Benchmarks extend losses; Nifty below 8000 mark

Indian equity benchmarks extended losses in late morning session on account of selling in front line blue chip counter due to weak global cues and as Centre-state stalemate over GST jurisdiction continues. The demonetisation effect also continues to weigh on the bourses with several brokerage firms cutting GDP growth estimates for FY17, FY18. A private report has stated that India’s economic growth is expected to fall by up to 1 percentage points over the next 12 months in the wake of demonetisation, while longer-term gains will depend on follow-up reforms. A united Opposition is all set to corner the government in Parliament today on the demonetisation issue with the Congress issuing a whip to its parliamentarians, and leaders of Opposition parties slated to meet to chalk out a joint strategy. The Opposition had stalled proceedings in both Houses last week, demanding the Prime Minister’s response in the matter. The sentiments were on pessimistic note as the Centre and States on Sunday failed to reach a consensus on who will control which set of assessees under GST. The said meeting which came ahead of the formal meeting of the all powerful GST Council on November 25, was held after the Centre and States were deadlocked over the issue at two previous meetings. The GST Council will meet again on November 25 to work out the modalities. The provisional data with stock exchanges for Friday showed that the FIIs sold stocks worth Rs 988.93 crore, whereas for the entire week ended November 18, foreign investors sold Rs 6,221.11 crore. Investors will closely follow the trend in FII (foreign institutional investors) fund movement in the Indian equity markets. Traders were seen piling up positions in IT and TECK stocks, while selling was witnessed in Realty, Bankex and Auto sector stocks. In the scrip specific development, Shiva Cement was locked at upper circuit limit on reports that Shree Cement has submitted a preliminary offer to buy a majority stake in the Odisha-based Shiva Cement. There were reports that Shiva Cement's promoters were planning to exit and have been in talks with several suitors. They have mandated SBI Caps and L&T Finance to find a buyer.

On the global front, Asian shares were trading mostly in green, as dollar strength took a breather and oil prices jumped. Japan stocks were higher as a weak yen and decent economic data boosted Tokyo-traded shares. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 25,900 levels respectively. The market breadth on BSE was negative in the ratio of 393:1776, while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 25890.20, down by 260.04 points or 0.99% after trading in a range of 25861.02 and 26270.28. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.81%, while Small cap index was down by 2.13%.

The top gaining sectoral indices on the BSE were IT up by 0.23% and TECK up by 0.08%, while Realty down by 3.18%, Bankex down by 2.13%, Auto down by 2.05%, PSU down by 1.52% and Power down by 1.47% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 0.73%, TCS up by 0.51%, Infosys up by 0.25%, ONGC up by 0.20% and GAIL India up by 0.07%.

On the flip side, SBI down by 3.25%, Mahindra & Mahindra down by 2.59%, Power Grid down by 2.55%, Tata Motors down by 2.43% and Tata Steel down by 2.01% were the top losers.

Meanwhile, in a big disappointment, the momentum for the implementation of the goods and services tax (GST) is likely to slow after the Centre and states failed to reach consensus on jurisdiction over assesses. The informal GST meeting of Union Finance Minister and his state counterparts called to break the political deadlock on sharing of administrative control under the proposed goods and services tax (GST) regime, remained inconclusive, therefore discussion will continue on November 25 to work out the modalities. 

The important meeting which came ahead of the formal meeting of the all powerful GST Council on November 25, was held after the Centre and states were deadlocked over the issue at two previous meetings, including sharing of administrative control under the proposed GST regime so that a tax payer is not assessed by both the Centre and the relevant state, the so-called issue of dual control.

States like Uttarakhand, West Bengal, Uttar Pradesh, Tamil Nadu and Kerala insisted on exclusive control over small businesses, which earn less than Rs 1.5 crore in annual revenue, for both goods and services. They feel states have infrastructure deployment at grassroots level and small taxpayers are familiar with state authorities. On the other hand, the Centre is unagreeable to the demand as it wants single registration mechanism for ease to service taxpayers.

The government aims to roll out GST from April 1 next year, which will subsume excise, service tax and local levies. Both the Centre and states will further meet on November 21 and try to workout a solution ahead of the meeting of the GST Council on November 25. At the last meeting, the Council agreed on a four-slab structure - 5, 12, 18 and 28 per cent along with a cess on luxury and ‘sin’ goods such as tobacco.

The CNX Nifty is currently trading at 7981.90, down by 92.20 points or 1.14% after trading in a range of 7970.55 and 8102.45. There were 8 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.99%, Idea Cellular up by 1.05%, HCL Tech up by 0.77%, Wipro up by 0.65% and ONGC up by 0.29%.

On the flip side, Bank of Baroda down by 4.75%, Eicher Motors down by 4.69%, IndusInd Bank down by 3.34%, SBI down by 3.23% and Grasim Industries down by 3.13% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.48 points or 0.15% to 1,626.28, Hang Seng increased 8.43 points or 0.04% to 22,352.64, Shanghai Composite increased 23.27 points or 0.73% to 3,216.13, Taiwan Weighted increased 32.32 points or 0.36% to 9,041.11 and Nikkei 225 increased 135.9 points or 0.76% to 18,103.31.

On the other hand, Jakarta Composite decreased 19.54 points or 0.38% to 5,150.57 and KOSPI Index decreased 4.42 points or 0.22% to 1,969.88.