Benchmarks continue weak trade; Oil & Gas drags

Indian equity markets trim losses but continued to trade in red in the late afternoon session on account of selling in frontline blue chip counters taking cues from Asian counterparts. The United Nations report that India’s economic growth is expected to improve to 6.3% in 2016 with the country leading economic recovery in South Asia, failed to add any optimism on the street. The UN World Economic Situation and Prospects 2015 (WESP) reported that India is likely to make progress in implementing economic policy reforms and help provide support to business and consumer confidence. Investors maintained cautious approach ahead of the release of key macroeconomic data, i.e. consumer price index (CPI)-based inflation and Index of Industrial Production (IIP) data scheduled on Friday. Traders were seen piling positions in Infra and FMCG stocks while selling was witnessed in Oil & Gas, Realty and IT sector stocks. In scrip specific development, Havells India was trading in red after foreign brokerage firm downgraded the stock to sell from neutral, citing rich valuations and elusive growth recovery.

On the global front, the Asian markets were trading in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,350 and 27,800 levels respectively. The market breadth on BSE was negative in the ratio of 1086:1591 while 98 scrips remained unchanged.

The BSE Sensex is currently trading at 27713.35, down by 117.75 points or 0.42% after trading in a range of 27539.47 and 27796.34. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.10%, while Small cap index down by 0.30%.

The gaining sectoral indices on the BSE were Infra up by 0.23%, FMCG up by 0.17% while, Oil & Gas down by 1.60%, Realty down by 0.86%, IT down by 0.75%, TECK down by 0.58%, PSU down by 0.44% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.21%, Dr. Reddy’s Lab up by 1.15%, Mahindra & Mahindra up by 0.85%, Hindalco up by 0.84% and Coal India up by 0.51%. On the flip side, Tata Steel down by 1.97%, ONGC down by 1.93%, Infosys down by 1.88%, GAIL India down by 1.86% and Bharti Airtel down by 1.82% were the top losers.

Meanwhile, ahead of the meeting with state finance ministers to iron out contentious issues over GST implementation, Finance Minister Arun Jaitley has asserted that the government will soon release Rs 11,000 crore towards Central Sales Tax (CST) compensation, as part of consensus building for Goods and Services Tax (GST) rollout.

The Minister stressed that despite the challenging revenue condition, the government will release about Rs 11,000 crore, which is one-third this year, as a part payment of CST compensation to the states and balance amount will start being paid from the next financial year. The GST roll out has missed several deadlines because of lack of consensus among Centre and states over certain crucial issues like CST compensation. The states still wait for Rs 13,000 crore CST compensation arrears pending till 2010 and have also sought a five-year compensation mechanism from the Centre and demanded the same to be included in the GST Constitutional Amendment Bill. States have also been demanding that petroleum, alcohol and tobacco should be kept out of the purview of the GST.

The proposed GST is one of the biggest taxation reforms in India and 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. 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 boost revenues and aid economic growth.

The CNX Nifty is currently trading at 8322.00, down by 33.65 points or 0.40% after trading in a range of 8272.40 and 8348.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.05%, Tech Mahindra up by 1.72%, IDFC up by 1.25%, Dr. Reddy’s Lab up by 1.16% and Kotak Mahindra Bank up by 1.06%. On the flip side, Jindal Steel & Power down by 2.72%, Cairn India down by 2.49%, Tata Steel down by 2.30%, Infosys down by 1.96% and ONGC down by 1.95% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 211.98 points or 0.9% to 23,312.54, Nikkei 225 decreased 155.18 points or 0.89% to 17,257.40, KOSPI Index decreased 28.97 points or 1.49% to 1,916.59, Taiwan Weighted decreased 19.09 points or 0.21% to 9,013.07, Shanghai Composite decreased 14.26 points or 0.49% to 2,925.74, FTSE Bursa Malaysia KLCI decreased 14.15 points or 0.8% to 1,751.37, Jakarta Composite decreased 8.73 points or 0.17% to 5,156.68 and Straits Times decreased 6.92 points or 0.21% to 3,318.89.

The European markets were trading in green; France’s CAC increased 8.1 points or 0.19% to 4,236.01, Germany’s DAX increased 21.7 points or 0.22% to 9,821.43 and UK’s FTSE 100 increased 8.72 points or 0.13% to 6,508.76.