Benchmarks trade lower in early deals ahead of Infosys Q4 numbers

Indian equity benchmarks have made a sluggish start and are trading lower in early deals with a cut of over half a percent as investors remained on sidelines ahead of Infosys Q4 number to be released later during the day. Sentiments also remained dampened on report that foreign institutional investors were net sellers in equities to the tune of Rs 277 crore on Thursday, as per provisional stock exchange data. Moreover, foreign traders remained watchful despite minister of state for finance Jayant Sinha's efforts to clear doubts on the Minimum Alternate Tax (MAT) on foreign funds. Investors are worried, even though the minister stated that funds invested through Mauritius and Singapore -countries with which India has treaty for tax exemption on capital gains-will be untouched.

On the global front, the US markets extended their gains in last session with modest gains, reacting positively to latest batch of earnings news from big-name companies. Although, the housing stocks moved lower on the disappointing new home sales data and there was an unexpected uptick in initial jobless claims, but traders turned hopeful that the Federal Reserve will delay its planned increase in interest rates due to weak economic data. The Asian markets were trading mixed at this point of time, though some weakness was being witnessed in Chinese and Japanese market on some profit taking and as the yen held gains amid weak US economic data.

Back home, sentiments weighed down after global rating agency Moody’s has said that a growth rate of more than 7.5 percent may not be “sustainable” for India in the present scenario and the country needs to resolve tax issues that are impacting its investment climate. On the sectoral front, FMCG and oil and gas witnessed the maximum gain in trade, while consumer durables, realty and capitalgoods remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 638 shares on the gaining side against 1,296 shares on the losing side while 73 shares remain unchanged.

The BSE Sensex is currently trading at 27628.00, down by 107.02 points or 0.39% after trading in a range of 27578.45 and 27829.11. 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 0.63%, while Small cap index down by 0.97%.

The gaining sectoral indices on the BSE were FMCG up by 0.39% and Oil & Gas up by 0.08% while, Consumer Durables down by 1.76%, Realty down by 1.41%, Capital Goods down by 1.00%, Auto down by 0.74% and Bankex down by 0.69% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.40%, ITC up by 1.10%, Tata Steel up by 0.79%, TCS up by 0.62% and Sun Pharma up by 0.55%. On the flip side, Axis Bank down by 1.84%, HDFC down by 1.80%, Cipla down by 1.69%, Maruti Suzuki down by 1.58% and Infosys down by 1.15% were the top losers.

Meanwhile, with an aim of introducing the nationwide goods and services tax (GST) by April 2016, the government will move the Constitution Amendment Bill in Parliament in the current session of Parliament even as the issue of compensation and revenue loss to manufacturing states, lacked consensus.

However, Finance Minister Arun Jaitley after a meeting with ministers of 18 states, underscored that the government will send a notice to Lok Sabha to soon take the bill for consideration even as Tamil Nadu struck a discordant note.  Further, Jaitley also expressed optimism in April 1, 2016 target and underscored that a constitutional amendment was required to facilitate GST as states currently do not have powers to tax services, while the Centre cannot levy sales tax.

The crucial GST, which is expected to add 1-2% to the GDP by creating a national market for goods and removing distortions caused by multiple indirect taxes levied by the Centre, states and local bodies, was earlier supposed to be rolled out from April 1, 2010 but has been delayed due to resistance on the part of many states that feared a loss of revenue.

The CNX Nifty is currently trading at 8357.40, down by 40.90 points or 0.49% after trading in a range of 8342.60 and 8413.30. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were NMDC up by 2.53%, Lupin up by 1.63%, ONGC up by 1.41%, ITC up by 0.99% and Tata Steel up by 0.83%. On the flip side, Tech Mahindra down by 2.13%, Axis Bank down by 1.95%, HDFC down by 1.82%, Cipla down by 1.71% and Cairn India down by 1.69% were the top losers.

Asian markets were trading mixed; Straits Times increased 1.26 points or 0.04% to 3,504.01, Jakarta Composite rose 3.06 points or 0.06% to 5,439.27, FTSE Bursa Malaysia KLCI added 12.41 points or 0.67% to 1,858.49 and Taiwan Weighted was up by 93.79 points or 0.96% to 9,891.28.

On the flip side, Hang Seng decreased 191.75 points or 0.69% to 27,635.95, Nikkei 225 declined 150.15 points or 0.74% to 20,037.50, Shanghai Composite dropped 77.75 points or 1.76% to 4,336.76 and KOSPI Index was down by 12.24 points or 0.56% to 2,161.17.