Benchmarks continue weak trade; Realty, Banking drag

Indian equity benchmarks continued their weak trade in the late morning session on account of selling in frontline blue chip counters. The sentiments were under pressure amid the .global turmoil after a prominent US policy maker hinted at a rate hike by the US Fed in the near future. Boston Fed President Eric Rosengren, known to be a dovish policymaker, stated that the US central bank faced increasing risk if it waited too long to raise interest rates. The North Korean nuke tests and fears that UN sanctions may fail to restrict the country from any further tests had already dampened sentiments in Asia. Some selling crept in the domestic market after Indian rupee continued its losing streak and was trading down against US dollar on increased demand of the American currency among importers and bankers. Investors will be eyeing domestic factory output data for July scheduled for release later in the day, which is expected to raise bit of concern since there has been no material improvement in economic activity. Traders were seen piling up positions in IT and TECK stocks, while selling was witnessed in Realty, Banking and Auto sector stocks. In scrip specific development, Suprajit Engineering was trading in green as the company has completed the acquisition of Wescon Controls, Wichita, USA, through its wholly owned subsidiary Suprajit USA Inc.

On the global front, Asian shares traded in red, as investors shrugged off solid manufacturing orders in Japan and focused on chances that the Fed may raise rates this month. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,750 and 28,400 levels respectively. The market breadth on BSE was negative in the ratio of 502:1670, while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 28363.56, down by 433.69 points or 1.51% after trading in a range of 28251.31 and 28481.11. There was just 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.25%, while Small cap index was down by 1.59%.

The gaining sectoral indices on the BSE were IT up by 0.76% and TECK up by 0.24%, while Realty down by 2.96%, Bankex down by 2.44%, Auto down by 2.38%, Capital Goods down by 2.32% and Metal down by 2.17% were the losing indices on BSE.

The lone gainer on the Sensex was Infosys up by 1.64%.

On the flip side, Adani Ports & Special Economic Zone down by 3.74%, Axis Bank down by 3.67%, Tata Steel down by 3.42%, Hero MotoCorp down by 3.25% and Bajaj Auto down by 3.12% were the top losers.

Meanwhile, following the President’s assent to constitutional amendment enabling the roll-out of the Goods & Services Tax (GST), Finance Ministry has notified the provisions of the Constitution Act, 2016 that will allow setting up of the crucial Goods and Services Tax (GST) Council. The Finance Ministry notification said that the government appointed the 12th day of September, 2016 as the date on which the provisions of section 12 of the Act shall come into force.

According to the provisions of the Constitution Amendment Act, the GST Council will have to be set up within 60 days of its notification. The setting up of the Council is crucial to finalise the modalities of the new tax system. Revenue Secretary Hasmukh Adhia has said that the Finance Ministry will seek approval for setting up the GST Council in the next meeting of the Union Cabinet.

The constitutional body, to be headed by the Union Finance Minister and comprising State Finance Ministers, will decide the rates at which the GST will be levied and collected and have to be paid across the country by consumers. It will also decide the threshold for levy of the tax, the date from which GST will be applicable to petroleum products as well as the dispute resolution mechanism.

GST is a single indirect tax that will subsume most central and state taxes such as value added tax (VAT), excise duty, service tax, central sales tax, additional Customs duty and special additional duty of Customs.

The CNX Nifty is currently trading at 8726.65, down by 140.05 points or 1.58% after trading in a range of 8699.40 and 8746.95. There were 4 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.72%, Tech Mahindra up by 1.18%, HCL Tech up by 0.29% and TCS up by 0.04%.

On the flip side, Hindalco down by 5.46%, Yes Bank down by 4.31%, Adani Ports & Special Economic Zone down by 3.97%, Bank of Baroda down by 3.81% and Axis Bank down by 3.66% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 680.64 points or 2.82% to 23,419.06, Nikkei 225 decreased 290.44 points or 1.71% to 16,675.32, Taiwan Weighted decreased 90.08 points or 0.99% to 8,963.61, Shanghai Composite decreased 62.8 points or 2.04% to 3,016.06 and KOSPI Index decreased 41.42 points or 2.03% to 1,996.45.

Jakarta Stock Exchange, Malaysia Stock Exchange and Singapore Stock Exchange are closed today on account of National holiday.