Benchmarks continue lackluster trade in late morning session

Indian equity benchmarks continued their lackluster trade in the late morning session in absence of any upside triggers and tracking regional counterparts. The choppy trade was witnessed despite Fed’s decision to hold fire which brought market relief. The sentiments were under pressure after rupee weakened against the dollar at the Interbank Foreign Exchange market on fresh demand for the American currency from importers. The street failed to draw some support 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. Traders were seen piling up positions in Realty, Oil & Gas and PSU stocks, while selling was witnessed in Bankex, FMCG and Auto sector stocks. In scrip specific development, L&T Technology Services was trading in green after debuting today on the bourses. The Rs 900 crore IPO issue was subscribed 2.53 times. The IPO was sold in the price band of Rs 850-860 between September 12 and September 15.

On the global front, Asian markets were mostly lower, while yen retreated slightly against the US dollar on caution over a possible response from Japanese authorities regarding the currency’s latest strength. The MNI China business sentiment index came at 55.8 in September 2016, up from a marginally revised 54.1 in August, driven by a faster increase in new orders and a further strengthening in confidence among manufacturing companies. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,900 and 28,800 levels respectively. The market breadth on BSE was positive in the ratio of 1166:915, while 171 scrips remained unchanged.

The BSE Sensex is currently trading at 28738.49, down by 34.64 points or 0.12% after trading in a range of 28714.93 and 28825.09. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.42%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Realty up by 0.95%, Oil & Gas up by 0.89%, PSU up by 0.30%, Capital Goods up by 0.30% and Power up by 0.27%, while Bankex down by 0.72%, FMCG down by 0.19% and Auto down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.76%, ONGC up by 0.71%, Bajaj Auto up by 0.71%, TCS up by 0.69% and HDFC Bank up by 0.52%.

On the flip side, Axis Bank down by 4.33%, Lupin down by 1.50%, ICICI Bank down by 0.87%, Tata Motors down by 0.77% and Infosys down by 0.62% were the top losers.

Meanwhile, moving on a fast track to roll out Goods and Services Tax (GST) from April 1, 2017, the Centre and states in the first meeting of GST council, agreed on a timetable for deciding on tax rate and completion of legislative work, however differences remained on the turnover limit for exemption from the new tax.

Finance Minister Arun Jaitley on the first day of the meeting said that there was a consensus on timetable to solve pending issues, keeping a possible target of April 1, 2017 in mind. He added that the target also involves passage of CGST (central GST) and IGST (integrated GST) laws by the Centre and state GST laws by the state legislatures in the winter sessions itself and the they have two months’ time till November 22 to resolve all outstanding issues.

In the first meeting of GST council states like Tamil Nadu and Uttar Pradesh demanded a larger say than one-state-one-vote principle that puts a smaller state on an equal footing with a large manufacturing one, though the demand was, however, overruled by others. States also could not arrive at a consensus on exemption to dealers from the GST, while some states demanded traders with turnover of Rs 10 lakh or less be exempted, a large number, including Delhi wanted a threshold at Rs 25 lakh of annual turnover. With tax collected from traders being just 2 percent of the total tax collection, majority view was in favour of a higher exemption limit.

The GST Council meeting chaired by Union Finance Minister Arun Jaitley and which includes representatives of all the 29 states and 2 union territories, would further have discussion on compensation formula with regard to the provision for cross empowerment. Also clarity on base year for compensating states for loss of revenue following implementation of GST will be discussed.

The CNX Nifty is currently trading at 8858.65, down by 8.80 points or 0.10% 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 BHEL up by 1.87% and Bharti Infratel up by 1.39%, HCL Tech up by 1.26%, BPCL up by 1.08% and Bajaj Auto up by 0.76%.
On the flip side, Axis Bank down by 4.28%, ACC down by 1.59%, Lupin down by 1.52%, Ambuja Cement down by 1.22% and Eicher Motors down by 0.84% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 33.08 points or 0.2% to 16,774.54, Hang Seng decreased 24.79 points or 0.1% to 23,735.01, Jakarta Composite decreased 8.67 points or 0.16% to 5,371.59, Shanghai Composite decreased 3.52 points or 0.12% to 3,038.79 and FTSE Bursa Malaysia KLCI decreased 1.04 points or 0.06% to 1,668.62.

On the other hand, KOSPI Index increased 2.03 points or 0.1% to 2,051.73 and Taiwan Weighted increased 28.16 points or 0.3% to 9,263.42.