Benchmarks add losses; Sensex slips below 27800 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 100 points and Nifty falling below the 6450 level, on sustained selling by funds and retail investors coupled with weak corporate earnings figure. Besides, weakness in the rupee, concerns over the land bill and the impact of retrospective taxation on foreign investors rattled Indian equities on Tuesday. However, losses remained capped with the progress in the GST implementation on reports that the Centre and the states are working on a new revenue neutral rate, which is currently pegged at 27 percent.

On global front, Asian markets followed a positive lead from Wall Street on Tuesday, with investors keeping an eye on Europe as Greece struggles to pay off its debts. Further, Chinese authorities are using the new measures, especially the reserve ratio cut, to 'encourage a longer, steadier rally to take place and people are just reacting to that,' said Andrew Sullivan of Haitong Securities. Back home, Indian rupee plunged by another 24 paise to hit a new one-month low of Rs 63.15 against the dollar in early trade due to sustained demand for dollars from importers and bankers.

Back on street, stocks from Power, Realty and infrastructure counters were supporting the markets’ uptrend, while those from Auto, information technology (IT) and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Tata Sponge Iron have dipped after reporting a sharp 79% year-on-year (YoY) drop in its consolidated net profit at Rs 8.57 crore for the fourth quarter ended March 31, 2015 (Q4FY15), due to lower realization. Furthermore, HCL Tech has dipped after reporting a 12% quarter-on-quarter (q-o-q) decline in its consolidated net profit at Rs 1,683 crore for the third quarter ended March 2015.

The market breadth on BSE was negative, out of 2166 stocks traded, 986 stocks advanced, while 1090 stocks declined on the BSE.

The BSE Sensex is currently trading at 27785.12, down by 101.09 points or 0.36% after trading in a range of 27687.07 and 27976.93. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.20%, while Small cap index down by 0.27%.

The gaining sectoral indices on the BSE were Power up by 0.34%, Realty up by 0.34%, Capital Goods up by 0.32%, infrastructure up by 0.31% and Consumer Durables up by 0.26% while, IT down by 0.55%, Auto down by 0.52%, TECK down by 0.32%, Oil & Gas down by 0.07% and Metal down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.96%, Mahindra & Mahindra up by 1.39%, ITC up by 0.95%, Coal India up by 0.90% and ICICI Bank up by 0.90%. On the flip side, Sun Pharma down by 9.73%, Maruti Suzuki down by 3.35%, Dr. Reddys Lab down by 2.97%, Hindalco down by 1.84% and HDFC down by 1.26% were the top losers.

Meanwhile, moving a step forward in the direction of implementing Goods and Services tax (GST) by April 2016, the Revenue Secretary Shaktikanta Das has said that the Centre and the states are working on a new revenue neutral rate (RNR), which is currently pegged at 27 percent. Das said that the RNR is being recalculated and once the RNR is recalculated, then what will be the GST rate will be a matter to be decided by the GST Council under the Constitutional Amendment.

Earlier, a sub-committee on GST in November 2014 had suggested that the RNR of GST be pegged at about 27 percent. The sub panel had suggested states GST at 13.91 percent and Central GST at 12.77 percent. The Revenue Neutral Rate is the one at which there will be no revenue loss to the states after GST implementation and its recalculation was considered necessary as at present it does not take into account the taxation of petroleum products as also the 1 percent additional tax which states can levy as part of the GST Bill, which was tabled in the Lok Sabha in December.

While liquor has been completely kept out of the GST, petroleum products like petrol and diesel will be part of the new regime from a date to be decided at a future date by the GST Council, which will have two-third of its members from states. All decisions in the Council will require 75 percent votes and after RNR is recalculated, the GST Council will take a decision.

The new tax regime is scheduled to be rolled out from April 1, 2016, after carrying out the necessary constitutional amendment in the ongoing session of Parliament. A single rate GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services.

The CNX Nifty is currently trading at 8416.90, down by 31.20 points or 0.37% after trading in a range of 8382.65 and 8469.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.17%, Mahindra & Mahindra up by 1.44%, Zee Entertainment up by 1.24%, ITC up by 1.21% and Cairn India up by 1.21%. On the flip side, Sun Pharma down by 9.87%, HCL  down by 5.71%, Maruti Suzuki down by 3.63%, Lupin down by 3.24% and Dr. Reddys Lab down by 3.11% were the top losers.

Asian markets were trading mostly in the green; Straits Times rose 0.14%, FTSE Bursa Malaysia KLCI increased 0.4%, Jakarta Composite gained 0.41%, Shanghai Composite advanced 1.04%, Nikkei 225 surged 1.02% and Hang Seng was up by 2.11%. On the flip side, Taiwan Weighted decreased 0.14% and KOSPI Index was down by 0.19%.