Benchmarks continue to trade in red; IT, TECK drag

Indian equity benchmarks continued its weak trade gyrating around the lowest point of the day in the late afternoon session on account of selling in frontline blue chip counters. Concerns about the pending Fed policy meeting, which concludes Wednesday, and the UK referendum set for June 23 on Britain’s membership in the EU have raised the collective level of anxiety among investors. Increase in Wholesale price index (WPI) inflation in the month of May 2016 to 0.79 percent compared to 0.34 percent in the previous month also weighed on the sentiment. Traders were seen piling position in Realty, Consumer Durables and Power stocks while selling was witnessed in IT, TECK and Oil & Gas sector stocks. In scrip specific development, Deepak Fertilisers was trading firm after the Ministry of Chemicals and Fertilisers agreed to release about Rs 485 crore outstanding subsidy payment to the company. DLF was trading in green on reports that its rental arm has received non-binding bids estimated at between $1-1.3 billion from three big global investors for acquiring 40% stake. Balaji Telefilms was trading in green as its much-controversial film is set to release on its scheduled date. The Bombay High Court has cleared release of Balalji’s Udta Punjab with just one cut.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,100 and 26,400 levels respectively. The market breadth on BSE was positive in the ratio of 1468:958 while 144 scrips remained unchanged.

The BSE Sensex is currently trading at 26312.26, down by 84.51 points or 0.32% after trading in a range of 26291.68 and 26485.45. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.09%, while Small cap index up by 0.42%.

The gaining sectoral indices on the BSE were Realty up by 0.91%, Consumer Durables up by 0.36%, Power up by 0.17%, PSU up by 0.11% and Bankex up by 0.08%, while IT down by 0.80%, TECK down by 0.73%, Oil & Gas down by 0.67%, Auto down by 0.20% and Capital Goods down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 2.99%, Cipla up by 2.36%, SBI up by 1.71%, GAIL India up by 0.73% and BHEL up by 0.71%.

On the flip side, Hindustan Unilever down by 1.36%, Bajaj Auto down by 1.28%, HDFC down by 1.21%, Asian Paints down by 1.16% and Hero MotoCorp down by 1.13% were the top losers.

Meanwhile, targeting April 2017 for the rollout of Goods and Services Tax with the support from smaller regional parties, Minister of State for Finance Jayant Sinha has said that “If we can pass it in the monsoon session of Parliament beginning next month, then we can implement it from April 1, 2017.”

Jayant Sinha further said that, after Parliament approves the constitutional amendment to allow GST, it needs to be ratified by more than half of states then after the Constitution Amendment Bill is passed in Parliament, there are three more legislations Central GST, State GST, and Integrated GST which are required to be passed.

GST was earlier planned to be introduced from April 1 this year, converting 29 states into a single market through the new indirect tax regime, but the deadline was missed as the Bill to roll it out remains delayed in the opposition-dominated Rajya Sabha. With the Monsoon Session of Parliament likely to get underway next month it remains the last chance for the government to pass the Goods and Services Tax Bill by its planned date of April 1, 2017.The government is betting on support from smaller regional parties to pass the national sales tax legislation in the Parliament session from next month, and expects approval for supporting laws by year-end.

In a related development, Finance Minister Arun Jaitley is going to participate in the meeting of Empowered Committee of State Finance Ministers, which will deliberate on the model GST law at the two-day meeting in Kolkata and also try to iron out differences over the new regime that will include all indirect taxes and create one national market under the GST.

The CNX Nifty is currently trading at 8082.35, down by 28.25 points or 0.35% after trading in a range of 8077.25 and 8134.95. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 3.26%, Cipla up by 2.49%, SBI up by 1.96%, Bank of Baroda up by 1.16% and Eicher Motors up by 0.60%.

On the flip side, Zee Entertainment down by 2.10%, Ultratech Cement down by 1.86%, BPCL down by 1.85%, Hindustan Unilever down by 1.57% and Asian Paints down by 1.30% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 160.18 points or 1% to 15,859.00, Hang Seng decreased 125.46 points or 0.61% to 20,387.53, Jakarta Composite decreased 11.26 points or 0.23% to 4,795.97, KOSPI Index decreased 7.03 points or 0.36% to 1,972.03 and FTSE Bursa Malaysia KLCI decreased 3.26 points or 0.2% to 1,626.51.

On the other hand, Shanghai Composite increased 9.12 points or 0.32% to 2,842.19 and Taiwan Weighted increased 39.9 points or 0.47% to 8,576.12.

The European markets were trading in red; UK’s FTSE 100 decreased 61.85 points or 1.02% to 5,983.12, Germany’s DAX decreased 119.38 points or 1.24% to 9,538.06 and France’s CAC decreased 57.54 points or 1.36% to 4,169.48.