We had mentioned in Friday’s closing report that Nifty, Sensex were highly overbought. The major indices of the Indian stock markets suffered a sharp correction on Monday to close more than 1.5% lower than Friday’s close. The trends of the major indices in the course of Monday’s trading are given in the table below:
The increased possibility of a US rate hike and a rout in Asian and European equities dragged the Indian markets down on Monday, as heavy selling pressure was witnessed in automobile, banking and capital goods stocks. The BSE market breadth was skewed in favour of the bears -- with 2,033 declines and 688 advances. On the NSE, on Monday there were 186 advances, 1,251 declines and 53 unchanged.
Tata Chemicals on Monday said that the company's fertiliser plant at Haldia, West Bengal is likely to be closed for 5 weeks in February-March 2017 due to "interruption in the supply of ammonia". The company had signed a MoU (Memorandum of Understanding) with Sanjana Cryogenics Storage (SCSL), its ammonia terminal operator, for rerouting a portion of the ammonia pipeline that runs from Haldia Dock to ammonia storage tank. The pipeline re-routing activity has been done at the directive of Kolkata Port Trust for facilitating the set up a Multi-Modal Terminal Hub at Haldia by Inland Waterways Authority of India (IWAI), the company said. "As per the current project status, the expected pipeline re-routing will be scheduled in the month of February-March, 2017 for about five weeks. Further updates in this regard will be provided when the actual shutdown of the Haldia plant for the above purpose is undertaken in February and March, 2017," the company said in a filing to Bombay Stock Exchange. The company’s shares closed at Rs530.35, down 5.17% on the BSE.
India's direct tax collection was up by 15.03% to Rs1.89 lakh crore while the indirect tax collection jumped by 27.5% to Rs3.36 lakh crore during the April to August period this year, an official statement said on Monday. "The figures for direct tax collections up to August 2016 show that net revenue collections are at Rs1.89 lakh crore which is 15.03% more than the net collections for the corresponding period last year," Finance Ministry said in a statement. The collection up to August 2016 indicates that 22.30% of the annual budget target of direct taxes has been achieved, it said. Refunds amounting to Rs77,080 crore have been issued during April-August 2016, which is 22.18% higher than the refunds issued during the corresponding period last year, it added. On indirect tax collection, the Finance Ministry statement said, "The figures for indirect tax collections (central excise, service tax and customs) up to August 2016 show that net revenue collections are at Rs3.36 lakh crore which is 27.5% more than the net collections for the corresponding period last year." The collection up to August 2016 indicates that 43.2% of the annual budget target of indirect taxes has been achieved, it said. The fiscal deficit of the Indian government and the interest rates as set by RBI (Reserve Bank of India), due to domestic compulsions, are unlikely to be a hindrance for the stock market’s upward trend.
State Bank of India (SBI) Chairperson Arundhati Bhattacharya says a 25 basis points cut in interest rates was in the offing and that an improvement in the financial health of India's banking sector was closely linked to the overall performance of the economy. In an interview to IANS, the 60-year-old banker also said the 4% inflation target fixed by the government is a tad low in an emerging economy like India where food inflation has rarely fallen below 6% in the past 60 years. Nonetheless, she felt the current inflation level is set to fall due to a statistical play that could pave the way for a cut in interest rates by commercial banks -- which the central bank has been asking for, as and when it has itself cut interest rates. "Inflation will start coming down because there was a base effect in the last two months, which was actually pushing inflation up. That effect will moderate in the coming months," she said referring to the current impact of a lower movement in price indices in the previous year. "So, I see no reason why we shouldn't be looking at a small rate cut this year." This decision is favourable for both borrowers and for investors in the Indian stock markets.
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below: