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5
February 2018
I The
major Indian stock indices continued their slide on Monday losing just one
percent (0.85%) over Friday’s closing.
The
government was quick to deny that the fall has anything to do with the budget
and Finance Minister Arun Jaitley attributed it to “weak global cues”. There is
some merit in this, although investors continue to chafe at the 10% Long Term
Capital Gains (LTCG) tax that was reimposed through the Union Budget on
February 1. The fact is that a combination of factors including, weak global cues,
the LTCG tax effect, increase in fiscal deficit and selling pressure in capital
goods, banking and finance stocks led to the continued decline in stock
indices.
On
the NSE, there were 530 advances, 869 declines and 21 unchanged. The trends of
the major indices in the course of Monday’s trading are given in the table
below: The Total Investment & Insurance Solutions
 |
Major Indices (The Total
Investment & Insurance Solutions)
On
the positive side, the global credit rating major, Moody’s echoed Finance
Minister Arun Jaitley's description of the widening fiscal deficit in budget
2018-19 as combining fiscal prudence with growth needs. Moody's on Monday
said the "slight" slippage in fiscal deficit would have no overall
material impact on the country's fiscal strength and is in line with its
expectations.
Mr
Jaitley had revised the fiscal deficit target for 2017-18 upward to 3.5% of the
GDP, or the equivalent of Rs5.95 lakh crore as against the target of 3.2% -- or
Rs5.46 lakh crore -- for the current fiscal that had been announced earlier.
"This
slippage has no material impact on India's overall fiscal strength although
some measures such as the rise in Minimum Support Prices (MSPs) and ambitious
GST revenue targets could result in some further slippage," Moody's
Investor Service said in a statement.
Healthy
demand conditions pushed Indian services sector's output higher during January
2018, key macro-economic data showed on Monday. Accordingly, the seasonally adjusted
Nikkei India Services PMI Business Activity Index registered an overall
increase from 51.7 in January to 50.9 in December, as the "Information
& Communication" sub-sector continued to drive overall growth. An
index reading of above 50 indicates an overall increase in economic activity
and below 50 an overall decrease. However, higher Services PMI figure was
unable to arrest the fall in the overall private sector's output during
January, as manufacturing production growth eased. Consequently, the seasonally
adjusted Nikkei India Composite PMI Output Index declined to 52.5 in January
from 53 in December. While commenting on the Indian Services PMI survey data,
Aashna Dodhia, Economist at IHS Markit, and author of the report said:
"The recovery across India's service sector continued during January, with
growth in output picking up to the joint-strongest since June 2017 as
underlying demand conditions improved." "Meanwhile, job creation
accelerated to the second strongest in over six-and-a-half years, but, as firms
struggled in receiving timely payments, the Goods and Services Tax (GST)
continued to be a key constraint to businesses and the service sector remained
a laggard relative to its manufacturing counterpart." The Total Investment & Insurance Solutions
Eicher
Trucks and Buses on Monday launched its first electric bus "Skyline Pro
E". According to the company, the new electric bus model is powered by an
indigenously developed "Revolvo" electrification technology.
"The Smart Electric Skyline Pro E buses are certified to ply on Indian
roads and we are confident they will bring great value to commuters, city
transportation corporations and other organizations in this ecosystem,"
Vinod Aggarwal, MD and CEO, VE Commercial Vehicles said. The company said that
the bus has been manufactured at the Indore manufacturing facility of VE
Commercial Vehicles. Eicher Motors shares closed at Rs27,537.95, down 0.50% on
the NSE.
With
the annual retail inflation rate breaching the 5% mark in December and going
over the RBI's median level of 4%, the central bank is widely expected of keep
its key interest rate on hold for the fourth time in succession at its final
bi-monthly monetary policy review of 2017-18 on Wednesday. But there are also
concerns that RBI could also opt for a rate hike given the inflationary push
due to higher minimum support prices for farmers announced in the union budget.
ASSOCHAM, an industry mouth piece has already put out a statement asking the
central bank not to “over-react to the high yield pressures of the bond market”
and announce a hike in benchmark lending rates.
Bharti
Airtel on Monday announced that Singapore Telecommunications Limited would
invest Rs2,649 crore in Bharti Telecom, the promoter company of Airtel through
preferential allotment of shares. With this investment, Singtel's total stake
(along with its affiliates) in Bharti Telecom would increase to 48.90%. Singtel
currently holds 47.17% stake in Bharti Telecom. Bharti Enterprises continues to
hold over 50% stake in Bharti Telecom. The transaction is subject to the shareholders'
approval of Bharti Telecom. The funds raised would be used towards debt
reduction, the company statement said here. "Airtel shares a nearly two
decade-long relationship with Singtel, which has only become stronger over the
years. Bharti Airtel shares closed at Rs440.20, up 4.98% on the NSE.
Meanwhile,
Union Bank of India reported a net loss of Rs1,250 crore for the third quarter
of 2017-18, against a net profit of Rs104 crore in the corresponding period of
2016-17. "Net loss for October-December 2017 stood at Rs1,250 crore. This
includes investment depreciation of Rs700 crore and Rs991 crore of additional
provision for 18 accounts referred to National Company Law Tribunal (NCLT), as
per RBI list-II," the company said in a BSE filing. "The bank has
provided entire amount of additional provision for NCLT accounts up front which
was to be spread till March 2018." Further, the company's net interest
income for October-December 2017 quarter increased to Rs2,548 crore from
Rs2,136 crore earned during the year ago period. The bank’s shares closed at
Rs126.65, down 0.59% on the NSE. The Total
Investment & Insurance Solutions
The
top gainers and top losers of the major indices are given in the table below: The Total Investment & Insurance Solutions
 |
Top Gainer (The Total
Investment & Insurance Solutions)
The
closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions
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| Asian Indices (The Total Investment & Insurance Solutions) |
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