Bears dominating Dalal Street in early deals; Nifty slips below 16,300 mark

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Friday amid nervousness among investors globally tracking news flow on the Russia-Ukraine war. The talks between Ukraine and Russia have not seemed to make any headway and thus high volatility amid rising commodity and oil prices continue. Markets are trading lower with cut of over a percent each in early deals. Some cautiousness came in with a private report that India's trade and current account deficits are likely to widen, putting pressure on the rupee, as global oil prices surge and the domestic economy reopens from a third wave of the pandemic. Meanwhile, keen to keep government deficit within stated targets, the finance ministry will start daily monitoring of the revenue receipts from March 15, including tax collections, as well as expenditure.

On the global front, most of the Asian markets are trading lower following the broadly negative cues overnight from Wall Street, as the Russia-Ukraine crisis continues to hurt market sentiment after Russian forces stepped up their attack and bombarded Ukraine's second-largest city and besieged two ports.

Back home, banking stocks were in focus as the RBI is likely to meet some of the state-run lenders, including State Bank of India and UCO Bank, to discuss payment mechanisms to Russian companies. Indian banks have stopped processing payments to Russian firms after the US imposed sanctions on Russian banks following the invasion of Ukraine last week. In scrip specific development, LT Foods was higher as its Subsidiary LT Foods Americas Inc has acquired 51% stake in Golden Star Trading Inc.

The BSE Sensex is currently trading at 54330.44, down by 772.24 points or 1.40% after trading in a range of 54194.17 and 54653.59. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.24%, while Small cap index was down by 0.77%.

The sole gaining sectoral index on the BSE was Metal up by 0.24%, while Auto down by 2.39%, Consumer discretionary down by 2.14%, Realty down by 2.09%, IT down by 1.60%, TECK down by 1.59% were the top losing indices on BSE.

The few gainers on the Sensex were Tata Steel up by 0.83%, NTPC up by 0.61% and ITC up by 0.23%. On the flip side, Asian Paints down by 4.80%, Maruti Suzuki down by 3.38%, Mahindra & Mahindra down by 2.44%, Axis Bank down by 2.32% and Wipro down by 2.30% were the top losers.

Meanwhile, keen to keep government deficit within stated targets, the finance ministry will from March 15 start daily monitoring of the revenue receipts, including tax collections, as well as expenditure. The move comes against the backdrop of a possible deferment of the initial public offering (IPO) of LIC, which was expected to fetch over Rs 60,000 crore, to the next financial year in view of the ongoing Russia-Ukraine war and its implication on Indian markets.

On the other hand, the government's decision to bring back thousands of Indian students stranded in Ukraine will impose an additional burden on the exchequer. It said the daily monitoring of tax and non-tax revenue collections will help the government in taking timely corrective actions, wherever needed. It noted that the CBDT and CBIC have been asked to report flash figures up to the previous day latest by 12 noon. Besides, other non-tax and disinvestment receipts would have to be reported on a daily basis.

It said that the Controller General of Accounts (CGA) has been asked to provide daily revenue collection and expenditure figures of various ministries between March 15 and March 31 to the expenditure secretary. The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) are the apex bodies responsible for collecting direct and indirect taxes, respectively. Likely deferment of LIC IPO along with additional burden on bringing back Indians stranded in Ukraine will put pressure on the fiscal deficit, which has already been raised in the Revised Estimates (RE) to 6.9 per cent of GDP, from 6.8 per cent estimated earlier.

The government has collected Rs 15.47 lakh crore in net tax revenue, which is 87.7 per cent of the full-fiscal target of Rs 17.65 lakh crore. Similarly, non-tax revenue collections stood at Rs 2.91 lakh crore till January, or 92.9 per cent of the RE target of Rs 3.13 lakh crore. However, the government has raised only Rs 12,423 crore from disinvestments so far this fiscal, against the revised target of Rs 78,000 crore. It has been banking on LIC IPO to meet the target. The government's total expenditure till January-end worked out to be Rs 28.09 lakh crore, as against the RE of Rs 37.70 lakh crore for the entire fiscal.

The CNX Nifty is currently trading at 16274.60, down by 223.45 points or 1.35% after trading in a range of 16233.50 and 16364.85. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.12%, Hindalco up by 1.39%, Tata Steel up by 0.92%, ITC up by 0.50% and JSW Steel up by 0.44%. On the flip side, Asian Paints down by 4.59%, Maruti Suzuki down by 3.46%, Hero MotoCorp down by 3.35%, Eicher Motors down by 2.54% and Mahindra & Mahindra down by 2.49% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 678.93 points or 2.55% to 25,898.34, Straits Times fell 15.81 points or 0.49% to 3,237.84, Hang Seng dropped 608.52 points or 2.71% to 21,858.82, Taiwan Weighted plunged 154.04 points or 0.86% to 17,780.36, KOSPI declined 33.49 points or 1.22% to 2,713.59 and Shanghai Composite was down by 22.81 points or 0.66% to 3,458.30. On the other hand, Jakarta Composite was up by 34.53 points or 0.50% to 6,902.93.