Hectic selling drags markets to day’s low points

Weak trade persisted over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading near their intraday low points, on the back of hectic selling at IT and TECK counters along with mixed cues from other Asian markets. Traders were cautious as Union Finance Minister Nirmala Sitharaman said that India remains concerned about the global economic outlook and geopolitical environment, despite this year's projected growth rate of over six percent for the country's economy. Some concerns also came as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report said that non-bank finance companies (including housing finance companies) are likely to face increased funding challenges in FY24, which is likely to impact their growth aspirations.

On the global front, Asian markets were trading mixed, even after export prices in South Korea were up 2.0 percent on month in March, accelerating from the 0.8 percent gain in February. On a yearly basis, export prices tumbled 6.4 percent after slipping 2.6 percent in the previous month. Individually, export prices for agricultural, forestry and marine products were down 2.3 percent on month and 6.6 percent on year, while manufacturing products rose 2.0 percent on month and fell 6.4 percent on year.

The BSE Sensex is currently trading at 60111.75, down by 281.02 points or 0.47% after trading in a range of 60099.09 and 60423.98. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell by 0.07%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Realty up by 0.77%, Consumer Durables up by 0.29%, FMCG up by 0.16%, Auto up by 0.09% and Bankex up by 0.04%, while IT down by 2.25%, TECK down by 2.07%, Capital Goods down by 0.93%, Oil & Gas down by 0.73% and Metal down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 0.93%, Asian Paints up by 0.65%, Power Grid Corporation of India up by 0.46%, Hindustan Unilever up by 0.43% and Maruti Suzuki up by 0.40%. On the flip side, Infosys down by 2.87%, Tech Mahindra down by 2.77%, HCL Technologies down by 2.72%, Larsen & Toubro down by 1.90% and NTPC down by 1.62% were the top losers.

Meanwhile, Paolo Mauro, Deputy Director of the International Monetary Fund (IMF) Fiscal Affairs Department has said that India is expected to have a stable debt-to-GDP ratio going forward and recommended rationalization and simplification of Goods and Services Tax (GST). He said there will be a gradual resumption of the rise in the global public debt-to-GDP ratio in the medium-term. He said ‘our baseline projection is for the global public debt-to-GDP ratio to reach 100 per cent again by 2028. It is going to take a few years, but that seems to be the direction of travel.’

Mauro said this year's Union Budget appropriately reduces the deficit and appropriately emphasizes infrastructure. He said the fact that the deficit is being reduced helps the Central Bank. Another good feature is that there is a reduction in subsidies that is coming from the unwinding of those exceptional measures that were taken during the pandemic.

On the fuel excise tax cuts that were introduced in early 2022, he said ‘it would be appropriate to reverse those again, because at some point, you don't want to be giving these generalized subsidies to everybody. It's important to support those who are truly needy but now not everybody.’ He noted that the other thing is to broaden the base for the corporate income tax and the personal income tax. He also cautioned that fiscal costs might emerge in the future.

The CNX Nifty is currently trading at 17737.50, down by 74.90 points or 0.42% after trading in a range of 17735.15 and 17827.85. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Apollo Hospitals Enterprise up by 2.70%, HDFC Life Insurance up by 2.58%, Eicher Motors up by 2.58%, Bajaj Finserv up by 0.91% and Asian Paints up by 0.65%. On the flip side, Infosys down by 2.89%, Tech Mahindra down by 2.72%, HCL Technologies down by 2.70%, Larsen & Toubro down by 1.91% and NTPC down by 1.59% were the top losers.

Asian markets were trading mixed; Taiwan Weighted lost 128.21 points or 0.81% to 15,804.76, Hang Seng declined 113.55 points or 0.56% to 20,196.31, Jakarta Composite plunged 20.35 points or 0.3% to 6,778.61 and Shanghai Composite weakened 10.69 points or 0.32% to 3,316.49, while Straits Times rose 5.57 points or 0.17% to 3,291.69, KOSPI increased 11.02 points or 0.43% to 2,561.66 and Nikkei 225 surged 74.27 points or 0.26% to 28,156.97.