Markets continue to trade weak; Sensex dips below 26800

Markets continue to show a sluggish trend in the early noon session, trading near the lowest point of the day on the back of sustained selling activities by market-participants. The sentiment turned weak despite industrial production growing at a nearly three-year high of 6.4 per cent in August on account of improvement in manufacturing as well as mining activity and better off take of capital goods. Rise in retail inflation to 4.41 per cent in September seems to have a negative impact. The depreciation in the rupee too dampened the sentiment. The Indian rupee declined by 26 paise to 65.01 against the US dollar in early trade today on increased demand for the US currency from importers, adding to the market gloom.

On the global front, Asian markets were trading mostly in red, after Chinese export data added more evidence that the world’s No. 2 economy is stalling. Back home, both sensex and Nifty were trading below crucial 26,800 and 8,150 levels, respectively. In scrip specific development, share of Reliance Capital was trading up by over 5.42% after the company announced that Nippon Life Insurance increased its stake in Reliance Capital Asset Management from existing 35% to 49%. Cox & Kings was trading higher after the company engaged in travel support services business announced that it has acquired UK-based hotel booking website LateRooms.com from travel major TUI Group for GBP 8.5 million (around Rs 85 crore).

The BSE Sensex is currently trading at 26793.75, down by 110.36 points or 0.41% after trading in a range of 26783.74 and 26918.52. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index added 0.30%.

The top gaining sectoral indices on the BSE were Realty up by 1.11%, Capital Goods up by 0.39%, Power up by 0.32%, FMCG up by 0.16% and Consumer Durables up by 0.12%, while IT down by 1.67%, TECK down by 1.55%, Metal down by 0.89%, Oil & Gas down by 0.42% and PSU down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.55%, Lupin up by 1.11%, BHEL up by 1.00%, ITC up by 0.91% and Coal India up by 0.82%. On the flip side, Hindalco down by 4.23%, ONGC down by 3.38%, Vedanta down by 3.34%, Infosys down by 2.94% and Tata Steel down by 2.57% were the top losers.

Meanwhile, the Centre and states have completed the drafting of model Goods and Services Tax law as well as an integrated-GST or iGST law, which will be put up in public domain by early November. The model GST law and iGST law has been circulated among the states. The Empowered Committee would meet soon to discuss them. The government has already put up three reports of empowered committee on GST on refunds, payment process and registration for public comments by October 31.

The reports to be put up for public comment have recommended that the RBI’s core banking solution e-Kuber be used for consolidating and settlement of accounts under the GST system. It has also suggested that Internet banking, over the counter payment and NEFT and RTGS should be extensively used to facilitate payments under GST.

The drafts of the proposed legislations are based on three principles -- definitional clarity, certainty in assessment and promoting ease of doing business, the official said. The model GST law and iGST law have been drafted by the officials of both Centre and States. The Central GST (CGST) will be framed based on the model GST law, while the states will draft their own State GST (SGST) based on the draft model law with minor variation incorporating state based exemption.

Although the government had planned to roll out the GST, touted as the most comprehensive indirect tax reform since Independence, from April 1, 2016, but it seems difficult as the Constitution Amendment Bill is stuck in the Rajya Sabha where the ruling party does not have a majority. The government, however, is going ahead with the preparatory work necessary for smooth implementation of the GST, which will subsume various levies like excise, service tax, sales tax, octroi, etc, and will ensure a single indirect tax regime for the entire country.

The CNX Nifty is currently trading at 8120.40, down by 23.20 points or 0.28% after trading in a range of 8109.55 and 8150.25. There were 26 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.11%, Bajaj Auto up by 1.76%, Ultratech Cement up by 1.33%, Lupin up by 1.25% and Yes Bank up by 1.21%. On the flip side, Hindalco down by 4.00%, Vedanta down by 3.56%, ONGC down by 3.25%, Infosys down by 2.90% and HCL Tech. down by 2.85% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 203.96 points or 1.11% to 18,234.71, Jakarta Composite decreased 140.7 points or 3.04% to 4,490.01, Hang Seng decreased 128.98 points or 0.57% to 22,601.95, Shanghai Composite decreased 14.08 points or 0.43% to 3,273.58, Taiwan Weighted decreased 5.8 points or 0.07% to 8,567.92 and KOSPI Index decreased 4.74 points or 0.23% to 2,016.89, while FTSE Bursa Malaysia KLCI increased 1.12 points or 0.07% to 1,710.98.