Benchmarks continue to trade in red in late morning session

After getting a gap down start, Indian equity benchmarks continued to trade in red in late morning session as funds and retail investors engaged in reducing positions, tracking weakness in the global peers. Weakness was also visible in the broader markets with the S&P BSE Mid-cap and the S&P BSE Small-cap indices losing over half a percent each in trade. Investors remained jittery over the logjam in Parliament about the key goods and service tax (GST) bill and global volatility after China unexpectedly devalued its currency. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 736 crore on August 11, 2015. Depreciating rupee against the dollar also dampened the trading sentiment. However, losses remained capped with National Statistical Commission (NSC) chairman Pronab Sen’s statement that the new GDP numbers are not flawed and Central Statistics Office (CSO) is following the correct methodology for computing national accounts and is on the right track. Also, the government’s indirect tax collections in July 2015 grew 39.1 per cent over their levels in July last year, bolstered by significant growth in excise and service tax collections due to changes in the tax rates. Meanwhile, some investors remained on the sidelines and refrained from any buying activity ahead of IIP and inflation data to be released later in the day.

On global front, Asian stocks edged lower as China allowed the yuan to fall sharply for a second straight day, forcing investors to seek refuge in safe-haven government debt. Overnight, US stocks declined broadly on Tuesday as China's devaluation of its yuan currency hit companies with a big exposure to the world's No 2 economy and added to worries about the global economic outlook. Back home, Indian rupee continued to follow a downward trend on Wednesday and was trading 48 paise down against the US dollar to 64.67, its weakest level since September 2013, following appreciation of the dollar overseas after China devalued the yuan for the second straight day.

Back on street, stocks from IT, Teck and Consumer Durables counters were supporting the markets’ uptrend, while those from Metal, Realty and Oil & Gas counters was adding to the underlying cautious undertone. In scrip specific development, Shares of Jubilant Life Sciences have surged after the company’s consolidated net profit jumped by over 26 times to Rs.128.06 crore for the first quarter ended June, helped by lower expenses. On the other hand, shares of NMDC declined after the company reported a fall of 47.25% in its net profit at Rs 1010.12 crore for the quarter ended June 30, 2015 as compared to Rs 1915.01 crore for the same quarter in the previous year.

The market breadth on BSE was negative, out of 2384 stocks traded, 764 stocks advanced, while 1535 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27747.19, down by 118.90 points or 0.43% after trading in a range of 27628.78 and 27883.33. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.93%, while Small cap index down by 0.68%.

The top gaining sectoral indices on the BSE were IT up by 1.38%, TECK up by 0.86% and Consumer Durables up by 0.63%, while Metal down by 2.64%, Realty down by 2.27%, Oil & Gas down by 1.85%, PSU down by 1.77%, INFRA down by 1.42% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 5.06%, Infosys up by 2.45%, Tata Steel up by 1.44%, Lupin up by 1.36% and TCS up by 1.06%. On the flip side, Hindalco down by 4.74%, Coal India down by 3.45%, Vedanta down by 3.27%, Tata Motors down by 3.15% and Bharti Airtel down by 2.52% were the top losers.

Meanwhile, India’s Indirect tax collections jumped by 39.1% in the month of July to Rs 56,739 crore, as compared to Rs 40,802 in the corresponding month of previous year, on account of sharp pick up in excise mop up, achieving 32.6 percent fixed for budget estimate (BE) 2015-16 i.e. Rs 64,6267 crore. Indirect tax collections increased even after adjusting for increase in duties on fuel and withdrawal of tax incentives for automobile, an evidence that the economic recovery may be picking up pace.

As per the data released by the Finance Ministry, in July the central excise collections surged by 64.8 percent to Rs 22,273 crore; customs duty rose by 23.2 percent to Rs 18,996 crore, while service tax revenues were up by 30.3 per cent to Rs 15,470 crore.

In the first four months of current financial year, Indirect tax collections surged by 37.6% to Rs 210455 crore as against 152896 crore during the similar period of the last financial year, on the back of higher excise collections. During April-July, the excise collections jumped by 75.4 percent to Rs 83,454 crore, which was 36.6 per cent of the full year Budget estimate; Revenues from service tax rose by 20.1 percent to Rs 60,925 crore and Customs collections were up by 21 percent to Rs 66,076 crore, 32 per cent of what has been budgeted for the 2015-16 financial year.

The development has come following 17.47% rise in car sales in July, highest in three months and marking the ninth consecutive month of domestic sales growth providing evidence of improvement in consumer sentiment.

The CNX Nifty is currently trading at 8414.50, down by 47.85 points or 0.57% after trading in a range of 8382.35 and 8446.95. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 4.67%, Infosys up by 2.04%, Bank of Baroda up by 1.54%, Tata Steel up by 1.46% and TCS up by 1.01%. On the flip side, Hindalco down by 4.75%, NMDC down by 4.47%, Coal India down by 3.63%, BPCL down by 3.58% and Vedanta down by 3.24% were the top losers.

Asian markets were trading in red; Hang Seng was down by 1.75%, Nikkei 225 down by 1.8%, Jakarta Composite down by 2.59%, Taiwan Weighted down by 1.44%, Straits Times down by 2.54%, KOSPI Index down by 1.44%, FTSE Bursa Malaysia KLCI down by 1.42% and Shanghai Composite down by 0.45%.