Indian equities add losses amid weak global cues

Adding losses, Indian equity benchmarks continued to trade lower in afternoon session, as selling momentum in the equities persisted. Sentiment on the street weakened due to concerns around growth after data showed a surprise drop in industrial output for December and a rise in January inflation to a six-year high. Annual retail inflation rose to 7.59 percent in January, while December industrial output contracted 0.3 percent, after rising for the first time in three months in November. Some pessimism also came with Finance Minister Nirmala Sitharaman’s statement that Goods and Services Tax (GST) compensation to states is delayed due to inadequate realisation of cess and that the Centre was not according any differential treatment to states. On the sectoral front, IT sector stocks remained in focus after Industry body Nasscom has projected revenue growth of 7.7 percent at $191 billion for the IT sector in the ongoing fiscal (FY20). In scrip specific development, shares of Indian Railway Catering and Tourism Corporation (IRCTC) surged as much as 12% after the company announced a big jump in its Q3 profit to Rs 206 crore, from Rs 73 crore in the same period of the previous year. 

On the global front, Asian Markets were trading mostly lower after a dramatic spike in the number of coronavirus deaths and cases in mainland China, with traders concerned about the scale of the epidemic. Back home, the BSE Sensex is currently trading at 41357.43, down by 208.47 points or 0.50% after trading in a range of 41355.84 and 41709.30. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.34%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.21%, Healthcare up by 0.30%, IT up by 0.28%, PSU up by 0.16% and TECK was up by 0.14%, while Realty down by 0.98%, Metal down by 0.96%, Bankex down by 0.92%, Telecom down by 0.88% and Industrials was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.78%, Titan Company up by 2.59%, Mahindra & Mahindra up by 0.88%, Nestle up by 0.62% and TCS was up by 0.61%. On the flip side, Indusind Bank down by 1.72%, Maruti Suzuki down by 1.63%, Tata Steel down by 1.60%, Kotak Mahindra Bank down by 1.54% and ONGC was down by 1.50% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that Goods and Services Tax (GST) compensation to states is delayed due to inadequate realisation of cess and that the Centre was not according any differential treatment to states. She also said that the government is committed to paying to states as per the provisions of the GST (Compensation to States) Act, 2017. She noted that at the time of implementation of the GST, the Centre had promised to compensate states for loss of revenue for five years at an agreed formula. She said ‘now, there has been a delay in giving the 14 percent compensation and we are running late in giving it timely.’

The minister has pointed out that GST collection has witnessed an impressive recovery since November and the collection has been over Rs 1 lakh crore each in the past three months and this indicates revenue collection has improved. She said it means that commercial and economic activity is back on its feet and the capital expenditure between April-November has been increased by 22 percent. In order to raise consumption, she said the government has increased allocation to PM-KISAN, MNREGA and Direct Benefit Transfer under various heads.

Expressing happiness over the RBI's decision to ease Cash Reserve Ratio, Sitharaman said this will help increase banks lending towards housing, auto and MSME sectors. She also said the concerns regarding slump in consumption were being taken care of and the government was taking steps to promote exports. She added ‘so the four engines you talk about constantly -- public investment, private investment, private consumption, and exports -- are all being given a push.’

The CNX Nifty is currently trading at 12141.85, down by 59.35 points or 0.49% after trading in a range of 12139.80 and 12225.65. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 6.11%, SBI up by 2.70%, Titan Co up by 2.60%, Zee Entertainment up by 2.31% and Dr. Reddys Lab was up by 1.46%. On the flip side, Indusind Bank down by 2.09%, Coal India down by 1.89%, Tata Steel down by 1.70%, ONGC down by 1.64% and Adani Ports & SEZ was down by 1.63% were the top losers.

Asian Markets were trading mostly lower; Hang Seng decreased 63.26 points or 0.23% to 27,760.40, Jakarta Composite lost 38.68 points or 0.65% to 5,874.40, Nikkei 225 slipped 33.48 points or 0.14% to 23,827.73, Shanghai Composite declined 10.71 points or 0.37% to 2,916.19, Straits Times was down by 5.97 points or 0.19% to 3,217.40 and KOSPI fell 5.42 points or 0.24% to 2,232.96.

On the flip side, Taiwan Weighted was up by 17.59 points or 0.15% to 11,791.78.