Benchmarks continue to trade flat amid weak Asian cues

Indian equity benchmarks continued to trade flat in afternoon session in the absence of directional cues. Weak trend at other Asian markets due to the concerns over world economic growth weighed on the sentiments and investors were seen selling stocks of consumer durables, power and metal sectors. Further, the statement that India’s trade deficit widened to more than double at $14.25 billion in September from a year earlier also added to the pessimistic sentiments. Broader indices were also trading slightly in negative territory. However, markets losses remained capped as gains in realty, FMCG and PSU stocks provided some support to the domestic benchmarks. Shares of state-owned oil marketing companies such as HPCL, BPCL and Indian Oil Corp were on buyers' radar amid hopes that under recoveries on sale of diesel and cooking fuels such as LPG and kerosene would be lower after global crude oil prices eased to 4-year lows.

In scrip specific development, shares of drug maker Strides Arcolab have plunged 16% to Rs 667 after the stock turned ex-dividend for Rs 105 per share today. On the other hand, Cyient  has rallied 9% to Rs 487 after reporting a strong 31.6% sequential growth in consolidated net profit at Rs 90.18 crore for Q2FY15 due to higher other income.

On global front, Asian markets were trading in red with Nikkei 225 down 2.33% and Hang Seng down 0.69%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,900 and 26,500 levels respectively. The market breadth on BSE was negative, out of 2,487 stocks traded, 1,027 stocks advanced, while 1,354 stocks declined on the BSE.

The BSE Sensex is currently trading at 26357.75, up by 8.42 points or 0.03% after trading in a range of 26248.47 and 26462.08. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.10%, while Small cap index down by 0.32%.

The gaining sectoral indices on the BSE were Realty up by 1.58%, FMCG up by 0.56%, PSU up by 0.36%, Bankex up by 0.26% and IT up by 0.12%. On the flip side, Consumer Durables down by 1.09%, Metal down by 0.89%, Power down by 0.58%, Capital Goods down by 0.43% and Oil & Gas down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.74%, Hindustan Unilever up by 1.53%, TCS up by 1.40%, Hero Moto Corp up by 0.85% and Cipla up by 0.63%. On the flip side, Hindalco down by 3.51%, Sesa Sterlite down by 2.89%, Mahindra & Mahindra down by 1.68%, Tata Power down by 1.38% and Reliance Industries down by 1.26% were the top losers.

Meanwhile, indirect tax collections grew by 5.8 percent to Rs 2.42 lakh crore during April-September period of current fiscal as compared to Rs 2.29 lakh crore during the same period of previous financial year. Indirect taxes include customs duty, central excise duty and service tax. The growth at 5.8 percent is far lower than 25 percent annual increase envisaged in Budget 2014-15 and is mainly impacted by decline in excise duty collections, indicating slump in manufacturing activity.

Central excise tax collection declined by 0.6 percent y-o-y to Rs 75,021 crore during the first six months of current fiscal. However, customs collections rose 5.5 percent to over Rs. 89,324 crore during April-September FY15 period against Rs 84,643 crore in the same period a year ago. Service tax collections grew by 13.1 percent to Rs 77,466 crore during the reported period. Over the past few months, services tax collections have been showing firm growth trend as the government had introduced the concept of negative list of taxation to widen the service tax base.

During September, indirect tax collections grew by 12.3 percent to Rs 48,012 crore. Excise duty collections in September contracted by 0.4 per cent to Rs. 14,288 crore, whereas custom duty collections grew by 32.8 percent to Rs 18,116 crore during the month. Service tax collections in September rose by 5.8 per cent to Rs. 15,608 crore against Rs 14,755 crore in the same month of last fiscal.

Tax collection is the major source of revenue for the government. 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. The government has estimated to garner Rs 13.64 lakh crore from both direct and indirect tax collections during the current fiscal.

The CNX Nifty is currently trading at 7858.00, down by 6.00 points or 0.08% after trading in a range of 7836.45 and 7893.90. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were DLF up by 6.10%, BPCL up by 3.47%, NMDC up by 2.40%, GAIL India up by 1.63% and TCS up by 1.40%. On the flip side, Ultratech Cement down by 3.53%, Hindalco down by 3.51%, Sesa Sterlite down by 2.93%, Cairn India down by 2.60% and HCL Tech down by 1.79% were the top losers.

Most of the Asian markets were trading in red, Shanghai Composite up by 0.71 points or 0.03% to 2,374.38. While, Nikkei 225 down 351.87 points or 2.33% to 14,721.65, Hang Seng down 159.81 points or 0.69% to 22,980.24, Straits Times down 39.92 points or 1.25% to 3,158.80, Taiwan Weighted down 21.82 points or 0.25% to 8,633.69, FTSE Bursa Malaysia KLCI down 12.33 points or 0.69% to 1,774.51, KOSPI Index down 7.08 points or 0.37% to 1,918.83, Jakarta Composite down 2.68 points or 0.05% to 4,960.26.