Benchmarks extend losses in late morning session

Indian equity benchmarks extend losses in the late morning session on account of selling in frontline blue chip counters as investors indulged in cutting down their bets on disappointing macroeconomic data and weak trend in Asian markets. The sentiments were under pressure on account of mixed set of macro-economic data. India’s factory output again dipped to a negative growth of (-) 2.4 percent in July from an expansion of 1.95 per cent in the month before, dragged down by a negative growth of (-) 3.4 percent in the manufacturing sub-index, which enjoys the maximum weight in the main index, however India’s annual retail inflation eased by 100 basis points to 5.05 percent in August. Some selling crept in after Indian rupee opened weak against the US dollar at the Forex market as demand for American currency rose among banks and importers. Traders were seen piling up positions in Realty, Bankex and Power stocks, while selling was witnessed in Metal, Capital Goods and Auto sector stocks. In scrip specific development, Reliance Infrastructure was trading in green on reporting a 7.21% rise in its consolidated net profit at Rs 438.80 crore for the quarter ended June in comparison to net profit of Rs 409.27 crore for the same quarter in 2015-16.

On the global front, Asian stocks mostly retreated for a fifth day and Malaysia’s ringgit sank to its lowest since June as the prospect of global central banks turning less accommodative unnerves investors. Traders are looking for secure positions with Chinese markets closed for holidays on Thursday and Friday and investors counting down to meetings of the Bank of Japan and the Federal Reserve next week. 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 positive in the ratio of 1335:792, while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 28300.24, down by 53.30 points or 0.19% after trading in a range of 28259.38 and 28416.41. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Realty up by 0.45%, Bankex up by 0.35%, Power up by 0.29%, PSU up by 0.09% and Consumer Durables up by 0.01%, while Metal down by 0.87%, Capital Goods down by 0.31%, Auto down by 0.22%, IT down by 0.21% and TECK down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.93%, Adani Ports & Special Economic Zone up by 1.29%, Asian Paints up by 1.26%, Cipla up by 1.16% and SBI up by 1.01%.

On the flip side, Coal India down by 2.33%, Tata Steel down by 1.98%, ONGC down by 1.65%, TCS down by 1.34% and Tata Motors down by 1.28% were the top losers.

Meanwhile, according to a survey of corporate India by Feedback Business Consulting Services, which covered 67 companies from various sectors, GST rollout will be positive for the economy as it will generate more revenue and bring in transparency. Around 72 per cent of the survey respondents felt investments will rise across sectors and a significant portion of this will come in the form of FDI especially in heavy engineering and automotive sectors.

The survey stated that once GST gets implemented there will be some other benefits  including tremendous reduction in the overall transportation and logistics costs, supply chain efficiency and better penetration of markets and export effectiveness. The bill is also expected to boost tax collection by making compliance easy for retailers and other businesses as also reduce overall taxation levels.

However, it also said that companies are worried about the timing of implementation of GST bill and fixing of rate at which tax will be charged. There might be some heartburns like inflation in the early days of implementation but GST will improve GDP of the country in the long run. It also added that states where the goods and services are consumed will benefit more as GST is consumption-based tax and not production-based. For India to grow faster, foreign direct investments (FDI) is important, for that purpose the implementation of GST bill is important as this will help to attract more FDI across sectors due to tax transparency and ease of doing business which will significantly boost markets in India. 

The CNX Nifty is currently trading at 8704.40, down by 11.20 points or 0.13% after trading in a range of 8688.90 and 8737.60. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.81%, NTPC up by 2.16%, Tech Mahindra up by 1.53%, Yes Bank up by 1.40% and Asian Paints up by 1.18%.

On the flip side, Coal India down by 2.25%, Tata Steel down by 1.70%, ONGC down by 1.61%, HDFC down by 1.38% and TCS down by 1.35% were the top losers.

The Asian markets were trading mostly in red; Jakarta Composite decreased 76.38 points or 1.46% to 5,139.19, Nikkei 225 decreased 71.96 points or 0.43% to 16,657.08, Taiwan Weighted decreased 34.61 points or 0.39% to 8,906.22, Shanghai Composite decreased 17.24 points or 0.57% to 3,006.27 and FTSE Bursa Malaysia KLCI decreased 15.91 points or 0.95% to 1,661.27.

On the other hand, Hang Seng increased 43.49 points or 0.19% to 23,259.25. South Korean stock market was closed on account of ‘Chusok - Full Moon Festival’ holiday.