Benchmarks extend opening losses in early deals

Indian equity benchmarks made negative start on Wednesday amid weak global cues. Soon, markets extend their losses and are trading lower with cut of over half a percent in early deals. Selling in Realty, IT and Bankex dampened the sentiments in the markets. Some volatility came in ahead of the Thursday's F&O expiry. Traders were concerned as the International Monetary Fund (IMF) sharply scaled down India’s economic growth projection by 300 basis points to 9.5 per cent for the current financial year from 12.5 per cent estimated earlier in April. IMF said the downward revision is owing to lack of access to vaccines and possibility of renewed waves of coronavirus. Meanwhile, the Directorate General of GST Intelligence (DGGI) has detected tax evasion worth Rs 278 crore by bidders who were awarded railway tenders since 2017. Market participants overlooked Minister of State for Finance Pankaj Chaudhary’s statement that increased tax collection in the first quarter this fiscal shows that the economy is on the recovery path. Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal.

On the global front, most of the Asian markets were trading lower following the broadly negative cues overnight from Wall Street, as traders remain concerned amid the rapid spread of the delta variant of the coronavirus in regions and the rising tensions between China and the West. The markets also reflect uncertainty ahead of the Federal Reserve's monetary policy announcement late today. Back home, pharma stocks were in focus with report that the production linked incentive scheme (PLI) for pharmaceutical products has export generation potential of Rs 1,96,000 crore over a period of six years. In scrip specific development, InterGlobe Aviation tumbled after posting its biggest quarterly loss.

The BSE Sensex is currently trading at 52225.95, down by 352.81 points or 0.67% after trading in a range of 52222.17 and 52673.69. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.64%, while Small cap index was down by 0.54%.

The sole gaining sectoral index on the BSE was Telecom up by 0.58%, while Realty down by 0.89%, IT down by 0.82%, Bankex down by 0.76%, Power down by 0.66%, Auto down by 0.63% were the losing top indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.57%, Bharti Airtel up by 0.84%, Bajaj Finserv up by 0.47%, Hindustan Unilever up by 0.38% and Titan Company up by 0.34%. On the flip side, Dr. Reddy's Lab down by 1.46%, HDFC down by 1.37%, HDFC Bank down by 1.33%, Nestle down by 1.25% and TCS down by 1.01% were the top losers.

Meanwhile, Minister of State for Finance Pankaj Chaudhary has said increased tax collection in the first quarter this fiscal (Q1FY22) shows that the economy is on the recovery path. Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal.

He stated reasons for increase in the collections include revival of economic activities and positive sentiments among taxpayers during this current financial year, leading to increased income estimates and higher advance tax payments in the first quarter of the FY 2021-22 as compared to the corresponding period of FY 2020-21.

Further, he said net Indirect Tax (GST and non-GST) revenue collection in the first quarter of FY 2021-22 is Rs 3.11 lakh crore. He added the increased tax collection (Direct & Indirect) as reported in the first quarter of the current financial year as compared to the same period previous financial year shows that the economy is on the recovery path. Higher tax collection would enable Government in increasing public expenditure, which would have a positive impact on GDP.

The CNX Nifty is currently trading at 15645.15, down by 101.30 points or 0.64% after trading in a range of 15640.55 and 15767.50. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 1.26%, Divi's Lab up by 0.91%, Bharti Airtel up by 0.69%, Bajaj Finserv up by 0.50% and Titan Co up by 0.49%. On the flip side, Tata Consumer Products down by 2.92%, Wipro down by 1.43%, Dr. Reddy's Lab down by 1.39%, HDFC Bank down by 1.37% and Eicher Motors down by 1.35% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 391.25 points 1.40% to or 27,578.97, Straits Times fell 9.20 points or 0.29% to 3,129.61, Taiwan Weighted slipped 202.72 points or 1.17% to 17,067.15, KOSPI dropped 5.09 points or 0.16% to 3,227.44, Jakarta Composite lost 6.90 points or 0.11% to 6,090.15 and Shanghai Composite was down by 20.10 points or 0.59% to 3,361.08, while Hang Seng rose 26.62 points or 0.11% to 25,113.05.