Benchmarks add losses; Nifty slips below 7800 mark

Indian bourses added losses to continue weak trade in the late morning session, with the Sensex losing over 100 points and Nifty falling below the 6750 level, weighed down by Realty, METAL, information technology (IT) and Power stocks. Weak global equities and continuing unrest in the Middle East and Ukraine have further dampened the sentiments of the market participants. Sentiment weakened further as Reserve Bank of India official stated that India continues to face threats on the growth and external sector fronts. However, gains in Healthcare and FMCG stocks have restrained the market to extend losses. Some support also came in from reports that foreign institutional investors (FIIs) bought shares worth a net Rs 282 crore on July 24, 2014. In scrip specific development, shares of Ranbaxy Laboratories were trading higher after the company has signed a licensing agreement with Canada’s Cipher Pharmaceuticals Inc to exclusively market, sell and distribute Cipher’s isotretinoin capsules in Brazil. Besides, shares of Bayer Cropscience soared after reporting a strong 24% year-on-year (yoy) jump in net profit at Rs 109 crore for the quarter ended June 30 2014, on back of higher sales. On the other hand, Technology shares declined, with Wipro falling as much as 8% after the company's earnings missed estimates.

On the global front, most of the Asian stock markets were trading lower in the early deals on Friday, after a mostly flat day on Wall Street, though a fresh S&P closing record and upbeat US employment data underpinned sentiment. Back home, the rupee opened marginally weak at 60.13 per dollar against the previous close of 60.11 against the dollar on Friday on the back of month-end dollar demand from importers. Meanwhile, the market breadth on BSE was negative, out of 2159 stocks traded, 734 stocks advanced, while 1345 stocks declined on the BSE.

The BSE Sensex is currently trading at 26181.65 down by 90.20 points or 0.34% after trading in a range of 26300.17and 26148.10. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.70%, while Small cap index down by 1.02%.

The gaining sectoral indices on the BSE were Healthcare up by 0.83% and FMCG up by 0.33%. While, Realty down by 1.34%, Metal down by 1.24%, IT down by 1.16%, Power down by 1.07% and India Infrastructure Index down by 1.06% were the losing indices on BSE.  

The top gainers on the Sensex were Sun Pharma up by 2.05%, Mahindra & Mahindra up by 1.61%, Hindustan Unilever up by 1.54%, HDFC up by 1.53% and  HDFC Bank up by 0.72%. On the flip side, Wipro was down by 5.85%, BHEL was down by 2.37%, Tata Motors was down by 2.04%, Hindalco was down by 1.90% and SSLTwas down by 1.41% were the top losers on the Sensex.

Meanwhile, Indirect tax collections grew by 4.5 percent to 1,13,570 crore during April-June quarter of the current fiscal as compared to 1,08,639 crore during the same period of previous financial year. Indirect taxes include customs duty, central excise duty and service tax. The increase in indirect tax collection was mainly driven by strong growth in service tax collections which grew by 19 percent to 38,362 crore in the reported quarter as against 32,617 crore during Q1 FY14. Service tax collections showed significant growth as the government had introduced the concept of negative list of taxation to widen the service tax base. As per the concept, all services except those in the negative list are taxable.

However, custom duty and excise duty collections declined in the reported month, reflecting slump in manufacturing activity. Customs collections declined by 3.1 percent y-o-y to 39,549 crore in April-June ’FY15, while, central excise tax collection declined by 0.2 percent y-o-y to 35,159 crore during the same period. 

The Budget aims to mobilise Rs 6,23,000 crore in 2014-15, which requires a growth rate of 20 per cent over 2013-14. Meanwhile, the government managed to collect over 18 per cent of the Budget target for indirect taxes during the first three months (April-June) of the current fiscal.

Tax collection is the major source of revenue for the government. The government estimates to garner Rs 13.64 lakh crore from both direct and indirect tax collections during the current fiscal. In the previous fiscal year, tax collections fell short of target by a whopping Rs 77,000 crore as the government collected Rs 11.58 lakh crore against the budget estimate of Rs 12.35 lakh crore. To boost the tax collection, the income-tax department has also drawn up a plan to widen the tax base by going after non-filers, using annual information returns, capturing new information sources such as under-reporting of immovable property and buyback of shares.

The CNX Nifty is currently trading at 7,798.95 down by 31.65 points or 0.40% after trading in a range of 7,840.95 and 7,788.30. There were 15 stocks advancing against 35 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 2.04%, Hindustan Unilever up by 1.61%, HDFC up by 1.58%, M&M up by 1.53% and Lupin up by 1.43%. On the flip side, Wipro down by 5.90%, Cairn down by 3.26%, DLF down by 2.64%, BHEL down by 2.45% and Jindal Steel & Power down by 2.40% were the major losers on the index.

Asian markets were trading mostly in the red; Hang Seng slipped 0.07%, Straits Times declined by 0.31%, Jakarta Composite dropped by 0.36%, FTSE Bursa Malaysia KLCI tumbled by 0.43% and Taiwan Weighted was down by 1.05%. On the flip side, Nikkei 225 soared 0.67%, KOSPI Index increased by 0.33% and Shanghai Composite was up by 0.54%.