Benchmark indices pared opening gains to turn negative as IMF cut India’s GDP forecast to 6.6% from the previous 7.6%. The sentiment was also affected as dual-control issue was resolved in the GST Council meet yesterday and all agreed on July 1 as its date of implementation.
Global investors also await UK PM Theresa May’s Brexit speech. According to reports, she will lay out plan to exit the European Union that would see Britain lose access to the bloc’s single market.
At 12:30 pm, the S&P BSE Sensex was trading at 27,222 down 65 points, while the broader Nifty50 was ruling at 8,390, down 22 points.
“Nifty could witness termination near this resistance zone of 8,400-8,450 & a corrective wave could follow in the coming week. Hence we recommend reducing leveraged longs & deploying adequate hedge for a while,” said Sacchitanand Uttekar, Equity Technical Analyst & PFA at Motilal Oswal Securities in a note.
On Monday, foreign portfolio investors (FPIs) sold shares worth a net Rs 347.25 crore, while Domestic institutional investors (DIIs) bought shares worth a net Rs 203.45 crore, provisional data available with BSE showed.
Sectors and Stocks
Reliance Industries fell around 3% after the company reported below expectations earning report. It announced a 3.6% rise in its net profit in December quarter. The company reported a consolidated net profit of Rs 7,506 crore against Rs 7,245 crore in the same period a year ago.
Fortis Healthcare fell over 2% in an otherwise positive marktet after Daiichi Sankyo moved an application in Delhi High Court to block former Ranbaxy Lab promoters Malvinder and Shivinder Singh from selling their stake in Fortis Healthcare, marking a new twist in the Rs 2,500 crore arbitration case.
Delta corp rose 2% after reports that the company has received a licence for operations of a casino in Gangtok, Sikkim.
GST set for July 1 roll-out, dual control hurdle over
IMF cuts India’s GDP forecast
IMF has cut India’s GDP forecast to 6.6% for 2016 from its earlier estimate of 7.6% citing demonetisation’s effect on consumption and payments. If the projection holds true, the fastest growing large economy in the world would be China, estimated to grow 6.7% in 2016.
This comes after World Bank, last week, slashed India growth projection by 0.6 percentage points to 7% for the year, a shade lower than government’s 7.1% estimate.
For 2017, IMF projected a growth rate of 7.2% as against its previous forecast of 7.6%. The Indian economy is likely to revive to go back to its previously estimated growth rate of 7.7% in 2018, according to the World Economic Outlook update.
Asian stocks and the pound sagged on Tuesday as investors waited for British Prime Minister Theresa May to lay out plans to exit the European Union, which traders fear will see Britain lose access to the bloc’s single market.
Britain will not seek a Brexit deal that leaves it “half in, half out” of the EU, May will say later in the day, according to her office, in a speech setting out her 12 priorities for upcoming divorce talks with the bloc.
US stock futures dipped 0.3%. Wall Street was closed on Monday for Martin Luther King Day.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.1%, while Japan’s Nikkei brushed a five-week low and was last down 0.4%.