Weak trade prevails; Nifty below 8200 mark

Indian equity benchmarks continued their weak trade in the late morning session as investors engaged in cutting down their bets. The rupee was trading lower against the US dollar in early trade as the American currency strengthened overseas. Foreign Institutional Investors (FIIs) continued to sell in the local equity markets tracking the fall in global markets. Since November 9 to 11, FIIs sold over Rs 4,320 crore provisionally in equities. The muted second quarterly earnings posted by some more blue chip companies accelerated selling activity. The sentiments were on pessimistic note on concern with the Congress hardening its position ahead of the winter session of Parliament on the Goods and Services Tax (GST) Bill, saying it is opposed to the four-slab tax structure in which the top limit is 28%. The Congress and seven other Opposition parties met on Monday - ahead of the Winter Session of Parliament beginning November 16 - to formulate a joint strategy to put the government on the mat on a range of issues including the demonetisation move that has caused great inconvenience to the people, especially the poor. All eyes are now on the CPI and WPI data scheduled to be announced today. WPI eased to 3.57% in September after a drop in food prices. CPI was at 4.31% in September. The street is also taking the note of demonetisation move whereby it is expected that there may be a negative impact on the GDP in the October-December quarter, as consumption shock gets transmitted into the system. It will also have a far-reaching impact on the capital-intensive real estate sector where almost one-third of transactions still involve unaccounted money. Since most of the cash in circulation now will be converted to bank deposits, banks will be the biggest beneficiaries of the demonetisation move. Traders were seen selling in Consumer Durables, Auto and Realty sector stocks.

On the global front, Asian shares were trading mostly in green, showing resilience to the selloff that had been hitting global markets. China-share traders were taking in stride the fact that China’s onshore yuan dropped to an eight-year low against the US dollar. Investors braced for higher inflation in the United States amid expectations of fiscally expansionary polices under Donald Trump’s presidency. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,200 and 26,600 levels respectively. The market breadth on BSE was negative in the ratio of 271:2042, while 85 scrips remained unchanged.

The BSE Sensex is currently trading at 26525.05, down by 293.77 points or 1.10% after trading in a range of 26321.01 and 26809.61. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 3.62%, while Small cap index was down by 4.24%.

The losing sectoral indices on the BSE were Consumer Durables down by 5.81%, Auto down by 4.27%, Realty down by 4.00%, Oil & Gas down by 1.96% and Metal down by 1.71%, while there were no gaining indices on BSE sectoral front.

The top gainers on the Sensex were SBI up by 2.60%, Dr. Reddy’s Lab up by 1.97%, Wipro up by 1.38%, ONGC up by 1.32% and ITC up by 0.88%.

On the flip side, Tata Motors down by 7.57%, Asian Paints down by 7.55%, Tata Steel down by 5.48%, HDFC down by 4.90% and Maruti Suzuki down by 4.86% were the top losers.

Meanwhile, CBEC Chairman Najib Shah has said that the government will share the model GST law with the states, which has been redrafted after taking into account the comments of stakeholders. He further said that the Compensation law will also be shared with the states on November 16 detailing the procedure for making good revenue loss of states in the first five years of GST rollout.

The Centre and states have already decided on a four-tier GST rates-- 5, 12, 18 and 28 percent-- but is yet to decide on the issue of cross empowerment to avoid dual control. Differences arose with the states demanding control over 11 lakh service tax assessees, and the Centre proposing to do away with the states having exclusive control over all dealers up to an annual revenue threshold of Rs 1.5 crore -- an issue which was settled in the first meeting of the GST Council.

The Council has came up with two proposals -- horizontal division and vertical division options, 'Horizontal division' would mean taxpayers would be divided both for administrative and audit purposes based on a cut off turnover. Those with a turnover over Rs 1.5 crore would be administered both by the Centre and states, while those with below Rs 1.5 crore would be administered solely by the states. While, under the 'vertical division', taxpayers could be divided in a ratio which would balance the interest of the Centre and the state, both with respect to revenue and spread of numbers.

The CNX Nifty is currently trading at 8174.20, down by 122.10 points or 1.47% after trading in a range of 8125.60 and 8288.55. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 7.10%, Hindalco up by 4.06%, SBI up by 2.05%, Dr. Reddy’s Lab up by 1.79% and ONGC up by 1.54%.

On the flip side, Asian Paints down by 7.91%, Tata Motors down by 7.82%, Tata Motors - DVR down by 7.64%, Grasim Industries down by 6.82% and Ultratech Cement down by 6.44% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 15.42 points or 0.95% to 1,632.06, Taiwan Weighted increased 17.11 points or 0.19% to 8,957.51, Jakarta Composite increased 45.5 points or 0.89% to 5,161.23 and Hang Seng increased 94.93 points or 0.43% to 22,317.15.

On the other hand, Nikkei 225 decreased 15.76 points or 0.09% to 17,656.86, Shanghai Composite decreased 7.8 points or 0.24% to 3,202.58 and KOSPI Index decreased 3.26 points or 0.17% to 1,971.14.