Benchmarks extend losses for third consecutive day

Indian equity benchmarks extended losses for third consecutive day on Monday amid weak global cues, following Silicon Valley Bank crisis. All sectors ended in red with banking and Telecom facing the major burnt, down over 2% each.  Markets opened positive as traders took some support with data showing that India’s industrial production growth perked up slightly to 5.2 per cent in January from 4.7 per cent in December 2022, mainly due to good performance of the power, mining and manufacturing sectors. Some support also came with the Central Board of Direct Taxes (CBDT) stating that net direct tax collection so far this fiscal grew 17 per cent to reach Rs 13.73 lakh crore, which is 83 per cent of the revised target for the full financial year. Traders also took a note of the Reserve Bank of India’s statement that India’s foreign exchange reserves rose by $1.46 billion to $562.4 billion as of March 3, arresting the four successive weeks of fall.

However, the indices soon gave up the initial gains and came under intense selling pressure in afternoon deals, as traders turned cautious with a private report that India’s retail inflation probably breached the central bank’s target for a second straight month in February, prompting the monetary authority to possibly hike borrowing costs to the highest level in seven years. India’s Consumer Price Index (CPI) data is to be out later in the day. Weakness also prevailed in the markets as foreign institutional investors (FII) net sold shares worth Rs 2,061.47 crore on March 10, according to the provisional data available on the NSE. Some anxiety also came amid a private report stating that the central government has placed strict conditions on states to avail of the Rs 1.3 trillion in long-term loans for their capital expenditure (capex) needs in the approaching fiscal year (2023-24, or FY24) to ensure effective utilisation of funds.

On the global front, European markets were trading lower as banks extended their worst two-day selloff in more than five months on concerns over the fallout from the Silicon Valley Bank (SVB) collapse and ahead of the ECB meeting and key U.S. inflation data due this week. Asian markets settled mostly higher even as a global sell-off in the wake of the Silicon Valley Bank (SVB) collapse and growing worries about the health of the U.S. financial system.

Finally, the BSE Sensex fell 897.28 points or 1.52% to 58,237.85 and the CNX Nifty was down by 258.60 points or 1.49% to 17,154.30.

The BSE Sensex touched high and low of 59,510.92 and 58,094.55, respectively. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.82%, while Small cap index was down by 2.08%.

The top losing sectoral indices on the BSE were Bankex down by 2.24%, Telecom down by 2.08%, Auto down by 2.00%, Realty down by 1.98% and Financial Services down by 1.93%, while there were no gaining sectoral indices on the BSE.

The lone gainer on the Sensex was Tech Mahindra up by 6.83%. On the flip side, Indusind Bank down by 7.46%, SBI down by 3.21%, Tata Motors down by 3.06%, Mahindra & Mahindra down by 2.57% and Bajaj Finserv down by 2.47% were the top losers.

Meanwhile, the Central Board of Direct Taxes (CBDT) has said that net direct tax collection so far this fiscal grew 17 per cent to reach Rs 13.73 lakh crore, which is 83 per cent of the revised target for the full financial year. The growth in direct tax mop-up, which comprises personal income tax and corporate taxes, was driven by PIT (Personal Income Tax) collections. On a gross basis, the collection grew 22.58 per cent to Rs 16.68 lakh crore.

Refunds amounting to Rs 2.95 lakh crore have been issued during April 1, 2022 to March 10, 2023, which are 59.44 per cent higher than refunds issued during the same period in the preceding year. Direct tax collection, net of refunds, stands at Rs 13.73 lakh crore which is 16.78 per cent higher than the net collections for the corresponding period of last year.

This collection is 96.67 per cent of the total budget estimates and 83.19 per cent of the total revised estimates of direct taxes for the financial year 2022-23. After adjustment of refunds, the net growth in CIT (Corporate Income Tax) collections is 13.62 per cent and that in Personal Income Tax collections including STT (Securities Transaction Tax) is 20.06 per cent.

The CNX Nifty traded in a range of 17,529.90 and 17,113.45. There were 4 stocks advancing against 45 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Tech Mahindra up by 6.86%, Apollo Hospital up by 0.74%, Britannia Industries up by 0.26% and ONGC up by 0.13%. On the flip side, Indusind Bank down by 7.33%, SBI down by 3.18%, Tata Motors down by 2.93%, Mahindra & Mahindra down by 2.75% and Adani Ports and SEZ down by 2.69% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 161.12 points or 2.08% to 7,587.23, France’s CAC fell 178.43 points or 2.47% to 7,042.24 and Germany’s DAX lost 399.55 points or 2.59% to 15,028.42.

Asian markets settled mostly higher on Monday with optimism that the US Federal Reserve might moderate its rate hikes, with private report saying they no longer expect the US Federal Reserve to hike interest rates at its March 22, 2023 meeting. Chinese shares surged after the Beijing government surprisingly kept the head of the central bank and the finance minister in their posts on Sunday. However, Japanese shares declined by tracking weakness in Wall Street shares last Friday on worries of financial contagion from the collapse of Silicon Valley Bank.