Markets trade over half percent lower in early deals; Reliance slips over 3%

Indian equity benchmarks made negative start of F&O series expiry week amid weakness in global peers. Markets are trading lower with over half a percent cut in early deals on Monday as investors cautiously await US Fed meeting which will set course for the global bourses in coming days. Sensex and Nifty were trading below 55,800 and 16,650 levels, respectively, with index heavyweight Reliance falling over 3%. Some cautiousness came in with a private report that Indian rupee may further depreciate to 82 to a dollar in the near term due to widening of trade deficit and expected aggressive rate hike by the US Fed later this week to tame record high inflation. Though, market participants failed to take any sense of relief with Finance Minister Nirmala Sitharaman’s statement that the trust-based taxation system introduced by the government has resulted in improved collections and increase in the number of return filings. Traders took note of Reserve Bank of India Governor Shaktikanta Das’ statement that the central bank will ensure that the economy has a soft landing wherein inflation is closer to 4 per cent, with minimal impact on growth.

Most of the Asian markets are trading lower, following the broadly negative cues from Wall Street on Friday, as worries about slowing growth and policy tightening weighed on the markets. Traders remained cautious and chose to take some profits ahead of this week's highly anticipated monetary policy decision by the U.S. Federal Reserve, which is widely expected to raise interest rates by at least 75 basis points as part of its ongoing efforts to combat elevated inflation.

Back home, banking stocks were in limelight with India ratings report that banks are unlikely to take a big hit on profitability this quarter due to rising bond yields, which may eat up 5.3 per cent (Rs 11,790 crore) of their net income in the worst-case scenario. In stock specific developments, ICICI Bank gained after net profit jumps nearly 50% YoY in Q1. On the other hand, Reliance Industries slipped after Q1 fell short of street estimates. Zomato hit a new 52-week low after one-year lock-in period for institutional investors of Zomato ended.

The BSE Sensex is currently trading at 55713.06, down by 359.17 points or 0.64% after trading in a range of 55703.63 and 56018.09. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.11%, while Small cap index was down by 0.29%.

The top gaining sectoral indices on the BSE were Metal up by 0.45%, Capital Goods up by 0.41%, Industrials up by 0.24%, Basic Materials up by 0.10%, Bankex up by 0.09%, while Energy down by 1.95%, Oil & Gas down by 1.45%, Healthcare down by 0.56%, IT down by 0.56%, Auto down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.95%, Indusind Bank up by 1.14%, Bharti Airtel up by 1.08%, ICICI Bank up by 0.61% and Larsen & Toubro up by 0.49%. On the flip side, Reliance Industries down by 3.55%, Mahindra & Mahindra down by 1.47%, Sun Pharma down by 1.38%, Tech Mahindra down by 1.36% and Dr. Reddy's Lab down by 0.99% were the top losers.

Meanwhile, expressing optimism over tax collection, Finance Minister Nirmala Sitharaman has said that the trust-based taxation system introduced by the government has resulted in improved collections and increase in the number of return filings. She also complimented the department for achieving the highest-ever revenue collection of over Rs 14 lakh crore in the last fiscal and expressed hope that the momentum would continue in the current fiscal too. Direct tax collections surged to Rs 14.09 lakh crore in 2021-22, registering a year-on-year growth of 49.02 per cent on the back of strong growth in mop-up from individual and corporation tax. For the current fiscal, the government has projected the direct tax collection at Rs 14.20 lakh crore.

The minister said the government has addressed several legacy issues and removed structural deficiencies related to direct taxes with a view to foster ease of living and ease of doing business. The reforms introduced by the government in recent years have ensured a trust-based tax system. She said ‘the taxpayers on their part have vindicated this trust-based approach as evident from the trend of improved tax collections and increase in the number of income tax returns filed’.

On the administration side, she said an effective use of technology has been made to enhance taxpayer services, minimise discretion in decision making and improve transparency, fairness and speed of departmental processes. She said the Income Tax Department must be appreciated for having successfully implemented the policy of reforms introduced over the last few years and for having effectively reoriented itself as a taxpayer-centric organisation. The finance minister also urged Income Tax Department to prepare itself for the next 25 years of growth.

The CNX Nifty is currently trading at 16629.40, down by 90.05 points or 0.54% after trading in a range of 16617.40 and 16706.05. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.02%, Tata Steel up by 1.76%, UPL up by 1.21%, Indusind Bank up by 1.19% and Larsen & Toubro up by 0.71%. On the flip side, Reliance Industries down by 3.43%, ONGC down by 2.30%, Mahindra & Mahindra down by 1.68%, Dr. Reddy's Lab down by 1.34% and Sun Pharma down by 1.33% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 197.71 points or 0.71% to 27,716.95, Hang Seng declined 173.95 points or 0.84% to 20,435.19, Taiwan Weighted lost 13.57 points or 0.09% to 14,935.79, Jakarta Composite fell 13.49 points or 0.20% to 6,873.47 and Shanghai Composite was down by 23.27 points or 0.71% to 3,246.70. On the other hand, Straits Times rose 11.52 points or 0.36% to 3,192.86 and KOSPI was up by 15.76 points or 0.66% to 2,408.90.