Share markets in India finished the day on a negative note as Finance Minister Arun Jaitley tabled Economic Survey for 2016-17. The Survey has projected the growth rate for the current fiscal at 6.5%, lower than 7.1% projected by Central Statistics Office earlier this month. It outlined three main downside risks to the FY18 GDP growth forecast adding that demonetisation, rise in oil prices and global trade tensions will affect the growth forecast.
NSE Nifty slipped 71.45 points or 0.83 percent to 8561.30, while BSE Sensex was down 193.60 points or 0.70 percent at 27655.96.
Tata Consultancy Services Ltd ended at Rs 2229.9, down by Rs 104.3 or 4.47% from its previous closing of Rs 2334.2 on the BSE.
The fiscal deficit target for FY18 is 3 percent of GDP, but most economists are expecting Jaitley to set a target anywhere between 3.0-3.5 percent, as the government looks to revive demand in the wake of demonetisation.
The Survey says India would grow at 6.75-7.5 percent in 2017-18, tempering expectations of an early revival in the broader economy still reeling under the effects of demonetisation.
Other major expectations from the Budget are that Jaitley may provide stimulus to the economy to counter any slowdown caused by demonetisation, widen social sector schemes, ease income tax rules and attempt to give a boost to areas such as digital payments, infrastructure and affordable housing.
The broader markets underperformed benchmarks, falling nearly a percent on weak breadth. More than two shares declined for every share rising on the Bombay Stock Exchange.
Technology stocks hit hard today after a legislation has been introduced in the US House of Representatives which among other things calls for more than doubling the minimum salary of H-1B visa holders to USD 130,000, making it difficult for firms to use the programme to replace American employees with foreign workers, including from India. TCS was down 4.6 percent and Infosys fell 2 percent. Tech Mahindra plunged 4 percent.
Shares of ICICI Bank fell 0.66 percent ahead of quarterly earnings that announced after market hours. Profit plunged 19 percent but surpassed analysts’ expectations due to lower provisions and tax cost while asset quality worsened further. Idea Cellular surged further, up by 12.5 percent on top of 26 percent rally seen yesterday after the company and Vodafone confirmed talks of merger.
Telecom tower infrastructure services provider fell 10.7 percent, in addition to 7 percent decline in previous session. CLSA downgraded the stock to outperform from buy and also cut target price to Rs 356 (from Rs 450 earlier) to factor in a weaker growth outlook.
“A potential merger of Idea Cellular and Vodafone India is likely to impact Bharti Infratel in both the short term and long term. In the short term, site rationalisation by the merged entity could potentially lead to a loss of 14,000 tenancies for Indus Towers and 4,000 tenancies for Bharti Infratel, which in turn could impact our EBITDA estimates by around 7 percent. In the long term, we believe the merger also dampens the tenancy growth outlook for Bharti Infratel and raises questions on its ability to boost its tenancy ratio,” the brokerage house says.
Tata Motors was down 1.7 percent as subsidiary Jaguar Land Rover will recall 6,438 vehicles in China due to defective safety belts.
Bajaj Auto gained 0.4 percent after better-than-expected earnings in Q3. Profit came in at Rs 924.6 crore (down 4.7 percent YoY) against estimates of Rs 888 crore.
The rupee was trading at 67.86 per US dollar.
There were 384 advances, 1243 declines and 283 unchanged stocks on NSE, reflective of a strong negative bias floating in the market.
Top 5 Nifty Gainers: ITC LTD (0.88%), Bajaj Auto (0.72%), Bharti Airtel (0.43%), Dr. Reddys Lab (0.30%), and HDFC Bank (0.25%).
Top 5 Nifty Losers: TCS (-4.46%), GAIL (-3.55%), Adani Ports & Sez (-3.10%), Sun Pharma (-2.23%) and Tata Motors (-1.97%)
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