Markets pare early gains; trade near intra-day low level

Indian equities pared all early gains and were hovering near the lowest point of the day in the late afternoon session. Fresh selling appeared in realty, oil and gas and metal stocks, which dragged the major indices down and most of the major sectoral indices on BSE entered into the negative territory. There was cautiousness among investors ahead of the major macro indicators such as CPI inflation and IIP to be announced later in the day. However, the gains in FMCG and auto stocks provided some support to the domestic benchmarks. Further, the announcement that states rejected the draft of Goods and Services Tax (GST) Bill also weighed on sentiments. However, broader indices were outperforming the major indices with both mid cap and small cap indices trading in green. Sector wise, shares of oil exploration and production companies continued trading lower on the bourses with the BSE oil and gas index hitting a seven-month low due to fall in global crude prices. 

IL&FS Engineering has surged around 11% to Rs 64.45 after the company said Maytas Infra Saudi Arabia, a subsidiary of construction firm has received Rs 464-crore contract from Saudi Binladin Group for construction of Abraj Kudai project in Makkah in Kingdom of Saudi Arabia (KSA). Suven Life Science has rallied around 6% to Rs 223 after the company announced that it has secured five product patents from four countries corresponding to the new chemical entities.

On global front, most of the Asian markets were trading in green with Hang Seng up by 0.01% and Jakarta Composite up by 0.07%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,300 and 28,000 levels respectively. The market breadth on BSE was positive, out of 2,476 stocks traded, 1,249 stocks advanced, while 1,123 stocks declined on the BSE.

The BSE Sensex is currently trading at 27570.58, down by 31.43 points or 0.11% after trading in a range of 27545.91 and 27692.32. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.24%.

The gaining sectoral indices on the BSE were FMCG up by 0.41%, Auto up by 0.10%, IT up by 0.08% and INFRA up by 0.01%. On the flip side, Realty down by 1.23%, Oil & Gas down by 0.75%, Metal down by 0.57%, Consumer Durables down by 0.53% and PSU down by 0.46% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.86%, Sun Pharma Inds up by 1.19%, Maruti Suzuki up by 1.00%, Infosys up by 0.97% and Hero MotoCorp up by 0.88%. On the flip side, GAIL India down by 4.00%, Sesa Sterlite down by 2.09%, ONGC down by 1.73%, Mahindra & Mahindra down by 1.51% and Hindalco down by 1.41% were the top losers.

Meanwhile, in a big setback to government aiming to implement GST soon, states rejected the draft of Goods and Services Tax (GST) Bill, underscoring that it does not address their concerns, particularly on entry tax and taxation of petroleum products.

During a meeting, the government’s plan to bring petroleum goods under GST regime was strongly opposed by the Empowered Committee of State Finance Ministers. The states also objected to the Constitutional Amendment Bill saying it does not contain provisions for giving states compensation against any possible loss of revenue after GST roll-out for five years. The state governments want to keep the entry tax and petro tax out of the ambit of the GST. The GST roll out has missed several deadlines because of lack of consensus among Centre and states over certain crucial issues like CST compensation. However, the government is taking steps to build consensus among states and centre for GST rollout. Finance Minister Arun Jaitley had recently announced that the government will soon release Rs 11,000 crore towards Central Sales Tax (CST) compensation and balance amount will start being paid from the next financial year.

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 8280.90, down by 12.00 points or 0.14% after trading in a range of 8279.60 and 8321.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.10%, NMDC up by 1.67%, Sun Pharma Inds up by 1.28%, Asian Paints up by 1.24% and Maruti Suzuki up by 1.01%. On the flip side, GAIL India down by 4.03%, Cairn India down by 3.09%, ONGC down by 2.15%, Sesa Sterlite down by 2.07% and Zee Entertainment down by 2.06% were the top losers.

Most of the Asian markets were trading in green, Hang Seng up by 1.65 points or 0.01% to 23,314.19, Jakarta Composite up by 3.45 points or 0.07% to 5,156.15, KOSPI Index up by 5.12 points or 0.27% to 1,921.71, Straits Times up by 11.96 points or 0.36% to 3,330.66, Taiwan Weighted up by 14.26 points or 0.16% to 9,027.33 and Nikkei 225 up by 151.16 points or 0.88% to 17,408.56. While, FTSE Bursa Malaysia KLCI down 5.93 points or 0.34% to 1,738.64 and Shanghai Composite down 4.23 points or 0.14% to 2,921.51.