Markets remain deep in red despite assurance from revenue secretary

The intense selling witnessed in early trade seems to be stalling a bit towards the mid of the trade, though the damage done is clearly visible with benchmarks still trading lower by around a percent each, way below their crucial psychological levels of 28000 (Sensex) and 8500 (Nifty). Traders after a knee-jerk reaction of MP Shah Panel’s proposal to SEBI of monitoring unusual rise in stock prices and regulating P-Notes, were analyzing the situation, though revenue secretary Shaktikanta Das has reportedly said that the government will consult stakeholders on SIT's recommendations on P-Notes and no need for market to panic as yet on P-Note issue. Traders were also concerned about the Monsoon Session of Parliament resuming with continuation of the stand-off between the government and the Opposition and the Rajya Sabha getting adjourned for the day. The sentiments were also weighed down by the weakness in other regional peers, while the European markets too are likely to get a cautious opening, as the IMF and European Commission has said that representatives of Greece's creditors will begin talks in Athens on a third bailout package to the debt-swamped Greek government. Back on street, there was red all across the street and none of the sectoral gauges were spared with some of them suffering cut of over one and half a percent, led by capital goods and metals.

The BSE Sensex is currently trading at 27810.18, down by 302.13 points or 1.07% after trading in a range of 27773.32 and 28117.65. There were just 5 stocks advancing against 25 stocks declining on the index.

The broader indices too were trading in red; the BSE Mid cap index was down by 0.48%, while Small cap index declined by 0.40%.

The top losing sectoral indices on the BSE were Capital Goods down by 1.79%, Metal down by 1.71%, Bankex down by 1.35%, INFRA down by 1.23%, Oil & Gas down by 1.13%.

The top gainers on the Sensex were Cipla up by 1.30%, NTPC up by 0.91%, Bajaj Auto up by 0.90%, HDFC up by 0.27% and Mahindra & Mahindra up by 0.13%. On the flip side, Tata Motors down by 3.44%, Tata Steel down by 3.43%, ONGC down by 2.84%, Bharti Airtel down by 2.84% and Hindalco down by 2.71% were the top losers.

Meanwhile, Reserve Bank of India (RBI), before offering licence for small and payment banks has asked the I-T department to get a ‘tax angle’ verification done for corporate entities seeking licence to operate small finance and payment banks in the country. The inputs sought relate to financial and tax history of close to four dozen entities, their owners and senior executives who have applied for getting RBI's licence.

RBI Governor Raghuram Rajan had recently written to the Central Board of Direct Taxes (CBDT), the apex policy making body of the Income Tax department, to expedite the matter and provide the banking regulator with inputs about individuals at the helm of these entities with businesses spread across the country and abroad. CBDT on its part has asked its investigation and regular assessment ranges across the country to “quickly” collect the data and submit them so that RBI can take a final view on the grant of licences to eligible parties. In case there is no adverse finding, the I-T department will send an all okay report. On the same time any adverse record or observation about financial dealings of these entities, found out either by way of an earlier action by the taxman or through regular mechanism of intelligence and data gathering, should be reported.

The objective of licencing small banks is to promote financial inclusion by offering saving vehicles and credit to small business units and other unorganised sector entities. The RBI had received 72 applications for small finance bank licences and 41 applications for payment bank licences and governor Rajan had earlier said that RBI would be able to announce new sets of bank licences, or at least one set of them, by the end of August.

The CNX Nifty is currently trading at 8437.30, down by 84.25 points or 0.99% after trading in a range of 8423.30 and 8492.20. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.65%, Cipla up by 1.42%, Asian Paints up by 0.98%, Grasim Industries up by 0.96% and Zee Entertainment up by 0.95%. On the flip side, Tata Steel down by 3.45%, Hindalco down by 3.16%, Tata Motors down by 3.13%, ONGC down by 2.76% and Cairn India down by 2.69% were the top losers.

Asian markets were trading in red, Hang Seng slumped by 643.86 points or 2.56% to 24,484.65,

Taiwan Weighted lost 211.18 points or 2.41% to 8,556.68, Shanghai Composite plunged by 201.98 points or 4.96% to 3,868.93, Nikkei 225 was down by 194.43 points or 0.95% to 20,350.10, Jakarta Composite lost 37.65 points or 0.78% to 4,818.94, Straits Times declined by 32.62 points or 0.97% to 3,320.03, KOSPI Index was lower by 7.15 points or 0.35% to 2,038.81 and FTSE Bursa Malaysia KLCI was down by 2.54 points or 0.15% to 1,718.22.