Markets remain subdued with loss of 0.15% in absence of positive triggers

Local equity markets were trading lower with loss of around 0.15%, which dragged Sensex and Nifty below psychologically crucial 27,500 and 8,350 levels respectively in absence of positive triggers and sustained selling activities by market-participants on disappointing earnings and weak global cues. Besides, caution ahead of tomorrow’s May expiry in the derivatives segment and the rupee breaching the 64 mark against the dollar too weighed on the sentiment. 

On the global front, global stocks were hit due to concerns over Greece and some upbeat data that fuelled expectations that a US rate hike could come sooner than late. Minutes from the Bank of Japan's policy meeting also dented investor sentiment because it showed that some members felt that consumer prices in the world's third largest economy would not meet the central bank’s target in the 2017 fiscal year.

Closer home, most of the sectoral indices on BSE were holding in green, with prominent gainers being the stocks from PSU, Consumer Durables and Oil & Gas counters. On the flip side, Auto, IT and Technology counters were the top losers of the session. Meanwhile, shares of three public sector oil marketing companies rose as global crude oil prices declined. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. The overall market breadth on BSE was in the favour of declines which were outpacing advances in the ratio of 1329:1010; while 92 shares remained unchanged.

The BSE Sensex is currently trading at 27485.29, down by 46.12 points or 0.17% after trading in a range of 27363.72 and 27549.03. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index lost 0.10%.

The top gaining sectoral indices on the BSE were PSU up by 0.88%, Consumer Durables up by 0.88%, Oil & Gas up by 0.67%, Bankex up by 0.66%, Capital Goods up by 0.28% while, Auto down by 2.06%, IT down by 1.94%, TECK down by 1.57%, INFRA down by 0.78%, Metal down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.60%, Axis Bank up by 1.55%, Dr. Reddys Lab up by 1.28%, ONGC up by 1.22% and BHEL up by 1.16%. On the flip side, Tata Motors down by 5.30%, Mahindra & Mahindra down by 2.57%, Infosys down by 2.35%, Vedanta down by 1.61% and Wipro down by 1.36% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Arvind Subramanian has said that the government needs to reconsider levy of one percent additional tax by states over and above Goods and Services Tax (GST) rate, as it could make intra-state movement of goods expensive and hurt the 'Make in India' campaign. In order to address concerns of the manufacturing states, the GST Constitution Amendment Bill has provided for an additional one percent tax for a period of two years.

The Constitution Amendment Bill to roll out GST which has already been cleared by the Lok Sabha has been referred to Rajya Sabha Select Committee which is expected to submit its report at the beginning of the next session of Parliament. CEA has said that “It (1 percent additional tax) has the potential to undermine Make in India. That is why we need to look at this provision carefully. This period that we have gained, some of these issues need to be looked at again.

Subramanian said that as GST is a destination-based levy, it would help the manufacturing states make good the loss of revenue but the irony of such an additional tax will be that it would favour international trade over intra-national trade, because every time a good passes a border it had to be an extra non Vat-able tax. He also cited an example that a good going from Gujarat to Tamil Nadu, crossing four states would embody an additional tax of about 4-5 percent, because it is 1 percent every state. That might make it easier to import into Tamil Nadu from Bangkok.

The CNX Nifty is currently trading at 8316.45, down by 22.90 points or 0.27% after trading in a range of 8277.95 and 8334.85. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.85%, PNB up by 1.73%, Axis Bank up by 1.71%, Coal India up by 1.56% and ONGC up by 1.50%. On the flip side, Tech Mahindra down by 12.34%, Tata Motors down by 5.39%, Mahindra & Mahindra down by 2.91%, Infosys down by 2.31% and Vedanta down by 1.72% were the top losers.

Asian markets were trading mostly lower; Hang Seng trading lower by 245.51 points or 0.87% to 28,004.35; Straits Times trading lower by 44.22 points or 1.28% to 3,415.76; Jakarta Composite trading lower by 41.4 points or 0.78% to 5,279.50; KOSPI Index trading lower by 36 points or 1.68% to 2,107.50; FTSE Bursa Malaysia KLCI trading lower by 12.9 points or 0.73% to 1,751.17.

On the flip side, Taiwan Weighted up by 24.13 points or 0.25% to 9,693.54; Shanghai Composite up by 28.29 points or 0.58% to 4,939.19 and Nikkei 225 up by 35.1 points or 0.17% to 20,472.58 were the only gainers of the session.