Benchmarks add losses; Sensex slips below 26400 mark

Indian bourses adding losses, continued to trade in red in the late morning session, as investors turned cautious and booked profits at higher levels. Sentiments on the street weakened after Asian Development Bank stated that a global failure to respond to climate changes could result in about 8.7 percent economic loss in India’s Gross Domestic Product (GDP) by 2100. Besides, the Indirect tax collections inched up merely by 3.9 percent in the April-July quarter of the current fiscal, which was far less than 25 percent annual increase envisaged in the Budget for the full 2014-15 fiscal. However, gains in Healthcare, information technology (IT) and Metal stocks have restrained the market to extend losses.  Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 559.39 crore on August 19, 2014.

In scrip specific development, Shares of Just Dial have gained over 3% after the company's board approved increasing the shareholding limit of foreign institutional investors in the company to 75% from 49%. Besides, HDFC Bank rose after report says that the Foreign Investment Promotion Board (FIPB) may consider increasing foreign holding in the bank next month.

On the global front, Asian stocks were steady after strong United States housing data lifted Wall Street shares, helping nudge Treasury yields higher and keeping the dollar well bid against the euro and yen. Back home, Indian rupee fell by 15 paise to 60.82 against the US currency in early trade at the Interbank Foreign Exchange market due to the dollar’s gain against other units overseas.  The market breadth on BSE was positive, out of 2225 stocks traded, 1266 stocks advanced, while 878 stocks declined on the BSE.

The BSE Sensex is currently trading at 26381.15 down by 39.52 points or 0.15% after trading in a range of 26504.52 and 26370.30. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.09%, while Small cap index up by 0.72%.

The gaining sectoral indices on the BSE were Healthcare up by 1.45%, Teck up by 0.29%, IT up by 0.28%, Metal up by 0.14% and Infrastructure up by 0.06%, while PSU down by 0.54%, FMCG down by 0.51%, Capital Goods down by 0.48%, Realty down by 0.36% and Auto was down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.82%, Dr. Reddys Lab Industries up by 1.43%, Cipla up by 1.11%, Wipro up by 1.07% and Tata Steel was up by 0.62%. On the flip side, ONGC down by 1.47%, Hero MotoCorp down by 1.13%, SBI down by 1.10%, ITC was down by 0.80% and Hindustan Unilever down by 0.78% were the top losers.

Meanwhile, Indirect tax collections grew by 4.0 percent to Rs 1.54 lakh crore during April-July period of current fiscal as compared to Rs 1.48 lakh crore during the same period of previous financial year. Indirect taxes include customs duty, central excise duty and service tax. The growth at 4 percent is far less than 25 percent annual increase envisaged in the Budget for the full 2014-15 fiscal and mainly impacted by decline in custom duty and excise duty collections, reflecting slump in manufacturing activity.

Service tax collection grew by 16.4 percent to Rs 50,850 crore during April-July period against Rs 43,685 crore in the same period a year ago. Over the past two months, service tax collection showed significant growth as the government had introduced the concept of negative list of taxation to widen the service tax base and asked the revenue officials to focus more on service tax collection. Indirect tax collection in the month of July grew by 4.9 percent y-o-y to Rs 41,890 crore.

However, custom duty and excise duty collections declined in the reported month. Customs collection declined by 2.2 percent y-o-y to Rs 55,305 crore in April-July ’FY15, while, central excise tax collection declined by 0.4 percent y-o-y to Rs 48,195 crore during the same period. 

The Budget aims to mobilise Rs 6.23 lakh crore in 2014-15, which requires a growth rate of 25 per cent over 2013-14. Tax collection is the major source of revenue for the government. The government has estimated 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 7,885.10 down by 12.40 points or 0.16% after trading in a range of 7,922.70 and 7,881.15. There were 23 stocks advancing against 27 declining on the index.

The top gainers on Nifty were Sun Pharma Industries up by 1.81%, Dr. Reddys Lab up by 1.31%, Grasim up by 1.01%, Cipla up by 0.98% and Wipro up by 0.88%. On the flip side, PNB down by 1.50%, ONGC down by 1.32%, IDFC  down by 1.31%, Bank of Baroda down by 1.24% and SBI was down by 1.22% were the top losers.

Asian markets were trading mostly in the green; Nikkei 225 soared 0.10%, Hang Seng increased by 0.01%, Straits Times gained 0.37%, Jakarta Composite surged by 0.22%, FTSE Bursa Malaysia KLCI added 0.06% and Taiwan Weighted was up by 0.22%. On the flip side, KOSPI Index dropped 0.26% and Shanghai Composite down by 0.25%.