Indian equity benchmarks erased all the gains to turn negative in late afternoon session. Traders were seen piling up positions in Power, IT and Utilities sector while selling was witnessed in Realty, Telecom and Healthcare sector stocks. Traders were concerned, as Reserve Bank of India said that the second wave of COVID-19 pandemic has triggered revision of growth projections for the current financial year with consensus gravitating towards its earlier forecast of 10.5 per cent. Reserve Bank’s projection 10.5 per cent for the year 2021-22 -- 26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4. Traders overlooked that government may at the beginning of the unlock phase announce another stimulus package for the most hit sectors such as small business and self-employed.
On the global front, Asian markets were trading mixed ahead of key data on the world’s biggest economy. Treasury yields were steady and the dollar slipped. European markets were trading mostly in red, as investors awaited key U.S. labour data. Back home, automobile sector remained in focus, as ratings agency ICRA has said the electric two and three-wheelers volume are expected to account for 8-10 per cent and 30 per cent of new vehicle sales in the country by 2025, respectively, due to low operating cost and attractive subsidy support, among others.
The BSE Sensex is currently trading at 50,968.93, down by 48.59 points or 0.10% after trading in a range of 50917.59 and 51217.96. There were 12 stocks advancing against 18 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index gained 0.37%, while Small cap index was up by 0.42%.
The top gaining sectoral indices on the BSE were Power up by 1.00%, IT up by 0.81%, Utilities up by 0.77%, Basic Materials up by 0.74% and Consumer Durables was up by 0.71%, while Realty down by 1.21%, Telecom down by 0.46%, Healthcare down by 0.28%, Consumer Discretionary down by 0.03% were the top losing indices on BSE.
The top gainers on the Sensex were Ultratech Cement up by 1.50%, Kotak Mahindra Bank up by 1.47%, TCS up by 1.32%, Axis Bank up by 1.12% and SBI up by 1.10%. On the flip side, HDFC down by 2.46%, Bajaj Finance down by 1.80%, Sun Pharma down by 1.22%, ONGC down by 1.15% and Bajaj Finserv down by 1.07% were the top losers.
Meanwhile, the shortfall in Goods and Services Tax (GST) compensation payable to states in the current fiscal (FY22) is estimated at Rs 2.69 lakh crore, of which Rs 1.58 lakh crore would have to be borrowed this year. The Centre expects to collect over Rs 1.11 lakh crore through cess on luxury, demerit and sin goods which will be given to the states to compensate them for the shortfall in revenue arising out of GST implementation. The remaining Rs 1.58 lakh crore would have to be borrowed to meet the promised compensation to states under the GST regime.
As per the agenda note shared with states ahead of the GST Council meeting, the Centre estimates that although the GST revenues may see a recovery in the current financial year, there will still be a gap between the compensation need and amount raised through cess. The 2021-22 Budget had assumed 17 per cent growth in GST revenues, translating into monthly gross GST revenue of Rs 1.1 lakh crore. Based on this assumption, it has been estimated that for the period February 2021 to January 2022, the gap between protected revenue and the actual revenue after release of compensation would be around Rs 1.6 lakh crore.
In the last fiscal 2020-21, the Centre had borrowed on behalf of the states and released Rs 1.10 lakh crore to compensate them for the GST revenue shortfall. Another Rs 68,700 crore was collected by way of levy of cess. The GST Council is going to meet for the first time in more than seven-and-a-half months, on May 28, 2021.
The CNX Nifty is currently trading at 15,291.50, down by 9.95 points or 0.06% after trading in a range of 15278.60 and 15365.10. There were 24 stocks advancing against 26 stocks declining on the index.
The top gainers on Nifty were Shree Cement up by 1.96%, Wipro up by 1.75%, Ultratech Cement up by 1.49%, Kotak Mahindra Bank up by 1.44% and TCS up by 1.36%. On the flip side, HDFC down by 2.45%, Bajaj Finance down by 1.85%, ONGC down by 1.19%, Sun Pharma down by 1.15% and Bajaj Finserv down by 1.03% were the top losers.
Asian markets were trading mixed, Nikkei 225 slipped 93.18 points or 0.33% to 28,549.01, Hang Seng decreased 52.81 points or 0.18% to 29,113.20, Taiwan Weighted dropped 42.08 points or 0.25% to 16,601.61 and KOSPI was down by 2.92 points or 0.09% to 3,165.51. On the flip side, Shanghai Composite gained 15.49 points or 0.43% to 3,608.85, Straits Times advanced 19.69 points or 0.63% to 3,165.78 and Jakarta Composite was up by 25.99 points or 0.45% to 5,841.83.
European markets were trading mostly in red, UK’s FTSE 100 decreased 0.71 points or 0.01% to 7,026.22 and Germany’s DAX was down by 54.74 points or 0.35% to 15,395.98. On the flip side, France’s CAC was up by 20.85 points or 0.33% to 6,412.45.