Benchmarks continue to trade flat with negative bias

Indian equity benchmarks continued flat to negative trade in afternoon session ahead of November month F&O expiry due today. Since morning, the benchmarks exhibited range bound trade as gains in IT, teck and power stocks were offset by selling witnessed in FMCG, consumer durables and capital goods stocks. Sentiments remained sober amid reports that indirect tax collection may fall short of the annual target by an estimated Rs. 90,000 crore in the current fiscal. Investors also opted to remain on sidelines ahead of the release of July-September economic growth data on Friday and OPEC’s crucial meet scheduled today, which can decide on whether the group members will go for a production cut or not, impacting the global crude prices. However, markets’ losses remained capped as global credit rating agency Moody's report that FDI inflows into the country will continue in the coming quarters of fiscal 2015 and beyond. Broader indices outperformed benchmarks with high margins as both mid and small cap indices were trading up by over 0.40%. 

Shares of Texmaco Rail and Engineering are trading higher by around 3% to Rs 123 after the company said it has raised Rs 300 crore by issuing shares of qualified institutional buyers (QIB). On the other hand, Crompton Greaves has dipped around 5% to Rs 194 after Avantha Holdings, the promoter group company, sold part of its stake through multiple block deals on bourses.

On global front, Asian markets were showing mixed trend with Taiwan Weighted up by 0.47% and Hang Seng down 0.43%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,400 and 28,000 levels respectively. The market breadth on BSE was positive, out of 2,563 stocks traded, 1,396 stocks advanced, while 1,059 stocks declined on the BSE.

The BSE Sensex is currently trading at 28363.71, down by 22.48 points or 0.08% after trading in a range of 28343.11 and 28432.45. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index up by 0.55%.

The gaining sectoral indices on the BSE were IT up by 0.73%, TECK up by 0.37%, Power up by 0.37%, PSU up by 0.31% and Oil & Gas up by 0.28%. On the other hand, FMCG down by 0.58%, Consumer Durables down by 0.53%, Capital Goods down by 0.29%, Bankex down by 0.18% and Realty down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 2.81%, Hindustan Unilever up by 1.87%, Mahindra & Mahindra up by 1.42%, Infosys up by 1.26% and Sun Pharma Inds up by 1.12%. On the flip side, ITC down by 1.97%, Bharti Airtel down by 1.92%, Sesa Sterlite down by 1.14%, Tata Motors down by 0.95% and HDFC Bank down by 0.64% were the top losers.

Meanwhile, indirect tax collection is likely to fall short of annual target by an estimated Rs 90,000 crore in the current fiscal, mainly because of subdued industrial activities. Indirect taxes include customs duty, central excise duty and service tax.

Indirect tax revenue during the month of October rose 7.5% to Rs 44,384 crore from Rs 41,290 crore in the corresponding month a year ago, indicating woes of economic slowdown might not be over yet. Customs collection grew 19.5% to Rs 16,800 crore in October on high imports and softening crude oil prices. Excise collection grew 1.4% to Rs 14,169 crore in October because of the slowdown in manufacturing sector even in the festival month. Services tax collection also rose 1.2% to Rs 13,415 crore.

Further, indirect tax collection so far this fiscal is 45.7% of the Budget estimate of Rs 6.23 lakh-crore. For the first seven months of FY15, customs revenue rose 7.5 % to Rs 1.06 lakh-crore, 52.6 % of the Rs 2.02 lakh-crore Budget estimate. Excise collection shrunk 1.2 % to Rs 88,330 crore, 43% of the Rs 2.05-lakh-crore estimate and, service tax collection was only 42% of the target Rs 2.16 lakh-crore.

Tax collection is the major source of revenue for the government. The Budget aims to mobilise Rs 6.23 lakh crore in FY15, which requires a growth rate of 25% over FY14. If indirect tax collection does not rise in coming months, with disinvestment and spectrum sales not forthcoming, it could become difficult for the government to contain the fiscal deficit at 4.1% of the gross domestic product (GDP) without big spending cuts. India’s fiscal deficit widened to 82.6% to cross Rs 4.38 lakh crore during April-September this fiscal as against Rs 5.31 trillion Budget Estimates for 2014-15. In the corresponding year-ago period, fiscal deficit was 76% of the budget estimate.

The CNX Nifty is currently trading at 8472.65, down by 3.10 points or 0.04% after trading in a range of 8465.30 and 8489.25. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.90%, BPCL up by 2.63%, PNB up by 1.89%, Hindustan Unilever up by 1.72% and Power Grid Corpn up by 1.55%. On the flip side, Bharti Airtel down by 1.96%, ITC down by 1.87%, Zee Entertainment down by 1.86%, DLF down by 1.81% and Jindal Steel & Power down by 1.71% were the top losers.

Asian markets were trading mixed, KOSPI Index up by 1.25 points or 0.06% to 1,982.09, Jakarta Composite up by 4.59 points or 0.09% to 5,137.63, Shanghai Composite up by 18.08 points or 0.69% to 2,622.43 and Taiwan Weighted up by 42.92 points or 0.47% to 9,165.31. While, Hang Seng down 103.71 points or 0.43% to 24,008.27, Nikkei 225 down 88.64 points or 0.51% to 17,294.94, FTSE Bursa Malaysia KLCI down 9.76 points or 0.53% to 1,832.41 and Straits Times down 1.65 points or 0.05% to 3,348.01