Benchmarks trade near intra-day low level in late morning session

Indian equity benchmarks continued to trade near intra-day low level as several stocks suffered losses on selling by funds and retail investors ahead of monthly expiry in the derivatives segment. Sentiment weakened further as foreign institutional investors (FIIs) sold shares worth a net Rs 286.54 crore on May 28, 2014. Traders were seen piling up positions in FMCG and Auto stocks, while selling was witnessed in IT, Teck and Metal sector stocks. In scrip specific development, Infosys fell as much as 7.5% in morning trade on news that the company's president BG Srinivas has quit. Further, Unitech was trading down by 3.4% after it reported a net loss of Rs 51.5 crore for the quarter ended March 31, 2014.  Languishing in red, both Sensex and Nifty were trading below the crucial 24,450 and 7300 levels respectively, with losses of over 1/2 of a percent.  Meanwhile, broader indices too succumbed to selling pressure were trading with loss on the range of 0.02-0.15%.

Markets are expected to remain volatile today as the expiry of the May series of derivative contract are due. Meanwhile, some traders were awaiting Q1 economic growth data due on Friday and the Reserve Bank of India’s (RBI) bi-monthly monetary policy review due out on Tuesday. On the global front, Asian shares inched up to a one-year high on expectations of easier monetary policy from the European Central Bank. US markets closed marginally lower after touching an all-time high on Tuesday as investors took a breather after four consecutive sessions of gains.

Back home, 3M India, Ajcon Global, BHEL, BPCL, Cipla, DLF, Dunlop India, Fortis Healthcare, GMR Infra, Hindalco Inds and Tata Motors will be in focus on account of March quarter earnings announcement. The market breadth on BSE was positive, out of 2271 stocks traded, 1135 stocks advanced, while 1050 stocks declined on the BSE.

The BSE Sensex is currently trading at 24412.71 down by 143.38 points or 0.58% after trading in a range of 24528.20 and 24406.49. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.15%, while Small cap index down by 0.02%.

The top gaining sectoral indices on the BSE were, FMCG up by 0.16% and Auto up by 0.08%, while IT down by 2.74%, Teck down by 2.08%, Metal down by 1.45%, Realty down by 1.20% and Power down by 0.89% were the top losers on the sectoral index.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.30%, Bharti Airtel up by 1.05%, Dr Reddys Lab up by 0.86%, HDFC up by 0.80% and HDFC Bank up by 0.69%. On the flip side, Infosys was down by 6.44%, BHEL was down by 3.03%,  SSLT was down by 2.66%, Hindalco was down by 2.31% and Wipro was down by 1.98% were the top losers on the Sensex.

Meanwhile, in a renewed attempt to introduce the national goods and services tax (GST), Finance Minister Arun Jaitley will soon hold meeting with State finance ministers. Finance Minister is keen on early implementation of the GST regime and has also asked tax officials for a separate presentation on the matter.

GST, the proposed new indirect tax regime and one of the biggest taxation reforms in India will replace existing state and federal levies such as excise duty, service tax and value-added tax (VAT) and will integrate State economies and boost overall growth. Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions. The industry is awaiting its introduction, as GST would remove the cascading affect, boost revenues and aid economic growth.

Finance Ministry may also form an empowered committee, comprising revenue department officials, as well as experts from outside, to lay out a road map for its implementation. The previous Government had brought a Constitutional Amendment Bill to introduce the GST, but failed to get it through, owing to the lack of consensus. Since the basic framework is ready, new Government does not require much effort to re-introduce the Bill. Further, it would not have a problem passing the Bill, given its strength in the Lok Sabha.

The CNX Nifty is currently trading at 7,295.25 down by 34.40 points or 0.47% after trading in a range of 7,325.40 and 7,292.75. There were 24 stocks advancing against 26 declining on the index.

The top gainers of the Nifty were UltraTech Cement up by 3.20%, M&M up by 1.28%, Bharti Airtel up by 1.08 %, HDFC up by 0.99% and Kotak Bank up by 0.97%. On the flip side, SSLT down by 2.77%, Hindalco down by 2.75%, BHEL down by 2.65%, Jindal Steel & Power down by 2.21% and Wipro down by 2.10% were the top losers on the index.

Most of Asian markets were trading in green; Hang Seng gained 0.40%, Jakarta Composite surged 0.44%, KLSE Composite strengthened by 0.28%, Nikkei 225 spurted by 0.10% and Straits Times was up by 0.92%. On the flip side, Seoul Composite declined 0.31%, Shanghai Composite down by 0.13% points and Taiwan Weighted was down by 0.05%.