Benchmarks trim losses; trade continues in red

Indian equity markets trimmed their losses and continue to trade weak in late morning session on account of selling in frontline blue chip counters. Sentiments remained down-beat with the report that corporate earnings growth is expected to fall around 2% for the December quarter owing to a plunge in commodity prices coupled with weaker investment demand. The much-anticipated turnaround in earnings of India Inc is unlikely to take place in the December quarter season. Furthermore, Industry body CII's President Sumit Mazumder said that the economy is not doing as good as it was expected and the pace of reforms have slowed down. However, investors got some support with report that Growth in India's services firms rose at its fastest pace in 10 months in December as demand picked up. The Nikkei/Markit Services Purchasing Managers' Index surged to 53.6 in December from November's 50.1, marking a sixth month above the 50-level that separates growth from contraction.

On the global front, Asian markets were trading mostly in red on Wednesday as floundering crude oil prices continued to dampen risk sentiment, while the dollar and yen drew support from anxiety over global growth and geopolitical risk stemming from Iran-Saudi tensions. Overnight, US stocks ended flat as concerns about the global economy weighed on sentiment. Back on street, stocks from Oil & Gas, Power and PSU counters were supporting the markets’ uptrend, while those from FMCG, Metal and Banking counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Shares of PBA Infrastructure have surged after the company bagged a huge engineering, procurement and construction (EPC) order worth Rs 157.75 crore. Furthermore, Premier Explosives has rallied after the company signed, a Memorandum of Understanding (MOU) with Israel Aerospace Industries for exploring potential business opportunities.

The market breadth on BSE was positive in the ratio of 1674: 786 while 112 scrips remained unchanged.

The BSE Sensex is currently trading at 25573.69, down by 6.65 points or 0.03% after trading in a range of 25502.96 and 25632.57. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.49%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.29%, Power up by 0.35%, PSU up by 0.29%, TECK up by 0.22%, IT up by 0.14% while, FMCG down by 0.58%, Metal down by 0.58%, Bankex down by 0.23%, Auto down by 0.22%, Consumer Durables down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.14%, Bharti Airtel up by 1.93%, GAIL India up by 1.68%, TCS up by 1.05% and Cipla up by 0.87%. On the flip side, ICICI Bank down by 1.50%, ITC down by 1.37%, Tata Motors down by 1.24%, Tata Steel down by 1.17% and Adani Ports &Special down by 0.96% were the top losers.

Meanwhile, in a bid for early passage of the crucial tax legislation, the trading association is in the support of the Union government for Goods and Services Tax (GST). Confederation of All India Traders (CAIT) has urged the opposition parties, Congress and AIADMK, to give a 'safe passage' to GST in the parliament. CIAT is also planning to launch a nationwide campaign about GST from January 10 till the budget session in February.

At a national conference of trade leaders, about 200 leading trade leaders of prominent trade bodies from all over the country unanimously resolved to support of government's push for GST and demanded that the tax regulation be implemented as early as possible. Though traders have many concerns related to procedures of GST for which the Conference made an appeal to Finance Minister Arun Jaitley to begin dialogue with trade and industry on future roadmap of GST.

CAIT further demanded the Government to draw GST in such a manner which will simplify and rationalize the taxation system in the country and also get rid the trading community from multiple taxes and multiple Authorities. CAIT said that under GST about eight types of return forms need to be complied by the traders, and if such a procedure is adopted it will complicate the taxation structure and will demoralize the traders to opt for self-compliance and will certainly affect adversely the concept of widening the tax base through GST.

The CNX Nifty is currently trading at 7782.10, down by 2.55 points or 0.03% after trading in a range of 7759.20 and 7793.45. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.17%, Bharti Airtel up by 1.96%, GAIL India up by 1.87%, TCS up by 1.05% and BPCL up by 0.94%. On the flip side, ITC down by 1.45%, ICICI Bank down by 1.44%, Tata Steel down by 1.29%, Ambuja Cement down by 1.23% and Zee Entertainment down by 1.22% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 was down by 1.14%, Hang Seng down by 0.92%, Taiwan Weighted down by 1.1% and KOSPI Index was down by 0.56%. On the flip side, FTSE Bursa Malaysia KLCI was up by 0.28%, Shanghai Composite up by 0.69% and Jakarta Composite was up by 1.22%.