Benchmarks continue to trade in red in late morning session

Indian equity benchmarks continued to trade in red in late morning session as funds and retail investors indulged in booking profits at prevailing levels. Besides, a sluggish global economy, with manufacturing activity across Asia, Europe and the Americas barely improving as producers struggled to bring in new orders, also weighed on sentiments.  However, investors got some confidence with Organization for Economic Cooperation and Development (OECD) in its Global Economic Outlook stating that India's growth rate is expected to hover near 7.5% this year as well as next even as many emerging market economies continue to lose momentum.  Appreciation in the rupee against dollar too supported sentiments. Reversing its three-day downward trend, Indian rupee recovered by 9 paise to 67.36 against the US dollar in early trade on Thursday on fresh selling of the American currency by exporters. Meanwhile, some market participants remained on the sidelines and refrained from any buying activity ahead of the European Central Bank (ECB) and Organization of the Petroleum Exporting Countries (OPEC) meet scheduled today.

On the global front, Asian markets were trading mostly in green on Thursday as Wall Street eked out modest gains after the latest batch of US data provided few clues on when the Federal Reserve might raise rates, while a resurgent yen pressured equity markets in Japan. However, Nikkei skidded around two percent, after the dollar sunk to a two-week low against the yen overnight following Japanese Prime Minister Shinzo Abe's official announcement late on Wednesday of his widely expected decision to delay a sales tax increase. Among the other Asian markets, Hong Kong, South Korea, Singapore, Indonesia and Malaysia are up with modest gains, while Shanghai, and Taiwan are in negative territory.

Back home, stocks from FMCG, Realty and Capital Goods counters were among the worst performers, while Metal, PSU and Auto counters battled out against all odds. In scrip specific development, shares of TVS Motor Company have surged after the company reported 11% year on year increase in total sales at 243,783 units in May 2016 against sale of 220,079 units in May 2015. Moreover, Ashok Leyland gained after the company reported an increase of 6% in May 2016 sales to 9875 units, as against 9290 units sold in the same period of last year.

The market breadth on BSE was negative, out of 2145 stocks traded, 943 stocks advanced, while 1085 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26677.45, down by 36.48 points or 0.14% after trading in a range of 26645.95 and 26745.20. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in mix; the BSE Mid cap index was up by 0.27%, while Small cap index down by 0.01%.

The top gaining sectoral indices on the BSE were Metal up by 0.98%, PSU up by 0.42%, Auto up by 0.34%, IT up by 0.31% and TECK up by 0.31%, while FMCG down by 0.79%, Realty down by 0.41%, Capital Goods down by 0.29%, Power down by 0.04% and Consumer Durables down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.53%, Tata Motors up by 1.18%, Hero MotoCorp up by 1.13%, Infosys up by 0.92% and Bharti Airtel up by 0.66%. On the flip side, ITC down by 1.80%, Hindustan Unilever down by 1.68%, Sun Pharma down by 0.98%, Lupin down by 0.93% and Asian Paints down by 0.93% were the top losers.

Meanwhile, Finance Minister Arun Jaitley, once again making a case for early implementation of the much awaited Goods and Services Tax (GST) has said that the roll-out of GST will convert India into one common market, prevent tax-on-tax and make goods and services cheaper. Jaitley also hoped the main opposition Congress will come on board to help in the passage of the India's biggest indirect tax reform bill since independence in the ensuing monsoon session of Parliament and said failing which the government will have no option but to seek for a Parliamentary vote.

Jaitley, who is on a six-day tour to Japan, said that GST will reduce the level of taxation because there will be no tax-on-tax. It will bring prices down; it will enable businesses far more. He added that the idea behind the GST is to make India into a one common market to have a seamless transfer of goods and services, to prevent tax-on-tax, make goods and services cheaper and therefore provide to any person a very large market that is one-sixth of world population.

Jaitley said he was “quite confident” that GST had support of two-third members of the Rajya Sabha “because almost every regional party supports it because regional parties also come from areas which are consuming states and all consuming states benefit from the GST.” He further said that going forward, “reform process is going to continue. Hopefully, Goods and Services Tax (GST) bill is passed (in ensuing monsoon session of Parliament), which has the potential to add to GDP growth. The bill which will be replacing several state and central levies -- has already been approved by the Lok Sabha or Lower House of Parliament and is pending in the Upper House.

The CNX Nifty is currently trading at 8173.95, down by 6.00 points or 0.07% after trading in a range of 8154.75 and 8185.85. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.49%, Idea Cellular up by 1.61%, Tata Motors up by 1.50%, Tech Mahindra up by 1.46% and BPCL up by 1.36%. On the flip side, ITC down by 1.99%, Hindustan Unilever down by 1.58%, Asian Paints down by 1.19%, Lupin down by 1.18% and HCL Tech down by 1.16% were the top losers.

Asian markets were trading mostly in green, KOSPI Index was up by 0.22%, FTSE Bursa Malaysia KLCI up by 0.31%, Jakarta Composite up by 0.12% and Hang Seng up by 0.2%. On the flip side, Nikkei 225 was down by 1.89%, Taiwan Weighted down by 0.19% and Shanghai Composite was down by 0.17%.