Markets continue to trade lower in noon deals

Indian equity benchmarks are trading lower in noon deals as traders opted to book profits after markets witnessed sharp up-move in last five trading session. Market participants also remained cautious ahead of the GDP data for the March quarter and fiscal deficit data for the month of March slated to be announced later today. India’s GDP growth for the fourth quarter of 2015-16 is likely to be around 7.1 per cent, but slow private sector capital expenditure (capex) spending and stressed banking sector will weigh on the economy's growth potential this year. However, losses remained capped as some support came with the former Singapore Prime Minister Goh Chok Tong’s statement that India is a beacon of hope and has the potential to drive the world economy for the next 10 years, amid concerns of slowing global growth.

Asian markets too were trading mostly in green at this point of time amid optimism the global economy is strong enough to withstand a potentially imminent boost to US borrowing costs. Closer home, on the sectoral front, auto sector stocks remained on buyers’ radar ahead of the announcement of the monthly sales data for the month of May. On the flip side, aviation stocks were reeling under pressure despite report of global airlines’ association that India’s domestic passenger traffic grew by 21.8% in April.

The BSE Sensex is currently trading at 26664.95, down by 60.65 points or 0.23% after trading in a range of 26608.52 and 26837.20. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.19%, while Small cap index declined by 0.28%.

The top gaining sectoral indices on the BSE were Auto up by 1.95%, Realty up by 1.09%, Metal up by 0.87%, Bankex up by 0.15%, while IT down by 1.31%, TECK down by 1.21%, Consumer Durables down by 1.17%, Capital Goods down by 0.42%, Power down by 0.29% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 8.03%, Tata Steel up by 1.52%, Maruti Suzuki up by 1.44%, NTPC up by 1.19% and BHEL up by 0.95%. On the flip side, Sun Pharma Inds. down by 5.72%, GAIL India down by 2.41%, Infosys down by 1.68%, TCS down by 1.56% and Bharti Airtel down by 1.28% were the top losers.

Meanwhile, giving a big relief to the jewellers and customers, the government has rolled back its budget decision to apply 1 percent tax on cash purchase of gold jewellery of Rs 2 lakh and above and raised the threshold to the earlier Rs 5 lakh, the revised rules will come to effect from June 1. India is the world's largest gold jewellery consumer and the Rs 5 lakh relief is expected to create some demand in the thin wedding season.

The jewellers had earlier been on a 45-day strike after Finance Minister Arun Jaitley in his Budget speech in February proposed 1 percent excise tax on non-silver jewellery. The decision has come at a right time when the jewellers are finding it difficult to offload their inventory that piled up following the strike. Gold demand in the country hit a seven-year low in the first quarter of 2016 when sales declined 41% year on year at 88.4 tonnes.

TCS, introduced as a measure to curb tax evasion and check black money transactions is collected by the seller from the buyer at the time of sale and is deposited with the government. The person from whom the TCS is collected gets credit for the same amount in his income tax return. TCS of 1% was imposed on cash purchase of jewellery worth Rs 5 lakh or more and of bullion worth Rs 2 lakh or more in 2012. However, in this year’s budget the government had reduced the TCS threshold on jewellery to Rs 2 lakh.

The CNX Nifty is currently trading at 8166.45, down by 12.05 points or 0.15% after trading in a range of 8144.90 and 8213.60. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 9.43%, Tata Motors up by 7.89%, Hindalco up by 3.74%, Aurobindo Pharma up by 3.67% and Tata Steel up by 1.81%. On the flip side, Sun Pharma down by 5.74%, GAIL India down by 2.45%, Infosys down by 2.05%, TCS down by 1.66% and Power Grid down by 1.12% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 16.27 points or 0.83% to 1,983.40, Shanghai Composite soared 90.14 points or 3.19% to 2,912.59, Nikkei 225 gained 166.96 points or 0.98% to 17,234.98 and Hang Seng was up by 320.86 points or 1.56% to 20,950.25.

On the flip side, Jakarta Composite decreased 19.95 points or 0.41% to 4,816.08, FTSE Bursa Malaysia KLCI slipped 4.57 points or 0.28% to 1,625.30 and Taiwan Weighted was down by 0.28 points to 8,535.59.