Markets make negative start; nifty breaches 7700 mark

Amidst continued selling across the global markets, local equity markets too started the session on negative note, trading now with modest losses. Sentiments were weighed down by the uncertainty of the goods and services tax (GST) Bill being passed by the Upper House after Congress created ruckus in Parliament, alleging the ruling party of having a political vendetta against its top leaders. Besides, foreign portfolio investors (FPIs) sold shares worth a net Rs 518.46 crore yesterday, as per provisional data released by the stock exchanges that also kept pressurizing the sentiment. However, positive opening of Indian rupee prevented the markets to go further down. The rupee rose by 6 paise to 66.78 against the US dollar in early trade today at the Interbank Foreign Exchange due to fresh selling of the American currency by exporters and banks.

In the scrip specific development, Binani Industries was trading lower on the Bombay Stock Exchange after the stock turned ex-dividend today for a dividend of Rs 3 per share for the year ended 31 March 2015.

On the global front, the US stocks ended lower closed lower for a second-straight day Tuesday, and the Dow Jones Industrial Average posted back-to-back declines of at least 100 points, as stocks were dogged by a rout in crude-oil prices. Asian markets were trading mostly in red as crumbling oil prices and data pointing to cooling demand from China sapped investor appetite for risk assets.

Back home traders were seen piling up position in Consumer Durables, FMCG, Bankex and IT, while selling was witnessed in Metal, Realty, Oil & Gas, Auto and TECK. The market breadth on BSE was negative in the ratio of 699: 1062, while 96 scrips remained unchanged

The BSE Sensex is currently trading at 25300.09, down by 10.24 points or 0.04% after trading in a range of 25221.61 and 25316.95. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.29%, while Small cap index was down by 0.25%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.44%, FMCG up by 0.38%, Bankex up by 0.31% and IT up by 0.10%, while Metal down by 0.96%, Realty down by 0.56%, Oil & Gas down by 0.32%, Auto down by 0.31% and TECK down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.94%, ITC up by 1.02%, SBI up by 0.68%, TCS up by 0.54% and HDFC Bank up by 0.43%. On the flip side, Dr. Reddys Lab down by 2.42%, Bharti Airtel down by 2.00%, Hindalco down by 1.98%, Vedanta down by 1.84% and Tata Steel down by 1.21% were the top losers.

Meanwhile, amid apprehension of Goods and Services Tax (GST) Bill once again getting stalled in the parliament, Reserve Bank of India Governor Raghuram Rajan has raised his optimisim about the passage of long pending GST bill in the Parliament. Rajan said he is optimistic about the passage of GST and the opportunities for compromise that will help realise the goals of the GST - a unified tax market, improvement in tax collection and broadening the tax base.

Rajan while speaking at event organised by US India Business Council (USIBC) said another priority of the RBI is to clean up banks and their non-performing assets. He said the intention is to give banks more powers to allow for greater recovery of money and give relevant stakeholders an active role in the resolution process.He also told American investors that continued focus on fiscal consolidation and inflation will mean they will reach their targeted goal.

USIBC later said that Banks and investors will have greater flexibility to raise capital and to meet the stringent capital adequacy norms. This reform is a critical step in supporting credit growth in the financial markets and the Indian economy. It added that Industry's desire for reforms also included further development of a corporate debt market, improved infrastructure trusts and debt fund structures, long-term rupee-denominated government securities, and an updated external commercial borrowing regime.

Under GST reform, central and state taxes will get subsumed into GST, which will reduce the multiplicity of taxes, and thus bring down the compliance cost. With GST, the burden of Central Sales Tax (CST) will also be phased out.

The CNX Nifty is currently trading at 7695.90, down by 5.80 points or 0.08% after trading in a range of 7674.10 and 7702.85. There were 19 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.91%, ITC up by 1.08%, Tech Mahindra up by 0.99%, Yes Bank up by 0.97% and Bank Of Baroda up by 0.80%. On the flip side, Dr. Reddys Lab down by 2.25%, Hindalco down by 2.17%, Vedanta down by 2.07%, Bharti Airtel down by 1.89% and Ultratech Cement down by 1.79% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 184.24 points or 0.95% to 19,308.36, Taiwan Weighted decreased 95.82 points or 1.15% to 8,248.04, Jakarta Composite decreased 57.21 points or 1.27% to 4,464.18, Hang Seng decreased 54.23 points or 0.25% to 21,850.90, FTSE Bursa Malaysia KLCI decreased 3.05 points or 0.18% to 1,666.19 On the flip side, KOSPI Index increased 1.52 points or 0.08% to 1,950.56, Shanghai Composite increased 22.51 points or 0.65% to 3,492.58.