Markets continue to trade in negative territory in afternoon session

Indian equity benchmarks continued to trade in negative territory in afternoon session after the Reserve Bank of India at its policy review kept key policy rates unchanged. However, losses remained capped with the GST Bill amendments adopted by the Rajya Sabha last week getting unanimously passed by the Lok Sabha on Monday. Prime Minister Narendra Modi has said that the passage of the enabling legislation for GST has marked a major step towards 'freeing India from tax terrorism' and in helping curb black money and corruption and in making 'the consumer, the king.' Further, rupee depreciated 13 paise to 66.97 against the US dollar in early trade due to increased demand for the American currency from importers amid foreign fund outflows.

On the global front, Asian market were trading mixed after Wall Street pulling back from a record high and with oil prices unable to consolidate their overnight gains, as markets speculated about possible production cuts. Back home, all the sectoral indices were trading in red with FMCG as the top losing index down by around 1.24%. In scrip specific development, HDFC slid about a percent after its board approved the merger of Max Life and Max Financial Services with its insurance arm HDFC Standard Life Insurance Company.

The BSE Sensex is currently trading at 28019.58, down by 162.99 points or 0.58% after trading in a range of 28003.48 and 28289.96. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.82%, while Small cap index was down by 0.57%.

The top losing sectoral indices on the BSE were FMCG down by 1.24%, Oil & Gas down by 0.92%, Metal down by 0.91%, Realty down by 0.81% and Auto down by 0.78%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were Coal India up by 0.74%, ONGC up by 0.71%, NTPC up by 0.56%, SBI up by 0.32% and Axis Bank up by 0.09%. On the flip side, HDFC down by 1.97%, Adani Ports &Special down by 1.48%, Mahindra & Mahindra down by 1.46%, ITC down by 1.22% and Hero MotoCorp down by 1.09% were the top losers.

Meanwhile, amid the fears that Goods and Services Tax (GST) will increase inflation, Prime Minister Narendra Modi has said that the Reserve Bank of India (RBI) and government has agreed to maintain an inflation target of 4%. He added that as the target has been set by legislation it would be incumbent on the RBI as well as the officials to see that inflation remains at 4% with a margin of plus or minus 2%.

Interceding in debate on Constitution (122nd Amendment) Bill in Lok Sabha, Modi said there has been continuous discussions over growth and inflation and there is also a perception that the government and RBI have differences over the issue of inflation and growth, adding the government by law has fixed an inflation target.

Prime Minister further said Consumer Price Index-based retail inflation rose 5.77% in June, the fastest pace in 22 months and it is expected that the implementation of the new GST my push it further. While there have been concerns about revenue and fiscal deficit, the Fiscal Responsibility and Budget Management (FRBM) Act enables financial discipline and ensure a ‘balanced approach’ in ensuring positive change in the economy of states. He added that it has also helped in improving the financial health of the states.

The CNX Nifty is currently trading at 8652.90, down by 58.45 points or 0.67% after trading in a range of 8651.75 and 8728.35. There were 9 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 3.09%, Coal India up by 0.83%, ONGC up by 0.69% , Bharti Infratel up by 0.67% and NTPC up by 0.63%. On the flip side, Idea Cellular down by 5.29%, Ambuja Cement down by 2.98%, Hindalco down by 2.18%, Grasim Industries down by 2.09% and ACC down by 1.99% were the top losers.

Asian market were trading mixed, Taiwan Weighted increased 4.82 points or 0.05% to 9,155.08, KOSPI Index increased 12.66 points or 0.62% to 2,043.78, Shanghai Composite increased 15.4 points or 0.51% to 3,019.67 and Nikkei 225 increased 114.4 points or 0.69% to 16,764.97. On the flip side, Hang Seng decreased 49.86 points or 0.22% to 22,444.90, Jakarta Composite decreased 19.02 points or 0.35% to 5,439.96 and FTSE Bursa Malaysia KLCI decreased 3.19 points or 0.19% to 1,669.49.