Indian equity benchmarks were traded in lacklustre mood and ended with losses on Monday dragged down by losses in index heavyweights SBI, Reliance Industries, Mahindra & Mahindra amid a largely subdued trend in global markets. Indian markets started the day marginally in red, as fears of a third wave and the spread of Delta and Delta plus variant dampened sentiments in markets. However, markets traded flat with a positive bias in morning deals as Commerce and Industry Minister Piyush Goyal expressed confidence that India will continue to attract high foreign direct investment (FDIs) in the current financial year. Traders took some support as ICRA Ratings in its latest report stated that the government is set to exceed the budgeted tax collection target of Rs 22.2 lakh crore for 2021-22, led by indirect taxes, primarily taxes on petroleum products. Some support also came as investments in the Indian capital markets through participatory notes (P-notes) rose to Rs 92,261 crore till the end of June, making it the highest level in 37 months. This also marks the third consecutive monthly growth.
But, markets erased gains and continued their lackluster trade in afternoon session, as traders were worried with report by Omidyar Network India and Crisil stating that the second COVID-19 wave has intensified pressure points for small and mini NBFCs, as they did not get the benefit of the RBI's liquidity measures announced last year. Some concern also came with reports that foreign portfolio investors (FPIs) offloaded Indian equities to the tune of over Rs 5,689 crore in July so far as they continued to adopt a cautious stance in view of various domestic and global factors. During July 1-23, FPIs took out Rs 5,689.23 crore from equities, as per depositories data. Meanwhile, the provisional commerce ministry data showed that the country's exports grew 45.13 per cent to $22.48 billion during July 1-21 on account of healthy growth in sectors such as gems and jewellery, petroleum and engineering. Imports also rose 64.82 per cent to $31.77 billion in the said period, leaving a trade deficit of $9.29 billion.
On the global front, Asian markets settled mostly lower on Monday as Beijing's widening technology-sector crackdown overshadowed investor optimism over economic and earnings growth. Investors also turned their attention to the U.S. Federal Open Market Committee meeting this week for clues on the timing of stimulus tapering. European markets were trading lower, as a survey showed German business confidence weakened unexpectedly in July. German business sentiment index fell to 100.8 in July from a revised 101.7 in June. The score was forecast to rise to 102.1 from June's initially estimated value of 101.8. Rising COVID-19 infections also dented sentiment, with Russia's total virus cases surpassing 6 million and Turkey reporting a tripling of cases on Sunday compared with earlier this month.
Finally, the BSE Sensex fell 123.53 points or 0.23% to 52,852.27, while the CNX Nifty was down by 31.60 points or 0.20% to 15,824.45.
The BSE Sensex touched high and low of 53,103.42 and 52,783.63, respectively and there were 12 stocks advancing against 18 stocks declining on the index.
The broader indices ended in green; the BSE Mid cap index rose 0.06%, while Small cap index was up by 0.34%.
The top gaining sectoral indices on the BSE were Basic Materials up by 0.83%, Consumer Durables up by 0.68%, Healthcare up by 0.62%, Metal up by 0.62% and IT up by 0.26%, while Energy down by 1.09%, Realty down by 0.76%, Power down by 0.75%, Auto down by 0.73% and Telecom down by 0.66% were the top losing indices on BSE.
The top gainers on the Sensex were Bajaj Finserv up by 2.46%, Ultratech Cement up by 1.55%, Sun Pharma up by 1.38%, Titan Company up by 1.29% and Tata Steel up by 1.26%. On the flip side, SBI down by 1.36%, Reliance Industries down by 1.31%, Mahindra & Mahindra down by 1.24%, Tech Mahindra down by 0.91% and Larsen & Toubro down by 0.88% were the top losers.
Meanwhile, with the first quarter of current fiscal gross tax mop-up reaching Rs 5.6 lakh crore, ICRA Ratings in its latest report has said that the government is set to exceed the budgeted tax collection target of Rs 22.2 lakh crore for 2021-22, led by indirect taxes, primarily taxes on petroleum products. However, it said despite the second wave of the pandemic, the April-June quarter tax collections rose to Rs 5.6 lakh crore, which is 39 per cent higher than Q1 of FY20. As stated differently, this is 107 per cent more than Q1 of FY21 and 25.1 per cent of the full-year target.
According to the report, the first quarter is traditionally moderate for tax collection, as the economic activity remains tepid. The revenue department is yet to officially release tax collection data, but the finance ministry informed the Lok Sabha on July 19 that Q1 tax revenue mop-up reached Rs 5.6 lakh crore. The ministry also informed the House that the excise duty on petrol and diesel fetched Rs 94,181 crore in Q1.
The report stated that Q1 collections at Rs 5.6 trillion is 107 per cent higher than Rs 2.7 lakh crore in Q1 of FY21, when the whole country was under lockdown last year. But more meaningfully, this is a full 39 per cent more than the pre-COVID level in Q1 of FY20. It further said while corporation tax, personal income tax and Central GST receipts in Q1 stood at 21-22 per cent of the budget estimates, excise and customs collections already crossed 30 per cent of the budget estimate, boosted by the high taxes on fuels as well as a relatively faster recovery in international trade.
The CNX Nifty traded in a range of 15,893.35 and 15,797.00 and there were 20 stocks advancing against 30 stocks declining on the index.
The top gainers on Nifty were SBI Life Insurance up by 3.96%, Bajaj Finserv up by 2.38%, Hindalco up by 1.88%, Divi's Lab up by 1.87% and Ultratech Cement up by 1.73%. On the flip side, JSW Steel down by 1.80%, Wipro down by 1.54%, Reliance Industries down by 1.51%, SBI down by 1.41% and BPCL down by 1.28% were the top losers.
European markets were trading lower; UK’s FTSE 100 decreased 19.49 points or 0.28% to 7,008.09, France’s CAC decreased 18.30 points or 0.28% to 6,550.52 and Germany’s DAX decreased 68.02 points or 0.43% to 15,601.27.
Asian markets settled mostly lower on Monday, while investors eyeing to the US Federal Open Market Committee meeting this week for clues on the timing of stimulus tapering. Chinese shares ended lower amid concerns over crackdowns by Beijing on the nation’s industries from tech to real estate and education firms. However, Japanese shares gained after a four-day weekend as the Olympic Games began, a year late, but concerns over surge in corona virus infections limited gains. The manufacturing sector in Japan continued to expand in July, albeit at a slower pace, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 52.2, down from 52.4 in June.
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