Benchmarks extend losses in late afternoon session

Indian equity markets extended losses hovering near the lowest point of the day in the late afternoon session on account of selling in front line blue chip counters. The sentiments were under pressure despite government-appointed panel suggested a standard GST rate of 17-18 percent. The GST panel headed by chief economic adviser backed a lower rate and simpler structure that the opposition Congress party had demanded. Traders were seen piling position in Realty, Bankex and Consumer Durables stocks while selling was witnessed in FMCG, PSU and Metal sector stocks. In the scrip specific development, shares of tobacco and cigarette majors such as ITC and Godfrey Phillips India were trading under pressure after a Finance Ministry panel headed by CEA Arvind Subramanian suggested 40% Goods and Services Tax (GST) rate on tobacco products.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,800 and 25,600 levels respectively. The market breadth on BSE was positive in the ratio of 1393:1207 while 158 scrips remained unchanged.

The BSE Sensex is currently trading at 25505.77, down by 132.34 points or 0.52% after trading in a range of 25495.09 and 25785.53. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.04%, while Small cap index up by 0.26%.

The gaining sectoral indices on the BSE were Realty up by 0.94%, Bankex up by 0.28%, Consumer Durables up by 0.14% and Capital Goods up by 0.03%, while FMCG down by 2.64%, PSU down by 0.79%, Metal down by 0.74%, Oil & Gas down by 0.42% and Auto down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.92%, Tata Steel up by 2.00%, Hindustan Unilever up by 1.40%, HDFC up by 1.11% and Lupin up by 0.90%.

On the flip side, ITC down by 6.64%, Coal India down by 2.52%, ONGC down by 1.74%, Reliance Industries down by 1.36% and NTPC down by 1.26% were the top losers.

Meanwhile, apex industry body, The Associated Chambers of Commerce of India (ASSOCHAM) has welcomed the report of Chief Economic Advisor (CEA) Arvind Subramanian- led panel recommending standard GST rate of 18 percent and lower rate of 12 percent on specified goods stating that this rate structure is quite appropriate and will be anti-inflationary for indigenous goods, though the cost of services will go up including some essential services like banking, telecom and information technology (IT).

Further, ASSOCHAM said that the removal of one per cent additional tax is a welcome step as it will remove the cascading effect on cost of indigenous production by four to six per cent as goods move four to six times during entire value chain and said that the higher rate should only be applicable to sin goods. ASSOCHAM fully supports the CEA`s view that rates can`t be put in the Constitution Amendment Bill to make the rates inflexible, however the chamber feels that rates should be stable and predictable to attract investments.

A key government committee headed by Arvind Subramanian on goods and services tax (GST) has suggested a standard GST rate of 17-18 percent and dropping of the one per cent additional tax on inter-state sales. It recommended 12 percent for 'low rate goods' and 40 percent for demerit goods. For precious metal, it recommended a range of 2-6 percent. Also, the panel recommended early inclusion of alcohol and petroleum products in GST, stating that bringing alcohol and real estate within the scope of the GST would further the government's objectives of improving governance and reducing black money generation without compromising on states' fiscal autonomy.

The CNX Nifty is currently trading at 7754.30, down by 27.60 points or 0.35% after trading in a range of 7750.65 and 7825.40. There were 26 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 3.85%, Sun Pharma up by 2.94%, Tata Steel up by 2.06%, Hindustan Unilever up by 1.67% and HDFC up by 1.22%.

On the flip side, ITC down by 6.67%, Cairn India down by 3.09%, Coal India down by 2.64%, ONGC down by 1.76% and Reliance Industries down by 1.50% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 5.56 points or 0.33% to 1,673.43, Shanghai Composite increased 11.94 points or 0.34% to 3,536.93, Jakarta Composite increased 30.72 points or 0.68% to 4,539.17, Taiwan Weighted increased 55.67 points or 0.66% to 8,454.27 and Nikkei 225 increased 193.67 points or 0.99% to 19,698.15.

On the other hand, Hang Seng decreased 32.67 points or 0.15% to 22,203.22 and KOSPI Index decreased 10.73 points or 0.54% to 1,963.67.

The European markets were trading in green; UK’s FTSE 100 increased 30.33 points or 0.49% to 6,268.62, France’s CAC increased 36.04 points or 0.76% to 4,750.83 and Germany’s DAX increased 122.23 points or 1.14% to 10,874.33.