Markets continue to trade lackluster; positive start of European equities may aid

Markets continued to trade lackluster in absence of any positive trigger at home front, though positive start of European equities could trigger some trend reversal. Trading languid, both Sensex and Nifty were holding above crucial 26,300 and 7,850 levels respectively, with losses of around one tenth of a percent. Meanwhile, broader indices too succumbing to selling pressure were trading with losses in the range of 0.15%-0.40%. Sentiment too some extent took a hit after India’s trade defici, exerting pressure on country’s external sector as well as domestic currency more than doubled at $14.25 billion in month of September as compared to $6.12 billion in the same month previous year as exports grew marginally and imports continued to expand at higher pace.

On the global front, Asian shares continued to reel under pressure, with stocks in Japan slumping over 2% to their lowest since May as growing concerns over economic growth around the world took its toll on the region. However, European shares taking a breather from previous trading session’s sell-off rose on Thursday as investors took comfort in corporate results from bellwether such as pharma group Roche and food giant, Nestle.

Back home, most of the sectoral indices on BSE were reeling under pressure, stocks from Consumer Duranle, Metal and Power counters were the worst of the session. On the flip side, stocks from Realty, Fast Moving Consumer Goods (FMCG) and Public Sector Undertaking (PSU) were the top gainers. Realty counter made a smart comeback in the session tailing the rebound of DLF’ shares on the back of value buying activities. Shares in country’s biggest property developer DLF surged nearly 10% on Thursday after starting the session by slumping to a record low as investors were attracted by cheaper valuations following a recent slump. In stock specific activity, shares of state-owned oil marketing companies such as HPCL, BPCL and Indian Oil Corporation were holding up by 1-3% on 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. Meanwhile, tyre stocks were in demand with rubber prices slumping at five year low level. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1143:829; while 24 shares remained unchanged.

The BSE Sensex is currently trading at 26358.84, down by 9.51 points or 0.04% after trading in a range of 26248.47 and 26462.08. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.15%, while Small cap index down by 0.39%.

The gaining sectoral indices on the BSE were Realty up by 0.94%, FMCG up by 0.80%, PSU up by 0.38% and Bankex up by 0.35% while, Consumer Durables down by 1.11%, Metal down by 0.83%, Power down by 0.60%, Capital Goods down by 0.45% and Oil & Gas down by 0.44% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.42%, Hindustan Unilever up by 1.31%, ITC up by 1.19%, Axis Bank up by 1.10% and Coal India up by 1.09%. On the flip side, Hindalco down by 3.24%, Sesa Sterlite down by 2.66%, Mahindra & Mahindra down by 1.84%, Tata Power down by 1.38% and Reliance Industries down by 1.35% 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 7852.55, down by 11.45 points or 0.15% after trading in a range of 7836.45 and 7893.90. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were DLF up by 4.19%, BPCL up by 3.35%, NMDC up by 3.35%, GAIL India up by 1.30% and Hindustan Unilever up by 1.29%. On the flip side, Ultratech Cement down by 3.97%, Cairn India down by 3.24%, Hindalco down by 3.18%, Sesa Sterlite down by 2.81% and Jindal Steel & Power down by 2.42% were the top losers.

Asian markets were reeling under pressure; Nikkei 225 down by 335.14 points or 2.22% to 14,738.38; Hang Seng down by 160.69 points or 0.69% to 22,979.36; Straits Times down by 36.11 points or 1.13% to 3,162.61; Taiwan Weighted down by 21.82 points or 0.25% to 8,633.69; FTSE Bursa Malaysia KLCI down by 12.64 points or 0.71% to 1,774.20; KOSPI Index down by 7.08 points or 0.37% to 1,918.83; Shanghai Composite down by 6.41 points or 0.27% to 2,367.26 and Jakarta Composite down by 5.98 points or 0.12% to 4,956.96.

European shares got off to a positive start; with France’s CAC trading higher by 45.8 points or 1.16% to 3,985.52; UK’s FTSE 100 rising by 64.87 points or 1.04% to 6,276.51 and Germany’s DAX gaining by 83.05 points or 0.97% to 8,655.00