Benchmarks continue weak trade in late morning session

Indian equity benchmarks continued their weak trade in the late morning session on account of selling in frontline blue chip counters tracking global front. Investors maintained a cautious approach as September rainfall fell 15 percent below average, which could mean the season will end up in deficit. However, the downside was limited on reports that Prime Minister Narendra Modi has reviewed preparations for roll out of the new Goods and Services Tax (GST) regime, possibly from April 1 next year, with Finance Minister Arun Jaitley and his team making a presentation on the milestones achieved and the road ahead. The presentation detailed the steps to follow including the timetable to get the supporting legislations approved. Traders were seen piling up positions in FMCG and Realty stocks, while selling was witnessed in Bankex, Oil & Gas and Metal sector stocks. In scrip specific development, Reliance Communications was trading in green after its Board of Directors agreed to merge its wireless telecom business with smaller rival Aircel to create the country’s 4th-biggest mobile phone operator with asset base of more than Rs 65,000 crore. Sunteck Realty was trading in green after it reported nearly 9-fold rise in consolidated net profit figures at Rs 60.12 crore for the quarter ended June 30, 2016 against Rs 6.95 crore in the corresponding quarter a year ago.

On the global front, Asian markets were trading mixed as investors grappled with the apparently diminishing ability of major central banks to stimulate growth, while a tumble in crude oil prices added to the risk-averse mood. Indonesia’s trade balance fell more-than-expected last month to 0.29B, from 0.59B in the preceding month. Singaporean Retail Sales rose to a seasonally adjusted 2.8%, from 1.3% in the preceding month whose figure was revised up from 0.9%. 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 1213:893, while 137 scrips remained unchanged.

The BSE Sensex is currently trading at 28363.26, down by 8.97 points or 0.03% after trading in a range of 28311.11 and 28432.74. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.42%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were FMCG up by 1.00% and Realty up by 0.59%, while Bankex down by 0.79%, Oil & Gas down by 0.74%, Metal down by 0.71%, PSU down by 0.71% and Capital Goods down by 0.60% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.12%, ITC up by 1.79%, Sun Pharma up by 1.14%, Hindustan Unilever up by 0.87% and Adani Ports & Special Economic Zone up by 0.77%.

On the flip side, Axis Bank down by 2.21%, Hero MotoCorp down by 1.99%, Tata Steel down by 1.39%, Larsen & Toubro down by 1.09% and Power Grid down by 1.06% were the top losers.

Meanwhile, with an aim to roll out Goods and Services Tax (GST) bill, country's most ambitious indirect tax reform since independence, from April 1, 2017, Prime Minister Narendra Modi has reviewed the progress on implementation of action plan.

Finance Minister Arun Jaitley along with his team including Finance Secretary Ashok Lavasa and Revenue Secretary Hasmukh Adhia made a presentation on the state of readiness for creation of GST bill. Prime Minister reportedly wanted to understand the main areas where he should focus his mind on. Also, he wanted an update on the revenue neutral rate, IT backbone being developed and concerns of the states. The government wants to implement the new regime from April 1 so as to ensure a smooth rollover to the changed tax structure from the beginning of the new fiscal and avoid mid-year alterations.

The presentation detailed the steps to follow including the timetable to get the supporting legislations approved. This presentation came within days of the Union Cabinet approving setting up of all powerful GST Council. PM was informed about the widespread demand for keeping GST rate at 18-19 per cent, expectations of states from the new regime and the impact of different tax slabs on the Centre in terms of compensation it has to pay states for loss of revenue.

GST, which was first proposed a decade back, is seen as potentially transformative for India’s economy, adding as much as 2 percentage points to the GDP while also improving the ease of doing business and encourage investment in manufacturing. It is also expected to result in greater tax compliance, boosting government revenues.

The CNX Nifty is currently trading at 8719.90, down by 6.70 points or 0.08% after trading in a range of 8704.35 and 8749.20. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.06%, ITC up by 1.87%, Sun Pharma up by 1.17%, Aurobindo Pharma up by 1.12% and BHEL up by 1.02%.

On the flip side, Yes Bank down by 2.72%, Axis Bank down by 2.16%, Hero MotoCorp down by 1.95%, Bank of Baroda down by 1.66% and Tata Steel down by 1.42% were the top losers.

The Asian markets were trading mixed; Jakarta Composite increased 54.05 points or 1.05% to 5,200.09 and Hang Seng increased 87.63 points or 0.38% to 23,278.27.

On the other hand, Nikkei 225 decreased 197.87 points or 1.19% to 16,416.37 and FTSE Bursa Malaysia KLCI decreased 5.96 points or 0.36% to 1,655.43.

Shanghai Stock Exchange, Seoul Stock Exchange and Taiwan Stock Exchange are closed today on account of National holiday.