Feeble global cues drag benchmarks lower in early deals

Pressurized by feeble global cues, Indian equity benchmarks have made a weak start and are trading lower in early deals on Friday. Traders remained on sidelines ahead of the Index of industrial production data for the month of July to be released after the market hours. Industrial output growth halved to 2.1 per cent in June, as compared to 4.2 per cent in June 2015. Traders also shrugged off President Pranab Mukherjee’s statement where he gave his assent to the landmark Goods and Services Tax (GST) Bill. Now the Centre will have to pass the Central GST and Integrated GST Bills, while the states will need to approve their respective GST legislations. The government targets to implement the GST system from 1 April, 2017.

On the global front, Asian counters were trading mostly in red at this point of time, as investors weighed prospects for further monetary easing in Europe and Japan. Comments from ECB chief Mario Draghi diminishing the prospect of an increase in asset purchases weighed on shares.

Back home, selling in auto counter too dampened sentiments despite, the sales of passenger vehicles including cars, increasing 16.7% in August from the year-ago period and the Society of Indian Automobile Manufacturers (Siam) has revised its growth projections in the range of 11-13% in FY2017, as against an earlier forecast of 6-8%. In scrip specific developments, YES Bank on Thursday has deferred its $1 billion equity raising plan because of “misinterpretation of guidelines” amid sharp drop in its stock price. Shares of YES Bank are down almost 4%. SAIL declines over 5% after reporting a net let loss of Rs 535.52 crore for the quarter as compared to a net loss of Rs 248.18 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 28900.65, down by 144.63 points or 0.50% after trading in a range of 28893.71 and 29062.90. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index down by 0.14%, while Small cap was index up by 0.09%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.66%, Healthcare up by 0.59%, Energy up by 0.56%, Utilities up by 0.51% and Telecom up by 0.31%, while FMCG down by 0.89%, Bankex down by 0.87%, Finance down by 0.76%, Auto down by 0.67% and Consumer Durables down by 0.48% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.42%, TCS up by 1.09%, Sun Pharma up by 0.90%, Wipro up by 0.80% and GAIL India up by 0.80%. On the flip side, ITC down by 1.62%, Tata Motors down by 1.59%, HDFC down by 1.52%, Axis Bank down by 1.34% and ICICI Bank down by 0.98% were the top losers.

Meanwhile, to tackle the issue of inordinate delay in closing down sick or loss making central public sector enterprises (CPSEs), the government has come out with timelines for disposal of movable assets, sale of land and retrenchment of employees not opting for voluntary retirement scheme (VRS). The decision for closure of such CPSEs was taken a long time back. 

Issuing the guidelines, the Department of Public Enterprises (DPE) said that the government would now like to ensure the decisions taken by the competent authority are implemented by ensuring payment of financial compensation, discharging of liabilities, legal responsibilities, disposal of land and movable assets in a time-bound manner. It said that land management and auctioning agencies will be entrusted with the job to dispose of movable and immovable assets.

As per the timelines laid down by DPE, the retrenchment of employees of such CPSEs who have not opted for VRS has to be completed within four months from the 'Zero Date', the date of issue of minutes of approval for closure of sick or loss-making CPSEs by the Cabinet or Cabinet Committee of Economic Affairs. The VRS package will be as per the 2007 notional pay scale. Further, settlement of statutory dues and liabilities towards revenue and tax department has to be completed within three months, while payment to secured creditors has to be done in two months. The sale of leasehold or freehold land needs to be complete within six months. Government's premier think-tank Niti Aayog has identified 74 loss-making public sector undertakings, of these 26 have been recommended for closure.

The CNX Nifty is currently trading at 8904.55, down by 47.95 points or 0.54% after trading in a range of 8899.65 and 8939.15. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 1.43%, ONGC up by 1.36%, TCS up by 1.06%, Aurobindo Pharma up by 1.04% and Sun Pharma up by 0.97%. On the flip side, Yes Bank down by 3.41%, Ultratech Cement down by 1.69%, HDFC down by 1.62%, Tata Motors down by 1.55% and ITC down by 1.47% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted declined 96.89 points or 1.05% to 9,166.00, Jakarta Composite decreased 52.32 points or 0.97% to 5,318.76, KOSPI Index fell 33.93 points or 1.64% to 2,029.80 and FTSE Bursa Malaysia KLCI was down by 5.2 points or 0.31% to 1,686.18.  On the flip side, Shanghai Composite rose 0.62 points or 0.02% to 3,096.57, Nikkei 225 increased 31.49 points or 0.19% to 16,990.26 and Hang Seng was up by 228.45 points or 0.96% to 24,147.79.