ALSO READSensex hovers around 28,000, Midcaps fall; Infosys, TCS up 2% Sensex drops 200 points; financials drag, TCS dips 2% ahead of Q2 nos Markets trim some losses as FM tables Economic Survey Sensex dips over 100 points, Nifty below 8,700; Tata group scrips, HDFC drag Markets remain subdued; Tata Motors rises 2% ahead of Q1 nos
Benchmark indices settled the day lower for the second consecutive session with the Nifty ending below 8,600 level after Economic Survey noted that the FY17 GDP growth will dip to 6.5% from 7.6% in FY16.
Steep fall in IT index also contributed to the losses after Donald Trump government introduced a bill in the US Congress that attempts to reform the H1-B visa process. The bill proposes to more than double the minimum wage for visa holders from $60,000 to $130,000.
The S&P BSE Sensex settled the day at 27,656, down 194 points, while the broader Nifty50 ended at 8,561, down 71 points.
In the broader market, BSE Midcap and BSE Smallcap indices slipped 1.1% each.
"Economic survey has given a cautious outlook for FY18 GDP growth considering the risk of demonetisation, subdued credit growth, rise in commodity prices and weaker external environment. This gives an alert that tomorrows budget could also be a measured one. IT stocks were the laggards today due to the policy effect on US H1B visa norms," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Service in a note.
Sectors and Stocks
IT sector cracked during the day after on visa fears as the H1B visa bill was introduced in the House of Representatives.
Nifty IT ended 3.2% lower, becoming the worst performing sectoral index. The index saw the biggest intra-day loss today since January 6. It shed 5.8% this month.
All the IT stocks were trading in red, with TCS dragging the pack, down 4.6%. Tech Mahindra, HCL Tech, Wipro and Infosys fell between 2-4.3% on NSE.
Idea Cellular extended gains to rise over 12% to Rs 110.35 on BSE as investors believe the merger with Vodafone India will improve company's finances. The stock had added over 29% in intraday trade on Monday.
Bharti Infratel fell to its 52-week low of Rs 283, down 13.9% on the BSE in intra-day trade on back of heavy volumes. The stock ended 10.8% lower. The stock has tanked 19% in past two trading sessions from Rs 354 on Friday, after Vodafone on Monday said it is in talks to merge its unlisted Indian subsidiary with Idea Cellular.
Among gainers Power Grid, ITC, Bajaj Auto and L&T were the top movers on Sensex while TCS, Gail, Adani Ports and Sun Pharma were top laggards.
Tata Motors fell over 1.5% after Jaguar Land Rover reported that it will recall 6,438 vehicles in China due to defective safety belts.
The Economic Survey, presented in Parliament by Union Finance Minister Arun Jaitley projected the growth in 2017-18 to be 6.5% for the current fiscal, down from 7.6% recorded in the last financial year, but is expected to rebound in the range of 6.75-7.5% in 2017-18.
It stated that the adverse impact of demonetisation on GDP growth would be transitional. It also added that the cash supply will be replenished by end-March 2017, reverting the economy back to normal.
The report also knocked down a widely-touted proposal to introduce a so-called Universal Basic Income, saying it would cost between 4% and 5%of GDP. It described such a policy as "a powerful idea, but not ripe for implementation".
Asian shares slipped on Tuesday as stringent curbs on travel to the United States ordered by President Donald Trump brought home to investors that he is serious about carrying out his controversial campaign pledges.
Global stocks posted their biggest loss in six weeks on Monday after Trump signed an executive order to bar Syrian refugees indefinitely and suspend travel to the United States from seven Muslim-majority countries, sparking widespread protests.
European shares steadied in early trading on Tuesday. The pan-European STOXX 600 index was trading 0.08% higher by 0828 GMT, after falling more than 1% in the previous session. It has gained 0.4% so far in January after rising in the previous two straight months.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% while Japan's Nikkei dropped 1.7%, its biggest fall in almost three months.