Benchmarks trade flat ahead of IIP and CPI data

Indian equity benchmarks have made a flat-to-positive opening on Friday ahead of important macro data -- IIP for the month of July and CPI inflation data for the month of August -- scheduled to be released in the evening. IIP for July is likely to fall to 1.7 percent month on month primarily due to weak core sector data, while the CPI for august is likely to soften to 7.7 percent. Though, some cautiousness crept in with RBI Governor Raghuram Rajan’s statement that abrupt reversal of low interest rates globally could create substantial amounts of damage and that it should be done in predictable and careful way.

On the global front, the US markets made a mixed closing in last session after an unexpected increase in initial jobless claims, though there was some recovery in the late trade but the market mood remained lackluster. The Asian markets, after making a good start, were trading mixed at this point of time after report that China’s aggregate financing and money-supply growth missed estimates.

Back home, on the sectoral front, consumer durables, fast moving consumer goods and oil and gas witnessed the maximum gains in trade, while banking, power and realty remained the top losers on the BSE sectoral space. The broader indices too were trading slightly in the green, while the market breadth on the BSE was positive; there were 1370 shares on the gaining side against 748 shares on the losing side while 76 shares remain unchanged.

The BSE Sensex opened at 27048.15; around 53 points higher as compared to its previous closing of 26995.87, and has touched a high and a low of 27065.02 and 27002.88 respectively. The BSE Sensex is currently trading at 27029.98, up by 34.11 points or 0.13%. There were 18 stocks advancing against 12 stocks declining on the index.

The overall market breadth remained in the favour of advances with 62.44% stocks advancing against 34.09% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index up by 0.62%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.21%, FMCG up by 0.66%, Oil & Gas up by 0.50%, PSU up by 0.33% and Auto up by 0.28% while, Bankex down by 0.22%, Power down by 0.19%, Realty down by 0.07% and Infrastructure down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.10%, ITC up by 0.95%, Bharti Airtel up by 0.95%, ONGC up by 0.92% and Hindustan Unilever up by 0.85%. On the flip side, Sun Pharma Industries down by 3.50%, Wipro down by 0.76%, Tata Power down by 0.72%, ICICI Bank down by 0.50% and Axis Bank down by 0.45% were the top losers.

Meanwhile, the government is likely to implement proposed new indirect tax regime Goods and Services taxes (GST) by mid-2015. With an aim to provide impetus to Indian industry by implementing GST, Finance Ministry has started a comprehensive study of tax exemptions granted to various goods and services under indirect tax regime in order to streamline the tax structure under GST.

The government may implement two types of GSTs including central GST and state GST. However, states are opposing the two tier structure and above constitutional amendment to transfer of taxation rights from state to centre under a uniform structure. States have also proposed to keep products such as petroleum, tobacco and alcohol out of GST ambit.

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. GST will help create a pan-Indian market for movement of goods and delivery of services and add about 1-2 percent to country's GDP. 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.

The CNX Nifty opened at 8,087.05; around 2 points higher as compared to its previous closing of 8,085.70, and has touched a high and a low of 8,102.95 and 8,084.80 respectively.

The CNX Nifty is currently trading at 8091.00, up by 5.30 points or 0.07%. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 1.87%, Maruti Suzuki up by 1.14%, ITC up by 0.98%, BPCL up by 0.90% and Bharti Airtel up by 0.89%. On the flip side, Sun Pharma Industries down by 3.56%, IDFC down by 1.13%, Ultratech Cement down by 0.87%, Power Grid Corporation down by 0.83% and HCL Tech down by 0.78% were the top losers.

Asian markets were trading mostly in the green. Straits Times was surged 2.46 points or 0.07% to 3,349.74, Nikkei 225 strengthen by 64.85 points or 0.41% to 15,974.05,  KOSPI Index increased by 8.37 points or 0.41% to 2,042.53, Jakarta Composite added by 8.26 points or 0.16% to 5,141.29 and Shanghai Composite was up by 3.58 points or 0.16% to 2,315.26.

On the flip side FTSE Bursa Malaysia KLCI declined by 2.23 points or 0.12% to 1,863.88,  Hang Seng contracted by 93.48 points or 0.38% to 24,569.16 and Taiwan Weighted was down by 83.97 points or 0.90% to 9,234.14.