Markets trim some losses as FM tables Economic Survey

IT stocks declined as Trump govt introduced H1B visa bill in House of Representatives

Benchmark indices pared some losses as FM Arun Jaitley tables Economic Survey for 2016-17. 

The Economic Survey, government sees FY18 GDP growth in range of 6.75-7.5%. It also outlines three main downside risks to FY18 GDP growth forecast adding that demoetisation, rise in oil prices and global trade tensions will affect the growth forecast. The Survey sees fiscal windfall from invalid notes not returned. Excise related taxes will also fall around 0.1% of FY18 GDP.

 

In another development, Donald Trump government has 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. This led to a further decline in Dalal Street led by tumbling IT stocks.

 

At 2:20 pm, the S&P BSE Sensex was trading at 27,737, down 112 points, while the broader Nifty50 was ruling at 8,590, down 42 points.

 

In the broader market, BSE Midcap and BSE Smallcap indices slipped 0.8% and 0.9% respectively.

 

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 fell 4%during intra-day trade, making it the worst performing sectoral index. The index saw the biggest intra-day loss since January 6. It shed 5.8% this month.

 

All the IT stocks were trading in red, with HCL Tech dragging the pack, down 5.4%. TCS, Tech Mahindra, Wipro and Infosys fell between 3-4.8%

 

Idea Cellular extended gains to rise over 10% to Rs 106 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 287, down 13% on the BSE in intra-day trade on back of heavy volumes.

 

The stock of telecom services provider 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, ITC, ONGC, HDFC and Power Grid were the top movers on Sensex.

 

ONGC rose as much as 4.93% to its highest since June 2015, before paring gains, after the company received a first instalment from Venezuela towards recovering pending dividend.

 

President kicks off Budget Session

 

President in his opening Parliament speech outlined government's vision ahead of Budget Session, saying it is committed to inclusive growth. He also added that creation of vital next-generation infrastructure has received special attention of the government.

 

He favoured a constructive debate on simultaneous elections to Lok Sabha and Assemblies and funding of polls to eradicate money power. The government, he said, is also committed to combating terrorism and to ensure that perpetrators of such acts are brought to justice.

 

In his address to the joint sitting of both the Houses of Parliament marking the opening of the Budget session, Mukherjee referred to the government's demonetisation decision to fight black money and corruption as also the surgical strikes across the Line of Control as bold decisions, both of which were received with thumping of desks by members.