Markets bounce back from day’s low, yet continue to reel under pressure

Local equity markets after slipping into negative territory, continue to reel under pressure with losses of around 0.15%. However, markets bouncing off from day’s low have recouped some of the losses, lifting 30 share barometer index, Sensex above psychologically crucial 27,550 level, Nifty too is trading above 8,250 level, which at one point of time looked dangerously close of breaching the crucial level. Additionally, broader indices too succumbed to selling pressure, however with slender losses of around 0.05%.

Prevailing cautiousness ahead of key macroeconomic data, i.e, consumer price index (CPI)-based inflation and Index of Industrial Production (IIP) data, is mainly weighing on the sentiment. While, the street expects CPI inflation to be around 4.4% in November compared with 5.52% in October, IIP is expected to grow 2.7% in October compared with 2.5% in September.

On the global front, Asian shares got a lift on Friday after upbeat U.S. spending data suggested weaker oil prices have some upside for the American economy, though a continued slide in crude prices kept gains in check and heralded a gloomy opening for Europe markets.

Closer home, most of the sectoral indices on BSE were trading in negative territory, stocks from Realty, Oil & Gas and Power counters were the prominent losers of the session. On the flip side, stocks from Healthcare, FMCG and banking counters were the top gainers of the session. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1409:1194; while 122 shares remained unchanged.

The BSE Sensex is currently trading at 27557.18, down by 44.83 points or 0.16% after trading in a range of 27481.32 and 27692.32. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.03%, while Small cap index was lower by 0.05%.

The gaining sectoral indices on the BSE were FMCG up by 0.72%, Bankex up by 0.06%, Auto up by 0.01% while, Realty down by 1.22%, Oil & Gas down by 0.99%, Capital Goods down by 0.63%, Power down by 0.60%, Consumer Durables down by 0.52% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.53%, Sun Pharma Inds. up by 1.53%, Maruti Suzuki up by 1.27%, Tata Power up by 0.94% and Hero MotoCorp up by 0.86%. On the flip side, GAIL India down by 4.00%, Sesa Sterlite down by 2.12%, ONGC down by 1.82%, BHEL down by 1.81% and Mahindra & Mahindra down by 1.61% 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 8271.80, down by 21.10 points or 0.25% after trading in a range of 8259.00 and 8321.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were NMDC up by 1.71%, Ambuja Cement up by 1.64%, Sun Pharma Industries up by 1.63%, Bharti Airtel up by 1.50% and Maruti Suzuki up by 1.15%. On the flip side, GAIL India down by 4.01%, Cairn India down by 3.19%, DLF down by 2.73%, Zee Entertainment down by 2.31% and Sesa Sterlite down by 2.19% were the top losers. 

Asian markets were trading mostly higher; with Jakarta Composite trading higher by 3.45 points or 0.07% to 5,156.15; KOSPI Index edging up by 5.12 points or 0.27% to 1,921.71; Shanghai Composite advancing by 10.66 points or 0.36% to 2,936.41; Straits Times gaining by 12.88 points or 0.39% to 3,331.58; Taiwan Weighted rising by 14.26 points or 0.16% to 9,027.33; Nikkei 225 increased 114.18 points or 0.66% to 17,371.58.

On the flip side, Hang Seng down by 16.04 points or 0.07% to 23,296.50 and FTSE Bursa Malaysia KLCI down by 7.16 points or 0.41% to 1,737.41.