Benchmarks turn red in early deals; Nifty hold crucial 8,900 mark

Indian equity benchmarks have pared initial gains and entered into red terrain in morning deals, as traders opted to book profit after a tremendous rally in previous session. However losses remained capped as traders took some encouragement with Prime Minister Narendra Modi’s statement that the country’s priority will be to work towards trade facilitation agreement (TFA) for services, a move that will help in movement of professionals. Some support also came with report that foreign institutional investors were net buyers in Indian equities worth Rs 1,439 crore on Tuesday, as per provisional stock exchange data.

Global cues too remained supportive with most of the Asian counters mostly trading in green at this point of time after a weak US August services sector data would compel the US Federal Reserve not to ease interest rates soon.

Back home, public sector oil marketing companies i.e. Indian Oil Corporation and Hindustan Petroleum Corporation were trading higher as global oil prices inched lower with market participants remaining skeptical that producers will reach an agreement to freeze output. Stocks related to agriculture and irrigation remained on buyers’ radar on report that India’s apex rural-development bank National Bank for Agriculture and Rural Development (NABARD) will manage a Rs. 77,000 crore corpus as part of a Central government push to complete 99 unfinished irrigation projects across the country by 2019 and bring water to 76.03 lakh hectares.

The BSE Sensex is currently trading at 28950.49, down by 27.53 points or 0.10% after trading in a range of 28928.10 and 29067.84. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.05%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Metal up by 0.75%, Basic Materials up by 0.56%, IT up by 0.40%, FMCG up by 0.28% and Auto up by 0.24%, while Power down by 0.49%, Capital Goods down by 0.24%, Finance down by 0.17, Consumer Durables down by 0.15% and Energy down by 0.09 were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.48%, Tata Motors up by 0.77%, ONGC up by 0.75%, Wipro up by 0.71% and SBI up by 0.69%. On the flip side, Asian Paints down by 1.44%, Adani Ports &Special down by 1.33%, HDFC down by 1.32%, NTPC down by 1.25% and Bharti Airtel down by 1.13% were the top losers.

Meanwhile, a Parliamentary Panel headed by TMC MP and former Railway Minister Dinesh Trivedi, has suggested sharing with Railways the service tax paid on passenger fares on specified classes and freight which is collected by Finance Ministry and pursuing the matter vigorously with the authorities concerned.

The panel in its report said that though several requests have been made to the Finance Ministry for exemption from payment of service tax on freight and fare, these were not agreed by the Ministry. It noted that service tax on specified classes of passenger and freight was to the tune of Rs 1478.10 crore and Rs 3449.34 crore during the financial years (FY) 2012-13 and 2013-14, respectively.

The committee’s report submitted to the Lok Sabha Speaker noted that the concessions given by the Railways on various categories should also be taken up with the ministries concerned and strongly favoured that the concessions given by the public transporter should be reimbursed to the Railways.

The panel has asked the railways to focus on completion of long-pending works to fulfill the objective of providing rail service to various parts of the country, noting that as on April 2016, the railways has 495 ongoing/pending projects involving new lines, gauge conversion, doubling and electrification worth Rs 3,61,772 crore. The report underscored the fact that these projects are important to meet the major challenges being faced by the railways relating to lack of capacity as it results in increasing load on railway infrastructure, compromising safety and lowering speed. Further, on the proposed joint venture with state governments, the committee has urged the railways to have a relook at the share of funds to be contributed by the backward, underdeveloped, hilly and far-flung states expeditiously.

The CNX Nifty is currently trading at 8926.25, down by 16.75 points or 0.19% after trading in a range of 8919.60 and 8968.70. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 1.61%, Bank of Baroda up by 1.36%, Indusind Bank up by 1.33%, Hindalco up by 1.17% and ONGC up by 0.94%. On the flip side, BHEL down by 1.99%, Asian Paints down by 1.90%, HDFC down by 1.63%, Yes Bank down by 1.47% and Tata Power down by 1.46% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.82 points or 0.05% to 1,690.74, KOSPI Index increased 4.75 points or 0.23% to 2,071.28, Jakarta Composite gained 7.53 points or 0.14% to 5,379.63, Shanghai Composite jumped 11.02 points or 0.36% to 3,101.74 and Taiwan Weighted was up by 88.49 points or 0.96% to 9,270.34. On the flip side, Nikkei 225 decreased 117.55 points or 0.69% to 16,964.43 and Hang Seng was down by 64.74 points or 0.27% to 23,722.94.