Benchmarks end lower as govt lowers FY13 GDP forecast

Indian equity indices continued their fall for yet another day on Thursday with both the indices snapping the session below their crucial 5,950 (Nifty) and 19,600 (Sensex) levels. Frontline gauges, after a negative start, regained some strength supported by buying in software and technology counters on the back of positive economic data in the US, the biggest outsourcing market for the Indian IT firms. But, all the efforts turned  futile after the Central Statistical Office (CSO) in the advance estimates shockingly pegged country’s Gross Domestic Product (GDP) growth rate for the current fiscal year to 5 per cent versus 6.2 per cent for 2011-12, lowest in a decade, on account of poor performance of manufacturing, agriculture and services sector. The estimate by CSO were drastically lower than what has been projected so far by the government and Reserve Bank of India (RBI). Cautiousness was also seen in the market as net direct tax collections during April-January this fiscal saw a slower pace of growth at 12.49 per cent as against the budgeted annual target of 15 per cent.

Selling at home got intensified after European counters witnessed flat trade in the opening deals on Thursday on mixed earnings and concerns over economic and political developments in the euro zone. Asian counters too traded choppy and ended the session mostly in the red terrain with Japanese Nikkei losing the most, as traders booked profit after last session’s rally. Investors also remained cautious ahead of European Central Bank (ECB) policy decision and remarks from ECB president Mario Draghi on prospects for the euro zone economy.

Back home, sentiment took a hit for the worst after some report suggested that country’s economic growth is likely to have eased further to around 4.8% in the quarter ending December, mainly as a result of deep cuts in government spending. Some pressure also came in from gold loans related stocks like Manappuram Finance and Muthoot Finance which declined in early trade as the working group set up by the Reserve Bank of India has suggested banks to increase their gold jewellery loans portfolio to curb large imports of gold. Sentiments also got dampened after upstream oil marketing companies declined after ONGC and Cairn India reported higher subsidy burden. The subsidy burden of ONGC, India’s biggest oil explorer, is set to cross Rs 50,000 crore this fiscal - the highest ever.

The NSE’s 50-share broadly followed index Nifty declined by twenty points to end below the psychological 5,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by about sixty points to finish below the psychological 19,600 mark. Moereover, broader markets too traded in the red throughout the session and ended the session with a cut of about a percent. The market breadth remained in favor of advances as there were 799 shares on the gaining side against 1,378 shares on the losing side while 786 shares remain unchanged.

Finally, the BSE Sensex lost 59.40 points or 0.30% to settle at 19580.32, while the S&P CNX Nifty declined by 20.40 points or 0.34% to end at 5,938.80.

The BSE Sensex touched a high and a low of 19702.56 and 19540.08, respectively. The BSE Mid cap index down by 0.88% and Small cap index was down by 1.34%.

The top gainers on the Sensex were, Mahindra & Mahindra up by 1.26%, TCS up by 1.20%, Tata Motors up by 0.89%, Infosys up by 0.56% and Coal India up by 0.47%, while Sterlite Industries down by 2.92%, NTPC down by 2.72%, Cipla down by 2.61%, GAIL India down 2.29% and Bharti Airtel down by 2.08% were the top losers on the index.

The top gainers on the BSE Sectoral space were, IT up 0.63%, Auto up 0.30% and FMCG up 0.03%, while Consumer Durables down 3.34%, Realty down 1.47%, Power down 1.39%, Metal down 1.16% and Capital Goods down 1.12% were top losers on the sectoral space.

Meanwhile, reflecting the impact of economic slowdown, net direct tax collection grew by just 12.49 percent to Rs 3.90 lakh crore in the April-January period of FY 13 from Rs 3.46 lakh crore in the same period of corresponding year, which is less than the annual budgeted target of 15 percent.  Lower than expected growth in corporate tax collection in April-January period is mainly due to the muted corporate activity and as industrial output growth declined by 0.1 percent in November.

Worried over the widening fiscal deficit, the government has earlier issued a strict warning to tax evaders and asked them to disclose their correct income and pay advance tax by the due date otherwise be prepared to face legal action. The government has also warned the evaders of excise, customs and service taxes to pay their dues or face penal action which could include prosecution, arrest and property attachment.

Meanwhile, in April-January period of FY13,  the collection from personal income tax was up by 13.81 percent at about Rs 1.58 lakh crore , while the corporate tax collection was up 3.71 percent at Rs 2.96 lakh crore. The growth in wealth tax was up 2.85 percent at Rs 685 crore. However, the collection from Securities Transaction Tax (STT) dropped by 9.99 percent to Rs 3,731 crore during the April-January period of FY13.

The S&P CNX Nifty touched a high and a low of 5,978.50 and 5,927.60 respectively.

The top gainers on the Nifty were PowerGrid up by 2.42%, IDFC up by 1.75%, M&M up by 1.37%, ACC up by 1.19% and TCS up by 1.13%.

The top losers of the index were Reliance Infra down by 4.63%, Sesa Goa down by 3.01%, Bank of Baroda down by 2.94%, Ambuja Cement down by 2.84% and NTPC down by 2.70%.

The European markets were trading in green, France’s CAC 40 up by 0.37%, United Kingdom’s FTSE 100 up by 0.09% and Germany’s DAX up by 0.35%.

Most Asian stock markets ended lower ahead of release of economic data from China on Friday. Japan’s Nikkei went home with red mark reacting to a slight strengthening in the yen against U.S dollar. Investors were traded cautiously ahead of European Central Bank (ECB) policy decision and remarks from ECB president Mario Draghi on prospects for the euro zone economy. Shanghai shares closed the shutter on negative note taking a break after eight-day’s rising streak, as investors took some profits on Chinese financials after the central bank stressed the need to tackle inflation and speculative housing demand.

Taiwan Weighted was shut for the trade today.