Indian equities end in negative territory on Monday

Indian equity markets pared most of their losses but ended in negative territory on Monday tracking weakness in the global market. Markets started the week with nearly half a percent cut, as traders were anxious as the Reserve Bank of India's (RBI) weekly statistical supplement showed that India's foreign exchange reserves fell to $532.66 billion in the week through Sept. 30, their lowest level since July 2020. Sentiments remained downbeat as private report projected a sharp moderation in India's growth rate for FY24 to 5.2 percent as compared to FY23, saying Indian policymakers are 'misplaced' about their optimism on the country's growth prospects. Traders took note of Union Finance Secretary T V Somanathan’s statement that India has a nano demographic window to achieve developed country status, and if it misses, it may not reach there. He said the country has to grow at a rate of 8-8.5 per cent to reach developed country status.

However, markets managed to trim most of their losses in late afternoon deals, taking support from Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal’s statement that India will perhaps emerge as the strongest major economy with 7 per cent growth rate in FY23, amid fears of the world slipping into recession. Some support also came after the Central Board of Direct Taxes (CBDT) has said that gross collection of tax on corporate and individual earnings jumped nearly 24 percent so far in the current fiscal year that started on April 1, 2022. Besides, after withdrawing over Rs 7,600 crore last month, foreign investors have resumed buying Indian stocks and have invested more than Rs 2,400 crore in the domestic equity markets in the first week of October. But, key gauges ended lower amid reports that exporters are keeping their fingers crossed due to ‘visible’ recessionary trends in the European Union (EU) as it could affect demand for domestic goods in that market in the coming months.

On the global front, Asian markets settled lower on Monday as better-than-expected U.S. jobs data released on Friday cemented bets of more large Federal Reserve rate hikes. Lingering worries surrounding the Russia-Ukraine war and the U.S.-China chip war also dented sentiment. European markets were trading mostly in red amid heightened geopolitical tensions and expectations that the Federal Reserve will move ahead with further interest rate hikes.

Back home, metal stocks were in focus with a private report stating that India's crude steel output rose by 2.56 per cent to 30.06 million tonne (MT) during the July-September period of the ongoing financial year.  Road and infrastructure industry stocks remained in limelight as government report stated that the road transport and highways sector has the maximum number of delayed projects at 248, followed by railways at 116 and petroleum sector at 88.

Finally, the BSE Sensex fell 200.18 points or 0.34% to 57,991.11 and the CNX Nifty was down by 73.65 points or 0.43% to 17,241.00.

The BSE Sensex touched high and low of 58,125.01 and 57,365.68, respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.87%, while Small cap index was down by 0.58%.

The few gaining sectoral indices on the BSE were IT up by 0.91%, TECK up by 0.73%, while Consumer Durables down by 1.43%, Power down by 1.30%, Utilities down by 1.12%, FMCG down by 1.01% and Realty down by 0.98% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.76%, TCS up by 1.84%, Maruti Suzuki up by 0.94%, Wipro up by 0.77% and Infosys up by 0.75%. On the flip side, Asian Paints down by 1.99%, Titan Company down by 1.86%, ITC down by 1.80%, Reliance Industries down by 1.13% and HDFC Bank down by 1.06% were the top losers.

Meanwhile, the Central Board of Direct Taxes (CBDT) has said that gross collection of tax on corporate and individual earnings jumped nearly 24 percent so far in the current fiscal year that started on April 1, 2022. CBDT said direct tax collection came at Rs 8.98 lakh crore between April 1 to October 8, 2022, 23.8 percent higher than the gross collection in the corresponding period a year ago. Tax on corporate and individual income makes up for direct taxes. The gross collection of taxes on corporate earnings rose 16.74 percent from April 1 to October 8, while personal income tax collection jumped 32.30 percent.

After adjusting refunds, direct tax collection stood at Rs 7.45 lakh crore, 16.3 percent higher than the net collection for the corresponding period a year ago. This collection is 52.46 percent of the total Budget Estimates of Direct Taxes for FY 2022-23. Tax collection is an indicator of economic activity in any country. But in India, the robust tax collection was despite a slowdown in industrial production and exports.

It further said that so far as the growth rate for corporate income tax (CIT) and personal income tax (PIT) in terms of gross revenue collection is concerned, the growth rate for CIT is 16.73 percent, while that for PIT (including STT) is 32.30 percent. After the adjustment of refunds, the net growth in CIT collection was 16.29 percent, and that in PIT collection was 17.35 percent (PIT only)/16.25 percent (PIT including STT). Refunds amounting to Rs 1.53 lakh crore have been issued during the period April 1, 2022, to October 8, 2022, 81 percent higher than the refunds issued during the same period in the preceding year.

The CNX Nifty traded in a range of 17,280.15 and 17,064.70. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.04%, TCS up by 1.93%, HDFC Life Insurance up by 1.22%, Wipro up by 1.18% and Eicher Motors up by 1.13%. On the flip side, Tata Motors down by 3.79%, Tata Consumer Product down by 2.84%, Hero MotoCorp down by 2.03%, Asian Paints down by 1.91% and ITC down by 1.78% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 22.60 points or 0.32% to 6,968.49 and France’s CAC decreased 19.82 points or 0.34% to 5,847.12, while Germany’s DAX increased 63.64 points or 0.52% to 12,336.64.