Post Session: Quick Review

Indian equity benchmarks ended lower on Monday. The start of the day was on a positive note, as fall in coronavirus cases aided the sentiments in the markets. India recorded 46,643 cases in the last 24 hours, lowest since March 24, taking the country's total coronavirus caseload to 30,278,963. Adding more optimism, Economic think-tank NCAER expects the Indian economy to grow 8.4-10.1 percent for the current financial year as against a contraction of 7.3 percent in the last fiscal.

But soon, markets turned negative, as the government's total liabilities stood at Rs 116.21 lakh crore at the end of March 2021, up 6.36 per cent from the previous quarter. The total liabilities (including liabilities under the Public Account) of the government were Rs 109.26 lakh crore at end-December 2020. Also, RBI data showed that sliding from a lifetime high, India's forex reserves declined by $4.148 billion to reach $603.933 billion for the week ended June 18 due to a fall in gold and currency assets.

Some concerns also came with S&P Global Ratings stating the Covid pandemic could worsen structural deficits and indebtedness of states, despite a likely rebound in the economy over the next 12-24 months. Traders also got worried, after the International Monetary Fund (IMF) has said that global food prices have rallied to multi-year highs, triggered by Covid-19 pandemic-related supply chain disruptions and soaring transport costs.

Key indices remained lower for the most part of the trading session and finally ended in red. Sentiments were negative as India Ratings and Research (Ind-Ra) said its earlier estimate of gross domestic product (GDP) growth at 10.1 per cent for the current financial year (FY22) is unlikely to hold due to the speed and scale of Covid 2.0. It now expects GDP growth to come in at 9.6 per cent in FY22. This is however contingent upon India vaccinating its entire adult population by December 31.

On the global front, European markets were trading lower with travel shares slumping amid restrictions prompted by Covid-19 strains, while U.S. futures were little changed alongside Asian equities. Asian markets ended mostly lower on Monday, even after Singapore's industrial production accelerated in May. The data from the Economic Development Board showed that industrial output surged 30.0 percent year-on-year in May, following a 2.3 percent rise in March. Production was forecast to increase 23.6 percent. Excluding biomedical manufacturing, industrial production grew 29.0 percent yearly in May, following a 11.3 percent rise in the preceding month.

The BSE Sensex ended at 52735.59, down by 189.45 points or 0.36% after trading in a range of 52673.50 and 53126.73. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.40%, while Small cap index was up by 0.46%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.27%, Healthcare up by 1.05%, Basic Materials up by 0.76%, PSU up by 0.42% and Utilities up by 0.31%, while Energy down by 0.80%, Capital Goods down by 0.56%, TECK down by 0.47%, IT down by 0.44% and Telecom down by 0.44% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddy's Lab up by 1.75%, Tata Steel up by 1.64%, Tech Mahindra up by 1.43%, Sun Pharma up by 0.60% and Hindustan Unilever up by 0.60%. On the flip side, TCS down by 1.33%, Titan Co down by 1.20%, HCL Tech. down by 1.00%, Reliance Industries down by 0.87% and Ultratech Cement down by 0.77% were the top losers. (Provisional)

Meanwhile, in a big relief to the taxpayers, the Government has granted further extension of timelines of compliances under Income Tax Act. It has also announced tax exemption for expenditure on COVID-19 treatment and ex-gratia received on death due to COVID-19.

As per the notification, many taxpayers have received financial help from their employers and well-wishers for meeting their expenses incurred for treatment of Covid-19. In order to ensure that no income tax liability arises on this account, it has been decided to provide income-tax exemption to the amount received by a taxpayer for medical treatment from employer or from any person for treatment of Covid-19 during FY 2019-20 and subsequent years.

The notification further noted that unfortunately, certain taxpayers have lost their life due to Covid-19. Employers and well-wishers of such taxpayers had extended financial assistance to their family members so that they could cope with the difficulties arisen due to the sudden loss of the earning member of their family. In order to provide relief to the family members of such taxpayer, it has been decided to provide income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years.

The CNX Nifty ended at 15814.70, down by 45.65 points or 0.29% after trading in a range of 15792.15 and 15915.65. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy's Lab up by 1.79%, Hindalco up by 1.70%, Tata Steel up by 1.61%, Divi's Lab up by 1.55% and Tech Mahindra up by 1.43%. On the flip side, HDFC Life Insurance down by 4.10%, Titan Co down by 1.47%, TCS down by 1.30%, Shree Cement down by 1.18% and HCL Tech. down by 1.04% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 31.56 points or 0.44% to 7,104.51, France’s CAC decreased 24.18 points or 0.37% to 6,598.69 and Germany’s DAX was down by 22.58 points or 0.14% to 15,585.39.

Asian markets ended mostly lower on Monday as coronavirus cases spiked across Asia, while inflation worries also added pressure on market sentiments. Japanese shares ended marginally lower as investors cautious ahead of key US economic data due later in the week, including the June jobs report. Hong Kong shares dipped as trading resumed following a morning suspension due to a severe weather warning. Further, Chinese shares declined after data showed that China's industrial profits slowed again in May due to high base effects and increases in the costs of production.