deployment of bank credit collected from select 39 scheduled commercial banks, accounting for about 90 per cent of the total non-food credit deployed by all scheduled commercial banks, for the month of December 2019.

As per the report, on a year-on-year (y-o-y) basis, non-food bank credit growth decelerated to 7.0 per cent in December 2019 from 12.8 per cent in December 2018. Further, credit to agriculture & allied activities decelerated to 5.3 per cent in December 2019 from 8.4 per cent in December 2018.

RBI also noted that credit growth to industry decelerated to 1.6 per cent in December 2019 from 4.4 per cent in December 2018. Within industry, credit growth to ‘beverage & tobacco’, ‘leather & leather products’, ‘paper & paper products’, ‘rubber plastic & their products’, ‘cement & cement products’ and ‘construction’ accelerated. However, credit growth to ‘food processing’, ‘chemical & chemical products’, ‘basic metal & metal products’, ‘all engineering’ and ‘infrastructure’ contracted.

Besides, credit growth to the services sector decelerated sharply to 6.2 per cent in December 2019 from 23.2 per cent in December 2018, while personal loans growth decelerated marginally to 15.9 per cent in December 2019 from 17 per cent in December 2018.

The CNX Nifty is currently trading at 11757.90, down by 204.20 points or 1.71% after trading in a range of 11717.45 and 12017.35. There were 6 stocks advancing against 43 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were TCS up by 2.71%, Hindustan Unilever up by 1.78%, Tech Mahindra up by 1.05%, Infosys up by 0.87% and Dr. Reddy’s Lab up by 0.46%. On the flip side, ITC down by 4.74%, Bajaj Finserv down by 4.39%, Larsen & Toubro down by 4.36%, HDFC down by 4.19% and Zee Entertainment down by 3.96% were the top losers.