Markets continue to trade sluggish in early noon session

Indian equity benchmarks continued to trade sluggish in early noon session on account of sustained selling by funds and retail investors in the blue chip counters amid weak cues from the global markets, as investors remained worried ahead of the US Fed meet due to begin tomorrow and BOJ meet later during this week. Sentiment also remained down beat with Industrial output contracting 0.8% in April, the first decline in three months, on the back of sharp fall in capital goods production and manufacturing activity. Further, traders kept their eyes on Key macroeconomic data i.e. consumer price index (CPI) and inflation based on the wholesale price index (WPI) for May to be released today and tomorrow, respectively.

Fall in crude oil prices coupled with depreciating rupee against dollar, too dampened sentiments. In scrip specific development, share of Coal India was trading higher in an otherwise weak trading session after the company’s two subsidiaries -- Mahanadi Coalfields and Northern Coalfields, approved plans for share buyback. Mahanadi Coalfields (MCL) plans to buy back 4.43 lakh shares of face value Rs 1,000 each on an proportionate basis through a tender offer. The offer size represents 23.82 per cent of the paidup capital of the company. The maximum buyback size is Rs 1,028.77 crore, or up to 25 per cent of the paidup capital.

The BSE Sensex is currently trading at 26301.00, down by 334.75 points or 1.26% after trading in a range of 26287.60 and 26468.27. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.99%, while Small cap index down by 0.93%.

The top losing sectoral indices on the BSE were Realty down by 1.90%, Power down by 1.68%, Bankex down by 1.64%, Capital Goods down by 1.60% and Auto down by 1.58%, while their were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Lupin up by 0.79%, Dr. Reddys Lab up by 0.60% and Coal India up by 0.42%. On the flip side, Tata Motors down by 4.07%, ICICI Bank down by 3.30%, Tata Steel down by 3.25%, BHEL down by 3.03% and Axis Bank down by 2.73% were the top losers.

Meanwhile, state finance ministers will deliberate on the model GST law at a two-day meeting in Kolkata on June 14 and 15 and will discuss the model GST law, which will be adopted by the Centre and all states, with hope that pending GST bill will get passed in Rajya Sabha in the next Parliament session. Union Finance Minister Arun Jaitley too will participate in the Empowered Committee of State Finance Ministers and will try to iron out differences over the new regime that will include all indirect taxes and create one national market under the GST.

Once the Constitution Amendment Bill to roll out GST is passed by the Parliament, the Centre and states will have to adopt their own laws to give effect to the new indirect tax regime. The Central GST will be framed based on the model GST law. The states will draft their own State GST based on the draft model law with minor variations incorporating state-based exemptions. Besides these two laws, the Centre and states will have to approve the integrated-GST law, which will deal with inter-state movement of goods.

The government has proposed to take up the GST Constitution Amendment Bill in the Rajya Sabha in the forthcoming monsoon session of the Parliament. The Centre is planning to roll out the indirect tax from the next financial year beginning April 1, 2017.

The CNX Nifty is currently trading at 8074.95, down by 95.10 points or 1.16% after trading in a range of 8071.35 and 8111.60. There were 7 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Lupin up by 0.74%, Coal India up by 0.65%, Dr. Reddys Lab up by 0.54%, Bharti Infratel up by 0.40% and BPCL up by 0.39%. On the flip side, Tata Motors - DVR down by 4.38%, Tata Motors down by 4.00%, ICICI Bank down by 3.33%, Idea Cellular down by 3.24% and Tata Steel down by 3.17% were the top losers.

Asian markets were trading lower; Hang Seng decreased 592.71 points or 2.82% to 20,449.93, Nikkei 225 decreased 556.39 points or 3.35% to 16,044.97, Taiwan Weighted decreased 179.26 points or 2.06% to 8,536.22, Shanghai Composite decreased 43.07 points or 1.47% to 2,884.09, KOSPI Index decreased 38.57 points or 1.91% to 1,979.06, Jakarta Composite decreased 24.38 points or 0.5% to 4,823.68 and FTSE Bursa Malaysia KLCI decreased 9.3 points or 0.57% to 1,631.92.