Benchmarks add losses; Nifty slips below 8200 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 450 points and Nifty falling below the 8200 level, weighed down by rate-sensitive sectors like financials, auto and real estate as macro economic data which is due to be released today is expected to be mixed, which may push the Reserve Bank (RBI) to pause rate cuts. The investors also feared that the government may not be able to pass the goods and services tax (GST) and Land bill in the current session. Weak trend in Asian stocks coupled with depreciation in rupee value too weighed on the sentiment. Besides, Investors failed to draw any sense of relief from the global rating agency Moody’s statement that credit conditions are likely to improve for rated Indian corporates over the next 12-18 months on the back of upturn in economic activities, government's reform push and transmission of monetary easing.

On global front, most of the Asian stocks edged lower after the latest talks between Greece and its European creditors failed to reach agreement on bailout terms as the Greek government runs low on cash. However, Chinese stocks were a bright spot, boosted by an interest rate cut on the weekend.  Back home, Indian rupee depreciated 30 paise to 64.15 against the dollar in early trade as the American currency firmed up overseas.

Back on street, all BSE sectoral indices were trading significantly in the red with banking, oil & gas, capital goods and Power indices leading the downtrend. Among them, banking index fell the most by 2.51 percent, followed by oil & gas 2.14 per cent, capital goods 2.07 per cent and Power 1.88 percent. In scrip specific development, shares of Jubilant Industries surged after the company’s arm Jubilant Agri and Consumer Products agreed to transfer its retail hypermarket business to Aditya Birla Retail via slump sale basis. Further, Moser Baer rose on plan to scale up commercial operations in LED lighting products.

The market breadth on BSE was negative, out of 2042 stocks traded, 494 stocks advanced, while 1474 stocks declined on the BSE.

The BSE Sensex is currently trading at 27040.09, down by 467.21 points or 1.70% after trading in a range of 27011.96 and 27502.91. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.57%, while Small cap index down by 1.32%.

The top losing sectoral indices on the BSE were Bankex down by 2.51%, Oil & Gas down by 2.14%, Capital Goods down by 2.07%, Power down by 1.88%, Metal down by 1.85%, while there were no gainers.

The top gainers on the Sensex were Hero MotoCorp up by 3.15%, Dr. Reddys Lab up by 1.92% and Coal India up by 1.08%. On the flip side, Tata Steel down by 3.94%, Vedanta down by 3.85%, ICICI Bank down by 3.06%, Hindalco down by 2.78% and Tata Motors down by 2.61% were the top losers.

Meanwhile, Government worried over the recent outflow of the foreign funds and sending a strong signal to overseas investors that it was committed to a non-adversarial tax regime has tried reassuring investors that its officials won’t be prejudiced. The income-tax department has asked its officials not to press foreign portfolio investors (FPIs) for payments until a committee set up by the government to deliberate on the contentious levy came up with its findings. Fresh notices will only be issued in those cases that could become time-barred.

The Central Board of Direct Taxes (CBDT) directed its field officials that they should put on hold any action against foreign investors to recover taxes by invoking MAT provisions, pending the findings of the panel headed by Justice AP Shah. Finance minister Arun Jaitley has said the government would consider the recommendation of the committee and take an appropriate decision as soon as possible.

There was widespread concern over Foreign Portfolio Investors facing MAT demand and global rating agency Fitch recently said the controversy may prompt FPIs to think twice before investing in India.

Going further, the finance ministry may announce more measures to take the sting out of the minimum alternate tax (MAT) row that has got foreign investors up in arms. The finance minister has said that he had provided relief from MAT to FPIs with prospective effect, starting this financial year. He added that in view of a ruling given by the Authority of Advance Rulings in 2012, it was not possible to provide any retrospective exemption. The Income Tax Department had issued notices to 68 FIIs totalling Rs 602 crore for nonpayment of MAT at the rate of 20 per cent for profits earned.

The CNX Nifty is currently trading at 8170.65, down by 154.60 points or 1.86% after trading in a range of 8158.75 and 8326.65. There were 3 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.19%, Dr. Reddys Lab up by 2.06% and Coal India up by 0.66%. On the flip side, Bank of Baroda down by 6.10%, Vedanta down by 3.97%, Tata Steel down by 3.87%, PNB down by 3.52% and Ambuja Cement down by 3.44% were the top losers.

Most of the Asian equity indices were trading in the red; Hang Seng decreased 0.32%, Nikkei 225 declined 0.42%, Straits Times shed 0.22%, FTSE Bursa Malaysia KLCI dipped 0.23% and KOSPI Index was down by 0.11%. On the flip side, Taiwan Weighted up by 0.07%, Shanghai Composite increased 0.66% and Jakarta Composite was up by 0.62%.