Markets give up all the early gains; benchmarks trade flat with negative bias

Markets have given up all their initial gains in the early noon session, as the cautiousness of slow economic growth gripped the domestic markets. The 50-share index Nifty after slipping below its crucial psychological level of 8,400, was trading in a flat territory. The regional markets continue to perform well, with China’s benchmark stock index rallying for a third day, raising hopes that measures taken by Beijing to prevent a full-blown market crash have worked. On domestic front, traders were concerned about the slow industrial production numbers announced late Friday and Capital goods stocks were among major losers, let down by disappointing IIP data, which grew 2.7 per cent in May, lower than the downwardly revised 3.36 per cent growth recorded in April. Now all eyes are on CPI inflation data for June, scheduled to be announced after the market hours. Back on street, the broader markets were witnessing some buying interest along with technology, IT and oil & gas stocks, while the major drag was coming from selling in banking, capital goods and metal stocks. The PSU banking stocks too have given up their initial gains despite report that the finance ministry is planning to pump an extra Rs 12,000 crore into state-owned banks laden with bad debt as the first round of a strategy to get them to resume lending and provide support. This money is in addition to the Rs 7,940 crore allocated in the budget toward capitalization. The overall market breadth remained positive, with the broader indices outperforming the benchmarks. The BSE mid-cap and small-cap indices were up by 0.25 and 0.50 per cent respectively .

The BSE Sensex is currently trading at 27650.27, down by 11.13 points or 0.04% after trading in a range of 27635.06 and 27791.21. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices trading in green were outperforming the benchmarks; the BSE Mid cap index was up by 0.27%, while Small cap index gained 0.56%.

The gaining sectoral indices on the BSE were TECK up by 0.65%, IT up by 0.58%, Oil & Gas up by 0.47%, Consumer Durables up by 0.13%, Auto up by 0.12%, while Metal down by 0.88%, Capital Goods down by 0.68%, Realty down by 0.43%, INFRA down by 0.37%, Bankex down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.72%, Maruti Suzuki up by 1.58%, Sun Pharma Industries up by 1.51%, Cipla up by 1.31% and TCS up by 1.10%. On the flip side, ONGC down by 1.82%, Hindalco down by 1.67%, Larsen & Toubro down by 1.33%, Vedanta down by 1.20% and BHEL down by 0.97% were the top losers.

Meanwhile, showing a healthy growth, Indirect tax revenues grew 37.5 per cent to nearly Rs 1.54 lakh crore in the first quarter of the current fiscal, powered by a robust show in excise collections. The growth in collections indicates that the underlying momentum in the economy is improving across all sectors including manufacturing as reflected in healthy excise tax collections.

As per the government data, Indirect tax collections in April-June quarter increased to Rs 1,53,980 crore from over Rs 1.12 lakh crore in the year-ago period. In the quarter central excise collections surged by 81 percent to Rs 61,661 crore, from Rs 34,067 crore a year earlier. Customs collections were up 20.2 percent to Rs 47,080 crore, from Rs 39,175 crore in April-June 2014, while Service tax collections went up by 16.4 percent to Rs 45,239 crore in April-June 2015. For the month of June, the overall indirect tax collections surged by 33.3 percent to Rs 57,357 crore. Excise tax was up 67 per cent at Rs 22,717 crore for the month, while Service tax inflows were up 14 percent on year at Rs 17,546 crore and customs collections were up 21 percent at Rs 17,094 crore.

The government has stated that the growth in underlying indirect tax collections of 14.5 per cent suggests a healthy increase in nominal GDP (gross domestic product) growth which constitutes the tax base for indirect tax collections. The indirect tax collections reflect in part the effect of the additional measures taken by the central government, including the excise hike on diesel and petrol, the increase in clean energy cess and withdrawal of exemptions for motor vehicles and consumer durables, besides service tax rate hike to 14 per cent. For the full year the government is targeting Rs 6.46 lakh crore from indirect taxes this financial year, a growth of 18.8 percent compared with previous financial year.

The CNX Nifty is currently trading at 8357.75, down by 2.80 points or 0.03% after trading in a range of 8355.40 and 8404.80. There were 23 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.76%, Asian Paints up by 2.53%, HCL Tech. up by 1.85%, BPCL up by 1.83% and Maruti Suzuki up by 1.51%. On the flip side, Yes Bank down by 1.98%, ONGC down by 1.79%, Hindalco down by 1.77%, Larsen & Toubro down by 1.53% and Vedanta down by 1.44% were the top losers.

All the major Asian markets were trading in green, Hang Seng was up by 15.37 points or 0.06% to 24,916.65, Straits Times was higher by16.13 points or 0.49% to 3,296.01, Jakarta Composite added 27.09 points or 0.56% to 4,886.12, KOSPI Index inched up by 30.35 points or 1.49% to 2,061.52, Shanghai Composite surged by 112.42 points or 2.9% to 3,990.22, Taiwan Weighted increased 119.79 points or 1.34% to 9,033.92 and Nikkei 225 was higher by 309.94 points or 1.57% to 20,089.77.