Markets continue to trade in red in early noon session

Indian equity benchmarks continued to trade in red 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. Investors turned cautious ahead of the expiry of derivatives contract on July 28, 2016. Sentiments remained down-beat with the report stating that structural issues in the inflation dynamics continue to prevail as rural CPI inflation on an average remains above the urban CPI inflation. However, investors got some comfort with the minister of State for Finance Arjun Ram Meghwal’s statement that Government is working overtime to build a consensus on the long-pending Goods and Services Tax bill with the hope of getting it passed during the ongoing Parliament session.

On the global front, Asian markets were trading mixed, following the overnight losses on Wall Street and the slide in crude oil prices to its lowest in almost three months. Investors also turned cautious ahead of central bank meetings in the US and Japan this week.

The BSE Sensex is currently trading at 28120.35, up by 25.01 points or 0.09% after trading in a range of 28058.31 and 28141.49. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.74%, Metal up by 0.50%, Oil & Gas up by 0.39%, Power up by 0.26% and PSU up by 0.24%, while Auto down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.02%, Axis Bank up by 1.76%, Wipro up by 1.04%, Reliance Industries up by 0.97% and Cipla up by 0.92%. On the flip side, Lupin down by 1.00%, ICICI Bank down by 0.97%, Maruti Suzuki down by 0.89%, Hero MotoCorp down by 0.80% and Asian Paints down by 0.72% were the top losers.

Meanwhile, the Union and state finance ministers would discuss scrapping the proposed one per cent tax on inter-state movement of goods proposed in the Constitution amendment Bill on goods and service tax regime. The removal of the 1% additional tax on inter-state trading is likely to come up for discussion at the empowered committee meeting chaired by Finance minister Arun Jaitley with the state finance ministers, apart from various vexed issues over distribution of adjudicating powers between the Centre and state indirect tax departments. After which the Constitutional amendment Bill on GST may come up for a discussion in the Rajya Sabha. With that the GST structure will improve considerably, although it is there only for two years, there will be some amount of cascading effect. 

A committee had suggested that limiting the one per cent tax over GST to only those inter-state exchanges of goods for which there was a monetary consideration. This means that only inter-state trading of goods would draw this tax and not company-to-company transfer. States charge central sales tax on sales made outside their territory, which will not be available under the GST regime.

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 markets that is one-sixth of world population.

The CNX Nifty is currently trading at 8634.60, down by 1.05 points or 0.01% after trading in a range of 8620.45 and 8643.95. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.08%, Axis Bank up by 2.01%, ACC up by 1.38%, Yes Bank up by 1.30% and Ambuja Cement up by 1.23%. On the flip side, Lupin down by 1.34%, Maruti Suzuki down by 0.98%, ICICI Bank down by 0.89%, Asian Paints down by 0.84% and Dr. Reddys Lab down by 0.84% were the top losers.

Asian markets were trading mixed, KOSPI Index increased 14.59 points or 0.73% to 2,026.91, Shanghai Composite increased 17.4 points or 0.58% to 3,033.23, Taiwan Weighted increased 33.12 points or 0.37% to 9,024.79 and Hang Seng increased 249.42 points or 1.13% to 22,242.86. On the flip side, Nikkei 225 decreased 191.42 points or 1.15% to 16,428.87, Jakarta Composite decreased 5.81 points or 0.11% to 5,214.99 and FTSE Bursa Malaysia KLCI decreased 4.22 points or 0.25% to 1,664.04.