Markets suffer sudden slump; benchmarks slip below the crucial levels

Markets after witnessing a strong rally in last session have suffered sudden and sharp slump in the afternoon trade, the benchmarks that were going through a choppy trade have lost their way completely, with the Sensex slipping below the crucial psychological level of 28500 and the Nifty losing its 8600 mark, trading near the intraday low. Although, the trade had taken a cautious turn after the opening but traders concern grew with Rajya Sabha once again getting adjourned today. The upper house could not transact any business for the second successive day on Wednesday as treasury and opposition benches stuck to their positions, with opposition parties aggressively pressing for the resignation of external affairs minister Sushma Swaraj along with Rajasthan and Madhya Pradesh chief ministers. Traders were not getting any support with report of surge in FDI in May to four months high, also there were some earnings announcements too, weighing down the sentiments. Bajaj Auto’s profit grew by 37.2 percent year-on-year to Rs 1,015 crore, but its revenue at Rs 5,613.50 missed the target. The continued weakness in rupee too was adding to the negative milieu of the market, The Indian rupee weakened 7 paise to 63.65 against the US dollar after ending modestly weaker in last session.

Though, the metal pack continue to remain under pressure on weak global cues but some buzz was seen in the steel stocks, after Union minister for steel Narendra Singh Tomar said the government is committed to addressing every problem and bottleneck of the ailing steel industry and achieving the target of production of 30 crore tonne per annum by 2025. The broader markets too were giving up gains and were trading mixed, while on sectoral front the consumer durables and oil & gas stocks were maintain their lead.

The BSE Sensex is currently trading at 28419.03, down by 85.90 points or 0.30% after trading in a range of 28385.20 and 28578.33. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.04%, while Small cap index was higher by 0.66%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.45%, Oil & Gas up by 0.84%, Realty up by 0.67%, IT up by 0.22%, Auto up by 0.13%, while Bankex down by 0.61%, Metal down by 0.50%, Power down by 0.43%, FMCG down by 0.41%, Capital Goods down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.94%, Mahindra & Mahindra up by 1.38%, Maruti Suzuki up by 1.15%, Infosys up by 0.90% and GAIL India up by 0.65%. On the flip side, Bajaj Auto down by 3.74%, Tata Steel down by 3.57%, Hindustan Unilever down by 2.00%, ONGC down by 1.40% and Lupin down by 1.26% were the top losers.

Meanwhile, GST Bill has finally won majority support of the Rajya Sabha Select Committee, which endorsed almost all the provisions, while also agreeing to demands for five-year compensation to states. The committee, headed by BJP's Bhupender Yadav, in its report submitted to the House suggested changes in clauses 9 pertaining to compensation and levy of 1 percent additional tax by the states on inter-state supply of goods. The panel felt that the 1 percent additional inter-state tax may lead to cascading of taxes, and may call for clarifying Clause 18 to prevent that.

The panel while, endorsing 19 provisions like keeping alcohol out of the regime and leaving it to the council to decide levy on petroleum products, retained the representation of the Centre and States in the GST Council at the proposed level at one-third and two-thirds.

The provision in the current Bill states that the Central government “may” compensate states for a period of up to five years for any revenue loss.  The report has suggested that this be substituted with a commitment to compensate for five years. This would mean 100 per cent compensation, compared to 100 per cent revenue compensation in the first three years.

Though, the majority of the committee members endorsed almost all the GST Bill provisions, Congress, AIADMK and Left parties gave notes of dissent. In its dissent, the Congress favoured a simple 18 per cent GST on all goods including petroleum products and alcohol and opposed states being given powers to levy one per cent additional tax. On the same time AIADMK and Left parties in its notes termed some of the provisions as impinging on the legislative sovereignty of both Parliament and state legislatures.

The CNX Nifty is currently trading at 8598.40, down by 35.10 points or 0.41% after trading in a range of 8589.95 and 8654.75. There were 12 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 6.53%, Dr. Reddys Lab up by 1.92%, Mahindra & Mahindra up by 1.30%, BPCL up by 1.19% and Maruti Suzuki up by 1.04%. On the flip side, Bajaj Auto down by 3.95%, Tata Steel down by 3.60%, Hindustan Unilever down by 2.24%, Zee Entertainment down by 2.05% and Grasim Industries down by 1.50% were the top losers.

The Asian markets were showing a mixed trend, KOSPI Index was tad higher by 0.02% to 2,065.07, Straits Times gained10.42 points or 0.31% to 3,369.59, Shanghai Composite was up by 89.14 points or 2.21% to 4,115.18, Nikkei 225 added 90.28 points or 0.44% to 20,683.95 and Hang Seng surged by137.39 points or 0.54% to 25,420.01.

On the other hand, Taiwan Weighted declined by 127.58 points or 1.43% to 8,791.12, Jakarta Composite lost 1.63 points or 0.03% to 4,905.06 and FTSE Bursa Malaysia KLCI was down marginally by 0.02% to 1,729.21.