Markets end lower ahead of retail inflation data

Indian equity markets closed with losses of over half a percent on Monday, as investors remained on sidelines ahead to the India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out later in the day for more directional cues. Markets made a slightly positive start but quickly shed the gains and slipped gradually lower as trade elsewhere in Asia remained muted with most markets closed on account of the Lunar New Year. Sentiments remained down-beat as India Ratings and Research (Ind-Ra) in its latest report stated that sustained disruptions in the Red Sea route is likely to raise the freight and forwarding (F&F) cost by 25-30 per cent for corporates largely dealing in international trade. Traders took a note of Piyush Goyal’s statement that India may not get the same amount of foreign direct investment (FDI) in the current financial year as compared to FY23, but I don’t see it as a material factor. Muted Q3 earnings by ONGC and Tata Power Company also dented investor sentiment.

Traders overlooked Central Board of Direct Taxes’ (CBDT) statement that net direct tax collection so far in current fiscal grew 20 per cent year-on-year to Rs 15.60 lakh crore, which is 80 per cent of revised budget estimates for full fiscal year.  Traders also paid no heed towards the provisional data from the NSE showing that foreign institutional investors (FIIs) net bought shares worth Rs 141.95 crore on February 9. 

On the global front, European markets were trading mostly in green ahead of a busy week packed with earnings, economic data releases and speeches by Federal Reserve officials. Amid waning optimism over early Fed rate cuts, investors will scrutinize the January U.S. inflation data due on Tuesday for more clues on the Fed's rate trajectory. 

Back home, stocks related to fertilizer industry remained in watch as a private data showed that India’s urea production increased by over 12 per cent in the first nine months of the current financial year (FY24), while imports were marginally less than last year and sales remained flat. Urea is the largest consumed fertilizer in India followed by DAP. Sugar industry stocks also were in focus with report that the centre has released about Rs 15,948 crore under different schemes in the last five years till January 31 to various sugar mills to improve their liquidity for clearing cane price dues of farmers.

Finally, the BSE Sensex fell 523.00 points or 0.73% to 71,072.49 and the CNX Nifty was down by 166.45 points or 0.76% to 21,616.05.

The BSE Sensex touched high and low of 71,756.58 and 70,922.57, respectively. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.62%, while Small cap index was down by 3.16%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.32%, IT up by 0.25% and TECK up by 0.13%, while PSU down by 4.44%, Utilities down by 3.60%, Telecom down by 3.44%, Realty down by 3.01%, Industrials down by 2.92% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.26%, HCL Technologies up by 2.09%, Mahindra & Mahindra up by 0.80%, Infosys up by 0.61% and Tech Mahindra up by 0.48%. On the flip side, Tata Steel down by 2.76%, NTPC down by 2.72%, SBI down by 2.26%, Indusind Bank down by 2.20% and ITC down by 2.11% were the top losers.

Meanwhile, Central Board of Direct Taxes (CBDT) has said that net direct tax collection so far in current fiscal grew 20 per cent year-on-year to Rs 15.60 lakh crore, which is 80 per cent of revised budget estimates for full fiscal year.

It stated the provisional figures of direct tax collections continue to register steady growth. Direct tax collections up to 10th February, 2024 show that gross collections are at Rs 18.38 lakh crore, which is 17.30 per cent higher than the gross collections for the corresponding period of last year. Direct tax collection, net of refunds, till February 10 of FY24 stands at Rs 15.60 lakh crore, which is 20.25 per cent higher than the net collections in the corresponding period last year. This collection is 80.23 per cent of the total revised estimates of direct taxes for 2023-24.

It further said refunds amounting to Rs 2.77 lakh crore have been issued during April 1, 2023 to February 10, 2024. Gross revenue collections for Corporate Income Tax (CIT) and Personal Income Tax (PIT) also showed a steady growth. Growth rate for CIT was 9.16 per cent while for PIT, it was 25.67 per cent (PIT only). After adjustment of refunds, the net growth in CIT collections was 13.57 per cent and that in PIT was 26.91 per cent (PIT only).

The CNX Nifty traded in a range of 21,831.70 and 21,574.75. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.68%, Apollo Hospital up by 2.60%, Divi's Lab up by 2.28%, Wipro up by 2.18% and HCL Technologies up by 1.77%. On the flip side, Coal India down by 4.80%, Hero MotoCorp down by 4.27%, BPCL down by 3.89%, ONGC down by 3.66% and Tata Steel down by 2.69% were the top losers. 

European markets were trading mostly in green; France’s CAC rose 36.05 points or 0.47% to 7,683.57, Germany’s DAX gained 77.84 points or 0.46% to 17,004.34, while UK’s FTSE 100 decreased 11.23 points or 0.15% to 7,561.35.

Asian markets were mostly closed on Monday for the Chinese New Year. Stock markets in China, Hong Kong, Singapore, Malaysia, Taiwan and South Korea are closed for the Lunar New Year holiday and the Japanese stock market is closed for National Foundation Day holiday. Positive cues from Wall street overnight lifted Indonesian stock market sentiments. Bargain hunting after sell off amidst election panics also supported the upmove.

Jakarta Composite lifted by 36.65 points or 0.50% to 7,271.80.