Markets wipe out opening losses; trade higher in early deals

Indian equity benchmarks made negative start on Wednesday tacking weakness in Asian peers amid escalation of border tensions between India and China. But, soon markets wiped out all the losses and entered into green territory. Domestic indices are trading higher with marginal gains in early deals led by buying in Realty, Oil & Gas and Healthcare stocks. Early cautiousness was due to rising coronavirus cases in India. The total number of coronavirus cases in the country has reached 354,161, and nearly 11,921 have died from the disease. However, markets took U-turn taking encouragement with RBI Director S Gurumurthy’s statement that the Centre is likely to announce the final stimulus package in the ‘post-COVID era’ in September or October. He added that in the post-COVID era, the world will shift from ‘multilateralism to bilateralism’, and revival of the Indian economy will be faster. Some support also came in with Prime Minister Narendra Modi’s statement that the economy is showing green shoots as the country emerges from the coronavirus lockdown and asserted that the fight against the pandemic is a fine example of cooperative federalism where the Centre and the states are working together. Meanwhile, India may impose anti-dumping duty on Chinese antibacterial drug Ciprofloxacin Hydrochloride with a view to guard domestic industry from cheap imports from the neighbouring country.

On the global front, all the Asian markets are trading lower despite the positive cues overnight from Wall Street. Investors turned cautious following the increasing number of coronavirus infections in Beijing and the US as well as on worries about rising tensions on the Korean peninsula and between India and China. Besides, the Japan posted a merchandise trade deficit of 833.388 billion yen in May, down 13.7 percent on year. That beat forecasts for a shortfall of 970.8 billion yen following the 930 billion yen deficit in April. Exports were down 28.3 percent on year to 4.184 trillion yen, badly missing expectations for a decline of 17.9 percent following the 21.9 percent drop in the previous month.

Back home, banking stocks were in limelight as hearing in the interest waiver case is scheduled in the Supreme Court (SC) today. The SC said the scope of hearing is limited to the interest waiver, which is levied on accrued interest. Pharma stocks were in focus as India may impose anti-dumping duty on Chinese antibacterial drug Ciprofloxacin Hydrochloride with a view to guard domestic industry from cheap imports from the neighbouring country. In scrip specific developments, HDFC gained on planning to raise funds and the proposal regarding this will be discussed by its board on June 19. On the other hand, Bank of Maharashtra fell reporting a drop of 20.46% in its net profit for the quarter ended 31 March, compared to the same period last year, on account of higher provisioning.

The BSE Sensex is currently trading at 33673.77, up by 68.55 points or 0.20% after trading in a range of 33332.96 and 33703.49. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were Realty up by 1.16%, Oil & Gas up by 0.82%, Healthcare up by 0.76%, Metal up by 0.66%, IT up by 0.61%, while Power down by 0.84%, Utilities down by 0.75% were the only losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.24%, Axis Bank up by 1.95%, Tech Mahindra up by 1.43%, Indusind Bank up by 1.29% and Tata Steel up by 0.94%. On the flip side, Power Grid down by 1.94%, NTPC down by 1.62%, Ultratech Cement down by 0.92%, Mahindra & Mahindra down by 0.89% and SBI down by 0.72% were the top losers.

Meanwhile, gross direct tax collection fell 31 percent to Rs 1,37,825 crore till June 15 of the first quarter of FY21 with advance corporate tax mop-up declining 79 percent amid coronavirus lockdown, which resulted in shuttering of most of the country's economic activities. The Budget for 2020-21 has estimated a 12 percent increase in gross tax collections at Rs 24.23 lakh crore, from Rs 21.63 lakh crore in FY20. The collection was lower in the last fiscal due to corporate tax rate cuts.

The budget target for direct taxes is Rs 13.19 lakh crore, which is 28 percent higher than Rs 10.28 lakh crore in FY20, as the government expects a good response to the tax dispute settlement scheme 'Vivad se Vishwas'. Total advance collection fell a massive 76.05 percent to Rs 11,714 crore so far in the June quarter from Rs 48,917 crore in the corresponding three-months in FY20.

Advance corporate tax collection plummeted 79 percent to Rs 8,286 crore in the first quarter of the current fiscal from Rs 39,405 crore in the June 2019 quarter. The advance personal income tax collection declined 64 percent to Rs 3,428 crore from Rs 9,512 crore in the year-ago period. This has pulled down gross direct tax collection by a full 31 per cent to Rs 1,37,825 crore in the first quarter of FY21, down from Rs 1,99,755 crore in the June 2019 quarter. After refunds, the total net direct tax collection is only Rs 92,681 crore so far this fiscal, a decline of 32 per cent from Rs 1,36,941 crore in the year-ago period. So far in the June quarter, the department has refunded Rs 45,143 crore. It is 28 per cent lower than Rs 62,813 crore that was refunded in the corresponding quarter last fiscal.

The CNX Nifty is currently trading at 9919.45, up by 5.45 points or 0.05% after trading in a range of 9833.80 and 9944.85. There were 30 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.92%, Wipro up by 1.46%, Tech Mahindra up by 1.44%, Axis Bank up by 1.30% and Tata Steel up by 1.28%. On the flip side, Bharti Infratel down by 2.59%, Power Grid down by 2.21%, NTPC down by 1.62%, Mahindra & Mahindra down by 1.53% and GAIL India down by 1.44% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 180.14 points or 0.80% to 22,402.07, Straits Times declined 2.64 points or 0.10% to 2,664.21, Hang Seng weakened 5.59 points or 0.02% to 24,338.50, Taiwan plunged soared 3.72 points or 0.03% to 11,507.92, KOSPI dropped 9.11 points or 0.43% to 2,128.94, Jakarta Composite fall 12.86 points or 0.26% to 4,973.60 and Shanghai Composite was down by 2.86 points or 0.10% to 2,928.89.