Benchmarks witness consolidation; end marginally in red

Indian equity benchmarks ended a choppy day of trade on a flat note, with a negative bias, amid selling in financial, pharma and capital goods shares. Earlier, markets traded in fine fettle in early deals supported by US Treasury Department report that amid weaker outlook across emerging market economies India's recovery has strengthened under a new reform agenda, since it is not a large importer. Traders also got some encouragement with the statement of finance ministry that the country will grow by 7.5 per cent in the current fiscal, slightly higher than international rating agency Standard & Poor's latest forecast, saying the government will roll out more reforms measures to push growth.

However, markets took U-turn in noon deals, tracking a slump in China markets which got pounded by over three percent. Sentiments also remained dampened after report that government deferred a decision on convening the Winter Session of Parliament till next week, amid indications that it could be summoned any day after November 19. But a final decision will be taken by the Cabinet Committee of Parliamentary Affairs (CCPA) on October 26.

On the global front, European counters opened flat with a negative bias ahead of the European Central Bank’s meeting. Asian markets ended mostly in green, led by the Japanese market, which not only boosted the sentiments in the region but helped the MSCI Asia Pacific Index climb for the first time this week. On the other hand the Chinese market suffered sharp drop, biggest in a month on heavy volume, led by smaller companies.

Back home, depreciation in Indian rupee too weighed down sentiments. Rupee was trading at 65.16 per dollar at the time of equity markets closing compared with its previous close of 65.05 per dollar. However, some support came with reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 523.69 crore on October 20, 2015, as per provisional data released by the stock exchanges.

Meanwhile, oil producing companies remained under pressure after international crude prices fell with data from an US industry group showing a larger-than-expected build in US crude inventories last week. On the flip side, aviation stocks edged higher with a report that domestic air traffic posted a 15 percent increase last month, as airlines carried 6.67 million passengers when compared with 5.82 million in September 2014.

The NSE’s 50-share broadly followed index Nifty declined by around ten points but managed to hold the psychological 8,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around twenty points to end below its crucial 27,300 mark. Broader markets too struggled to get any traction during the trade and ended the session with a cut of around one third of a percent. The market breadth was evenly divided, as there were 1,330 shares on the gaining side against 1,377 shares on the losing side while 159 shares remain unchanged.

Finally, the BSE Sensex declined by 19.17 points or 0.07% to 27287.66, while the CNX Nifty lost 9.95 points or 0.12% to 8251.70.

The BSE Sensex touched a high and a low 27445.24 and 27190.55, respectively. The BSE Mid cap index was down by 0.15%, while Small cap index was down by 0.37%. 

The top gaining sectoral indices on the BSE were Metal up by 1.17%, TECK up by 0.57%, IT up by 0.43% and Auto up by 0.27%, while Realty down by 1.79%, Capital Goods down by 1.04%, Healthcare down by 0.78, Bankex down by 0.77% and Oil & Gas down by 0.54% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.75%, Bajaj Auto up by 3.28%, Bharti Airtel up by 2.70%, Tata Steel up by 1.66% and NTPC up by 1.64%. On the flip side, Dr. Reddys Lab down by 3.30%, SBI down by 1.87%, BHEL down by 1.77%, GAIL India down by 1.50% and Larsen & Toubro down by 1.44% were the top losers.

Meanwhile, a recent report by a panel on Income Tax return forms has recommended separate returns for input and output. With this move, India Inc will now have to file monthly returns with due invoices of business-to-business (B2B) transactions under the proposed goods and services tax (GST) regime. The panel, which has officials from Centre as well as the state governments, has presented its fourth report after the previous ones on registration, refund and payment process.

The report stated that there will be common e-return for central GST, state GST, integrated GST and additional tax. According to the report, vendor management would also be very important and details of inward supplies would be auto populated in the return of the buying entity and any difference with actual books of accounts would have to be reconciled. Besides, the panel has mooted a separate return form for non-resident tax payers.

Tax department has recently given an assurance that the Goods and Service Tax (GST) will be implemented anytime during a year once the bill is passed in Rajya Sabha. GST, once rolled out, will include various levies like excise, service tax, sales tax, octroi, etc, and ensure a single indirect tax regime for the entire country. GST, seen as the most comprehensive reform of indirect taxes since independence, is expected to lift the country's GDP by one to two percentage points.

The CNX Nifty touched a high and low 8294.40 and 8217.15 respectively. The top gainers on Nifty were Vedanta up by 4.20%, Bajaj Auto up by 3.40%, Bharti Airtel up by 2.35%, NTPC up by 1.76% and Tata Steel up by 1.74%. On the flip side, Dr. Reddys Lab down by 3.45%, Asian Paints down by 2.28%, SBI down by 2.14%, BHEL down by 1.91% and PNB down by 1.85% were the top losers.  European Markets were trading in the green; France’s CAC was up by 0.64%, Germany’s DAX was up by 0.90% and UK's FTSE was up by 0.58%.   

The Asian equity markets ended mostly in green on Wednesday, with investors eyeing the start of earnings season after a tough quarter for many companies. Hong Kong stock exchange was closed on account of ‘Chung Yeung Day’ holiday. Japan’s trade deficit in September was a worse than forecast 114.48 trillion yen ($95 billion) as exports slowed, especially to China. The trade data released showed exports rose only 0.6 percent from the year before to 6.42 trillion yen (53 billion) while imports fell 11 percent, to 6.53 trillion yen ($54 billion). Japan’s trade balance has improved with the fall in prices of crude oil and other fuels. In September, imports of oil, gas and coal fell 36 percent from the year before.  The trade deficit in September of 2014 was 961.98 billion yen. In August, it was 569 billion yen ($4.8 billion). Japan’s All Industries Activity Index fell to a seasonally adjusted -0.2%, from -0.1% in the preceding month whose figure was revised down from 0.2%. Japan’s trade balance rose to a seasonally adjusted -0.36T, from -0.37T in the preceding month whose figure was revised down from -0.36T. Singapore’s annual consumer prices are forecast to have contracted for the 11th consecutive month, pressured by persistently lower prices of car permits and housing costs. The all-items consumer price index (CPI) was seen down 0.7 percent in September on a year-on-year basis. In August, headline CPI fell 0.8 percent, the steepest drop since late 2009.