Profit booking drags benchmarks lower in early deals

After hitting record highs in previous session, Indian equity benchmarks have made a cautious start and are trading in red in early deals on Tuesday as investors opted to book some profits off the table. However, losses remained capped as some respite came in from news that the government is hopeful of getting the GST Constitutional Amendment Bill passed in the ongoing winter session of Parliament so that the new tax regime could be rolled out by April 1, 2016.

On the global front, the US markets extended their gains and ended modestly higher in last session with the Dow and the S&P 500 reaching new record closing highs. However, trading activity on Wall Street remained relatively light, with lack of major US economic data. Asian shares gave back some of their China-inspired gains, while oil prices slumped ahead of this week’s OPEC meeting.

On the sectoral front, fast moving consumer goods, software and technology witnessed the maximum gain in trade, while metal, realty and power remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 700 shares on the gaining side against 1268 shares on the losing side while 58 shares remain unchanged.

The BSE Sensex opened at 28520.76; around 79 points higher as compared to its previous closing of 28499.54, and has touched a high and a low of 28541.22 and 28411.68 respectively. The BSE Sensex is currently trading at 28433.71, down by 65.83 points or 0.23%. There were 10 stocks advancing against 20 stocks declining on the index.

The overall market breadth remained in the favour of advances with 34.55% stocks advancing against 62.59% declines. The broader indices were trading in the red; the BSE Mid cap index was down by 0.74%, while Small cap index down by 0.77%.

The gaining sectoral indices on the BSE were FMCG up by 0.14%, IT up by 0.11%, TECK up by 0.09% and Healthcare up by 0.09%, while Metal down by 1.88%, Realty down by 1.25%, Power down by 1.08%, INFRA down by 0.98% and PSU down by 0.86% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.64%, Bharti Airtel up by 1.05%, Wipro up by 0.74%, Maruti Suzuki up by 0.64% and HDFC up by 0.60%. On the flip side, Tata Steel down by 2.56%, Hindalco down by 2.27%, Tata Power down by 1.58%, Sesa Sterlite down by 1.48% and Larsen & Toubro down by 1.42% were the top losers.

Meanwhile, reviewing the performance of the new government during the first six month of its functioning, India Inc has stated that the new dispensation has initiated fundamental reforms that have set the stage for revival of economic growth.

FICCI President Sidharth Birla has stated that measures taken by new government to improve ease of doing business and attract investments in manufacturing and infrastructure will facilitate revival of capex cycle, accelerate economic activity, create large-scale employment and thus drive overall growth. Further, he added that real impact of these reform measures on the economy should be visible in the next 12-18 months.

PHD Chamber President Sharad Jaipuria asserted that the government has actively taken up the agenda of rejuvenation of India’s growth story by focusing on economic growth, taming price pressures, facilitating industrial and business environment and simplifying the policies and procedures. Government's vision to reduce administrative bottlenecks and provide conductive environment to the businesses will provide impetus to domestic economic growth in coming future. CII Director-General Chandrajit Banerjee has asserted that recent government decisions like increasing railway fares, raising FDI limits in defence, real estate and insurance, attracting FDI in railways and reform fuel price regime have all renewed the investors’ confidence. 

According to the industry, early roll-out of reforms like the Goods & Services Tax (GST), changes in the Land Acquisition Act, passage of the Insurance Bill, boosting infrastructure, and augmenting the manufacturing base will be instrumental in refueling growth. On fiscal deficit front, the Industry is of the view that expediting disinvestments to shore up revenues and rationalising subsidies will be key to restrict the fiscal deficit within the budget target of 4.1% of GDP.

The CNX Nifty opened at 8,530.80; flat as compared to its previous closing of 8,530.15, and has touched a high and a low of 8,535.35 and 8,491.50 respectively.

The CNX Nifty is currently trading at 8490.90, down by 39.25 points or 0.46%. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.70%, Zee Entertainment up by 1.70%, Wipro up by 0.84%, Bharti Airtel up by 0.80% and BPCL up by 0.56%. On the flip side, Power Grid down by 3.65%, Jindal Steel & Power down by 2.99%, Tata Steel down by 2.96%, NMDC down by 2.26% and Hindalco down by 2.14% were the top losers.

Asian markets were trading mixed; Nikkei 225 soared 45.15 points or 0.26% to 17,402.66, Shanghai Composite added 17.90 points or 0.71% to 2,550.78, FTSE Bursa Malaysia KLCI strengthened by 4.97 points or 0.27% to 1,838.74 and  Taiwan Weighted was up by 9.70 points or 0.11% to 9,132.03.

On the flip side, Hang Seng dropped by 30.23 points or 0.13% to 23,862.91, KOSPI Index slipped 1.16 points or 0.06% to 1,977.38, Straits Times contracted by 1.32 points or 0.04% to 3,339.21 and Jakarta Composite was down by 16.69 points or 0.32% to 5,125.07.