Benchmarks trade choppy in early deals

Indian equity benchmarks have made a weak opening and are trading choppy in early deals on Friday, as traders opted to book profit after the previous session’s rally. Weakness in Regional counterparts too dampened sentiments, with most of the indices trading modestly in red, paring their last session gains as the dollar strengthened and oil retreated from a two-week high. However, losses remained capped as some solace came with the centre and states, moving towards rolling out GST from April 1, agreeing on a timetable for deciding on the tax rate and completion of legislative work, but differences remained on the turnover limit for exemption from the new tax. Some support also came with Minister of State for Finance Arjun Ram Meghwal stressing that the new indirect tax regime is a major tool for improving ease of doing business and has also said that the government will be able to implement Goods and Services Tax (GST) from April 1, next year.

On the sectoral front, telecom stocks ringing loud with Vodafone Group Plc pumping in a record Rs 47,700 crore of overseas investment into its Indian operation to take on Reliance Industries’ Jio. Selected export oriented stocks too remained on buyers’ radar, as the government has extended fiscal incentives to more items such as marine products at higher rates under a scheme with a view to boost exports, which remain in the negative zone. The total support extended by the government under the Merchandise Exports from India Scheme (MEIS) has been enhanced to Rs 23,500 crore per annum from the present Rs 22,000 crore.

In scrip specific development, shares of L&T Technology Services made a decent debut on bourses today and were trading with a gain of around 3.50% from its issue price of Rs 860. Larsen & Toubro (L&T) too were trading in green after signing the principle contract with Vietnam Border Guard valued at $99.7 million.

The BSE Sensex is currently trading at 28755.69, down by 17.44 points or 0.06% after trading in a range of 28714.93 and 28825.09. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.52%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Realty up by 0.91%, Oil & Gas up by 0.81%, Capital Goods up by 0.75%, Energy up by 0.71% and Consumer

Durables up by 0.62%, while Bankex down by 0.54%, Auto down by 0.14% and Finance down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 0.94%, TCS up by 0.86%, Reliance Industries up by 0.72%, Mahindra & Mahindra up by 0.66% and ONGC up by 0.44%. On the flip side, Axis Bank down by 2.91%, Lupin down by 1.02%, Tata Motors down by 0.82%, ICICI Bank down by 0.80% and Infosys down by 0.67% were the top losers.

Meanwhile, the government has appointed 3 members of the Monetary Policy Committee (MPC) for four years. The MPC for the first time will take a call on the policy rate at the October 4 monetary review. The government appointed members are, Indian Statistical Institute's (ISI's) Chetan Ghate, Director of Delhi School of Economics Pami Dua and Indian Institute of Management (Ahmedabad) professor Ravindra H Dholakia. The three outside experts will join Reserve Bank of India (RBI) Governor Urjit Patel and two senior officials from the bank’s monetary policy department.

The Appointments Committee of the Cabinet cleared the three eminent experts as members on the MPC for a period of four years or until further orders, whichever is earlier. Among the three outsider experts Ghate was part of a five-member technical advisory committee that provided non-binding advice on interest rates to the RBI governor ahead of each policy review. The committee will be responsible for ensuring consumer inflation stays within a range of 2 to 6 percent, a target that was previously announced by the government. The members of the committee from RBI are governor Patel, deputy governor R. Gandhi, who is also in charge of the monetary policy, and executive director Michael Patra. Patel, who took over the helm at the RBI earlier this month, will have the casting vote in the six-member MPC in the event of a tie.

The MPC framework replaces the current system where the RBI governor and his internal team have complete control over monetary policy. While a committee advises RBI on monetary policy decisions, the central bank is under no obligation to accept its recommendations. The MPC will strive to ensure that the inflation target decided by the government and the central bank is met. RBI is now required to publish a monetary policy report every six months explaining the sources of inflation and the forecasts of inflation for the period between six to 18 months.

The CNX Nifty is currently trading at 8863.75, down by 3.70 points or 0.04% after trading in a range of 8847.40 and 8885.20. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.33%, BPCL up by 1.29%, Larsen & Toubro up by 0.94%, HCL Tech up by 0.89% and TCS up by 0.85%. On the flip side, Axis Bank down by 2.93%, Lupin down by 1.12%, Tata Motors down by 0.84%, ACC down by 0.78% and Eicher Motors down by 0.76% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 29.37 points or 0.17% to 16,778.25, Hang Seng slipped 12.43 points or 0.05% to 23,747.37, Jakarta Composite dipped 3.15 points or 0.06% to 5,377.11, Shanghai Composite shed 2.69 points or 0.09% to 3,039.62 and FTSE Bursa Malaysia KLCI was down by 1.03 points or 0.06% to 1,668.63.
On the flip side, KOSPI Index increased 0.98 points or 0.05% to 2,050.68 and Taiwan Weighted was up by 24.02 points or 0.26% to 9,259.28.