Markets trade lower before RBI's policy decision

Indian equity markets made a gap-down opening  and are now trading with cut of around half a percent in early day, tracking losses from other Asia markets after oil prices fell more than two percent on Monday. Investors remained on the sidelines and refrained from any buying activity ahead of the first bi-monthly policy review meeting of the Reserve Bank of India (RBI) for financial year 2017. However, down side remained capped with Arvind Panagariya stating that India is close to 8% GDP growth on the back of satisfactory infrastructure development. Meanwhile, foreign institutional investors continued to remain buyers with net equity purchases of Rs 237 crore on Monday, as per provisional stock exchange data. Besides, oil marketing companies such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation were trading higher on BSE after hike in petrol and diesel prices. Petrol price was hiked by Rs 2.19 a litre and diesel prices was increased by 98 paise per litre.

In the scrip specific development, Kiri Industries rallied 11 per cent on the BSE, after the company executed agreements to settle all of its debt.

On the global front, US markets ended lower on Monday after fresh orders for US factory goods in February declined, while capital goods expenditure was lower than expected. Asian markets were mostly trading in red amid increased risk aversion, following the slump in crude oil prices and on renewed concerns over the outlook for US interest rates.

Back home, traders were seen piling up position in Oil & Gas, Consumer Durables and PSU, while selling was witnessed in Auto, TECK, Metal and IT. The market breadth on BSE was negative in the ratio of 621: 834 while 65 scrips remained unchanged.

The BSE Sensex is currently trading at 25297.87, down by 101.78 points or 0.40% after trading in a range of 25245.46 and 25372.44. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.16%, while Small cap index was lower by 0.23%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.70%, Consumer Durables up by 0.10% and PSU up by 0.05%, while Realty down by 0.67%, Auto down by 0.61%, TECK down by 0.59%, Metal down by 0.57% and IT down by 0.44% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 0.73%, Hindustan Unilever up by 0.46%, Dr. Reddys Lab up by 0.43%, Reliance Industries up by 0.37% and Axis Bank up by 0.35%. On the flip side, Adani Ports &Special down by 1.84%, Bharti Airtel down by 1.49%, Tata Motors down by 1.49%, ICICI Bank down by 0.92% and Mahindra & Mahindra down by 0.78% were the top losers.

Meanwhile, after Finance Minister Arun Jaitley recently said he will reach out to the Congress again to persuade it to support the indirect tax legislation, Economic Affair Secretary Shaktikanta Das, expecting an early passage of Goods and Services Tax (GST) bill by Parliament has said that implementation of the GST can be the biggest contributor to improving the ease of doing business in India and the administrative machinery is ready to implement the new indirect tax regime, which will be a key component in improving ease of doing business.

The government is keen on getting the much delayed GST bill approved by Parliament in second half of the Budget Session beginning next month. Das in his statement said that “I think the biggest contribution to ease of doing business in our country will be made if GST is implemented in time. We are quite hopeful and optimistic that Parliament will definitely very soon appreciate the urgency of GST and have the Constitution Amendment Bill passed”. Though, he pointed that government is ready with all the backup to roll out the new tax regime but it could be done not only after its passage by Parliament but also its ratification by at least half the number of the State Assemblies.

Economic Affair Secretary who was addressing industry leaders at a CII event said that India’s rank in World Bank Doing Business Report 2016 has improved to 130 from 142. He said improving ease of doing business is critical to improve India’s Gross Domestic Product growth rate. Our target is to achieve 8 per cent and cross 8 per cent growth in the near future. Slowly we plan to reach 8.5 per cent and 9 per cent.

The GST Bill, India's biggest indirect tax reform since independence, seeking to replace a slew of central and state levies, was passed by the Lok Sabha in May last year and is pending ratification by the Rajya Sabha, where the ruling government does not have a majority.

The CNX Nifty is currently trading at 7722.80, down by 36.00 points or 0.46% after trading in a range of 7715.35 and 7736.30. There were 8 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.41%, Lupin up by 0.71%, Dr. Reddys Lab up by 0.46%, Hindustan Unilever up by 0.45% and Power Grid Corpn. up by 0.43%. On the flip side, Adani Ports &Special down by 1.88%, Tata Motors - DVR down by 1.75%, Tata Motors down by 1.62%, Bharti Airtel down by 1.62% and Zee Entertainment down by 1.47% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 353.46 points or 2.19% to 15,769.81, Hang Seng decreased 272.76 points or 1.33% to 20,226.16, KOSPI Index decreased 15.28 points or 0.77% to 1,963.69 and FTSE Bursa Malaysia KLCI decreased 5.55 points or 0.32% to 1,719.69.

On the flip side, Jakarta Composite increased 15.22 points or 0.31% to 4,865.40 and Shanghai Composite increased 25.78 points or 0.86% to 3,035.31.