Benchmarks trim gains to trade in red

Indian equity benchmarks trimmed gains and started trading in red hovering near the neutral line in the late afternoon session on account of selling in frontline blue chip counters. Global rating agency Moody’s forecasted better outlook for Indian economy and pegged country’s GDP to grow by 5% this year to further accelerate by 5.5%-5.6% in 2015, too short lived and failed to add optimism on the street. Traders were seen piling up positions in FMCG, IT and TECK while selling was witnessed in Realty, Capital Goods and Power sector stocks. In scrip specific development, BHEL was trading under pressure after the company’s June quarter earnings came in below market expectations.

On the global front, the Asian markets were trading mostly in green, while the European markets too traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,750 and 25,900 levels respectively. The market breadth on BSE was negative in the ratio of 726:2013 while 96 scrips remained unchanged.

The BSE Sensex is currently trading at 25880.00, down by 0.77 points after trading in a range of 25791.79 and 25972.62. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.93%, while Small cap index down by 2.49%.

The gaining sectoral indices on the BSE were FMCG up by 1.74%, IT up by 0.86%, TECK up by 0.14% while, Realty down by 4.82%, Capital Goods down by 3.00%, Power down by 2.73%, INFRA down by 2.28%, PSU down by 2.06% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.47%, ITC up by 2.31%, Hindustan Unilever up by 2.08%, Sun Pharmaceutical Industries up by 1.62% and TCS up by 1.12%. On the flip side, BHEL down by 7.40%, Coal India down by 3.54%, Tata Power down by 3.52%, Hindalco down by 3.10% and Larsen & Toubro down by 2.58% were the top losers.

Meanwhile, with an aim to provide impetus to Indian industry by implementing Goods and Service Tax (GST), Minister of State for Finance Nirmala Sitharaman has stated that discussions with the state governments on it are in the final stages and the government will soon implement the proposed new indirect tax regime.

The proposed GST is one of the biggest taxation reforms in India and 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 effect, boost revenues and aid economic growth.

At present, the government is engaged to address states’ concerns over its design and compensation for revenue loss to ensure early implementation of this singular tax reform. States are insisting that petroleum be kept out of the purview of the GST are also opposed to subsuming of entry tax within GST, especially that entry tax which is in lieu of octroi.

The CNX Nifty is currently trading at 7721.90, down by 5.15 points or 0.07% after trading in a range of 7695.70 and 7757.10. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.12%, ITC up by 2.56%, HDFC up by 2.50%, Hindustan Unilever up by 2.13% and Sun Pharmaceutical Industries up by 1.79%. On the flip side, BHEL down by 7.63%, Bank of Baroda down by 4.18%, Tata Power down by 3.89%, DLF down by 3.83% and Coal India down by 3.65% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 1.28 points or 0.06% to 2,222.88, FTSE Bursa Malaysia KLCI increased 4.86 points or 0.26% to 1,855.25, Jakarta Composite increased 17.29 points or 0.34% to 5,149.68, KOSPI Index increased 20.89 points or 1.02% to 2,062.36, Nikkei 225 increased 52.32 points or 0.35% to 15,213.63, Taiwan Weighted increased 68.19 points or 0.74% to 9,231.31 and Hang Seng increased 200.93 points or 0.81% to 24,890.34.

On the other hand, Straits Times decreased 4.39 points or 0.13% to 3,299.00.

The European markets were too trading in green, UK’s FTSE 100 increased 3.39 points or 0.05% to 6,635.81, France’s CAC increased 34.58 points or 0.83% to 4,196.74 and Germany’s DAX increased 88.74 points or 0.98% to 9,158.21.