Benchmarks make cautious start on sluggish global cues

Extending their consolidation mood, Indian equity benchmarks have made a cautious start and are trading slightly in red in early deals on sluggish global cues. Depreciation in Indian rupee too dampened sentiments. The currency has opened at 66.47 a dollar, down 11 paise compared with 66.36 per dollar on Wednesday. However, losses remained capped as traders took some encouragement with Finance Minister Arun Jaitley’s statement that the government is 'running against time' for the implementation of GST, but added that he would certainly like to give it a try. He said the new GST, once implemented, would have a transformational impact by creating a common market in the country, while also acting as a transfer mechanism that would aid poorer states.

On the global front, most of the Asian counters were trading in red at this point of time led by Japanese Nikkei which fell around half a percent, as investors assessed the chances of government stimulus after revised data showed the economy grew more than estimated. The US markets after a lackluster trade ended almost flat in last session, though the tech-heavy Nasdaq reached another new record closing high.

Back home, stocks related to aviation sector flying higher as the domestic air travel surged with 26.2 per cent traffic growth in July, while globally domestic travel demand climbed 3.8 per cent in July, compared to the same month last year. Services oriented stocks too remained on buyers’ radar, as Commerce Minister Nirmala Sitharaman has said that India will present proposals to the World Trade Organization on ways to ease trade in services.

The BSE Sensex is currently trading at 28916.05, down by 10.31 points or 0.04% after trading in a range of 28854.56 and 28953.63. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index up by 0.01%, while Small cap index was down by 0.53%.

The top gaining sectoral indices on the BSE were Metal up by 1.33%, Realty up by 1.28%, Basic Materials up by 1.01%, PSU up by 0.84% and Telecom up by 0.79%, while IT down by 3.03%, TECK down by 2.33% and Consumer Durables down by 0.31% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.01%, Bajaj Auto up by 2.52%, ONGC up by 2.33%, SBI up by 1.63% and Power Grid Corpn. up by 1.41%. On the flip side, TCS down by 5.13%, Infosys down by 2.63%, Wipro down by 1.96%, Axis Bank down by 0.68% and Tata Motors down by 0.56% were the top losers.

Meanwhile, terming the implementation of Goods and Services Tax (GST) a top priority, Finance Minister Arun Jaitley has expressed his confidence that the tax rates will probably stabilize once the indirect taxation regime is put in place. He further said that implementation of GST from 1st April next year is very stiff target and they are running against time but they want to give a try. He added that the challenges for the government are to put public sector bank on track and continue to operationalise stalled infrastructure projects to further boost economic activity.

Finance Minister said that “We have kept a very stiff target and the reason is that there is a great national aspiration in support of a reform that GST is, and state after state within a period of 20-25 days have kept on ratifying it because they stand to benefit the most.'

Jaitley said the procedural formalities of collecting proceedings of all the states and sending it to the President for ratification is on. Once the assent is granted by President Pranab Mukherjee, the constitution amendment bill will have to be notified. Further he said that after notification and constitution of the GST Council there are obviously some pending issues, which the council will have to resolve. The constitution amendment bill for GST has received Parliament’s nod last month and has been ratified by more than 50% of the states.

The CNX Nifty is currently trading at 8909.95, down by 8.00 points or 0.09% after trading in a range of 8896.00 and 8916.10. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.00%, ONGC up by 2.47%, Bajaj Auto up by 1.98%, Bharti Infratel up by 1.90% and Hindalco up by 1.72%. On the flip side, TCS down by 4.73%, HCL Tech. down by 2.71%, Yes Bank down by 2.66%, Infosys down by 2.59% and Tech Mahindra down by 2.56% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 80.75 points or 0.47% to 16,931.69, Jakarta Composite slipped 4.66 points or 0.09% to 5,376.69, KOSPI Index shed 4.28 points or 0.21% to 2,057.60, Taiwan Weighted dipped 1.88 points or 0.02% to 9,257.19, Shanghai Composite fell 0.84 points or 0.03% to 3,091.08 and FTSE Bursa Malaysia KLCI was down by 0.79 points or 0.05% to 1,688.78. On the flip side, Hang Seng was up by 93.13 points or 0.39% to 23,834.94.