Indices continue to fall for fifth straight session on Monday

Extending their losses for the fifth straight session, Indian equity benchmarks ended with losses of over two percent each on Monday, as weak global cues, rising bond yields, and fears of Covid-19-led lockdown came to haunt the bulls on the Street. After making cautious start, the benchmarks traded with heavy losses, amid reports that ahead of its 'Bharat Bandh' call on February 26, traders' body CAIT wrote to Prime Minister Narendra Modi raising issues related to the GST regime, and alleging violation of e-commerce rules by major e-tailers. In its letter to the prime minister, the Confederation of All India Traders (CAIT) called for setting up of a ‘special working group’ at the central level comprising senior officials, CAIT representatives and independent tax experts to review the GST structure and make recommendations to the government. 

Key indices extended their downside in second half of trading session to settle near days’ low, as investors remained on sidelines ahead of the macroeconomic data that is GDP print for the December quarter that is slated to be out on Friday, February 26, post-market hours. Sentiments remained down-beat despite report stated that the GST revenue shortfall faced by states is likely to reduce by about Rs 40,000 crore in the current fiscal on improved collections over the past four months. Investors also paid no heed towards Finance Minister Nirmala Sitharaman’s statement that the Union Budget 2021-22 is about the role of government as a facilitator and the private sector as a key driver of economic growth, without which the country would be losing a big opportunity. Meanwhile, Prime Minister Narendra Modi has made a strong case for repealing archaic laws and making it easier to do business in India, stating that the centre and states need to work closely to boost economic growth.

On the global front, European markets were trading lower on Monday, on concerns that accelerated vaccine rollouts and aggressive fiscal stimulus will spur a faster economic revival and stoke inflation. All eyes will be on European Central Bank President Christine Lagarde's speech on stability, economic co-ordination and governance in the EU later in the day. Asian markets ended mixed on Monday amidst lingering worries about inflation and high valuations. China’s central bank leaving its benchmark lending rate for corporate and household loans unchanged for the 10th straight month. Customs agency data showed South Korea's exports rose 16.7 percent on-year in the first 20 days of February on strong shipments of chips and autos. 

Back home, on the sectoral front, there was some reaction in fertiliser industry stocks as India Ratings and Research (Ind-Ra) said the credit metrics of fertiliser manufacturers in general and urea manufacturers in particular are likely to improve meaningfully in FY22 due to strong likelihood of clearance of subsidy backlogs after allocation of an additional Rs 62,600 crore fertiliser subsidy in the revised estimate of FY21. Infrastructure stocks were in watch with report that as many as 448 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.02 lakh crore. 

Finally, the BSE Sensex fell 1145.44 points or 2.25% to 49,744.32, while the CNX Nifty was down by 306.05 points or 2.04% to 14,675.70.

The BSE Sensex touched high and low of 50,986.03 and 49,617.37, respectively and there were 3 stocks advancing against 27 stocks declining on the index.  

The broader indices ended in red; the BSE Mid cap index fell 1.34%, while Small cap index was down by 1.01%.

The only gaining sectoral indices on the BSE were Metal up by 2.24% and Basic Materials up by 0.29%, while Energy down by 2.92%, Realty down by 2.88%, IT down by 2.58%, TECK down by 2.53% and Auto down by 2.30% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.14%, HDFC Bank up by 0.64% and Kotak Mahindra Bank up by 0.23%. On the flip side, Dr. Reddys Lab down by 4.77%, Mahindra & Mahindra down by 4.51%, Tech Mahindra down by 4.42%, Indusind Bank down by 4.25% and Axis Bank down by 3.96% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that the Union Budget 2021-22 is about the role of government as a facilitator and the private sector as a key driver of economic growth, without which the country would be losing a big opportunity. She said 'the most important component or input required here is the participation of the private sector'. She noted that unless the private sector is energized enough unless it is facilitated enough, India is just losing a very big opportunity.

Sitharaman underlined that the nation's growing and aspiring needs and demands across the various sectors cannot be served just by the state government and central governments put together. She pointed out that the stimulus package, which largely depended on the government's borrowing, was aimed at sectors that provided the multiplying effect such as infrastructure, the budget funding, where public expenditure was going to be undertaken.

Observing that the Centre has clearly funded stimulus with the borrowed money, the minister said the government was aware of fiscal management. She also stated that debt to GDP, another indicators which are important for a healthy economy, has to be carefully managed in such a way that sooner in a sense, in a reasonable time frame, the fiscal deficit will also be kept under the healthy level and not let unattended for decades together.

The CNX Nifty traded in a range of 15,010.10 and 14,635.05 and there were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 2.79%, JSW Steel up by 2.33%, Hindalco up by 2.05%, Tata Steel up by 1.44% and Grasim Industries up by 0.98%. On the flip side, Eicher Motors down by 5.09%, Mahindra & Mahindra down by 4.70%, Tech Mahindra down by 4.64%, Dr. Reddys Lab down by 4.43%, Axis Bank down by 4.02% and Indusind Bank down by 3.96% were the top losers.

European markets were tra ding lower; UK’s FTSE 100 decreased 45.27 points or 0.68% to 6,578.75, France’s CAC fell 31.85 points or 0.55% to 5,741.70 and Germany’s DAX was down by 75.40 points or 0.54% to 13,917.83.

Asian markets ended mixed on Monday as investors were awaiting progress on corona virus stimulus after new Treasury Secretary Janet Yellen urged lawmakers to approve President Joe Biden's $1.9 trillion relief package, saying the proposal could help the US get back to full employment within a year. Japanese shares ended higher with optimism over economic recovery from the corona virus pandemic. Meanwhile, Chinese shares ended sharply lower on concerns over high valuations and possible policy tightening. Chinese central bank leaving its benchmark lending rate for corporate and household loans flat for the 10th straight month, matching market expectations.