Benchmarks continue lackadaisical trade in red

Indian equity benchmarks continued their lackadaisical trade in red in late morning session on account of selling in front line blue chip counters. Indian rupee depreciated against dollar in early trade and hit its lowest level since February 2016. Market sentiments for rupee continued to remain weak on hopes that the US President-elect Donald Trump’s proposed fiscal expansion may boost inflation, prompting the Fed to raise rates more aggressively than previously expected. Foreign Institutional Investors (FII) stood net sellers in domestic equity markets on Tuesday and sold shares worth of Rs 1,241.01 crore. Gross purchases and gross sales of FIIs stood at Rs 4,356.18 crore and Rs 5,597.19 crore, respectively. There will be some cautiousness too with no work in parliament and Lok Sabha getting adjourned again after opposition uproar over demonetization. Fitch Ratings stated that the demonetisation of old Rs 500, 1,000 notes will raise revenue for the government but warned that the positive effects of the move are unlikely to be strong and long-lasting to support credit profiles. It said the withdrawal of bank notes, accounting for 86% of the value of currency in circulation, has created a cash crunch, and seems to be holding back economic activity. Separately, former Planning Commission Deputy Chairman Montek Singh Ahluwalia said that demonetisation is likely to pull down GDP growth by 1-2 percentage points as it is disrupting economic activities, especially in the informal sector.

Traders were seen piling up positions in Metal, Capital Goods and Realty stocks, while selling was witnessed in Oil & Gas, Power and PSU sector stocks. In the scrip specific development, Anil Ambani-led Reliance Communications (RCom) was trading in green after the Supreme Court on Tuesday dismissed the Income Tax department’s appeal seeking to tax the proceeds of its $1.5-billion foreign currency convertible bonds (FCCBs) issued by the telecom firm nearly a decade ago. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. November 2016 series to next month i.e. December 2016 series. The near month November 2016 derivatives contracts will expire on Thursday i.e. November 24, 2016.

On the global front, Asian shares were trading mostly in green, as investors tried to share in the exuberance of Wall Street’s record run, while high US bond yields kept the dollar well underpinned. Japan’s Nikkei was closed for a holiday after enjoying a five-session winning streak that took it to the highest finish since January. Indonesia’s central bank will introduce rules next year to enhance its monetary operations and the efficiency of the country’s payment systems.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 26,000 levels respectively. The market breadth on BSE was positive in the ratio of 1283:738, while 113 scrips remained unchanged.

The BSE Sensex is currently trading at 25954.74, down by 6.04 points or 0.02% after trading in a range of 25877.16 and 26130.49. 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 0.41%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Metal up by 1.67%, Capital Goods up by 1.60%, Realty up by 0.85%, Consumer Durables up by 0.41% and IT up by 0.20%, while Oil & Gas down by 0.73%, Power down by 0.51%, PSU down by 0.38%, Bankex down by 0.22% and FMCG down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.99%, Asian Paints up by 2.96%, Tata Steel up by 2.02%, Lupin up by 1.51% and Tata Motors up by 0.94%.

On the flip side, HDFC down by 2.20%, Power Grid down by 1.66%, Wipro down by 1.31%, GAIL India down by 1.11% and Maruti Suzuki down by 1.02% were the top losers.

Meanwhile, in further step of preparation to handle tax deposits under the new Goods and Services Tax (GST) regime, banks are developing and making necessary changes in their information technology system for integration with RBI and Goods and Services Tax Network (GSTN).

Finance Minister Arun Jaitley has said that for integration of the banks' information technology system with RBI and GST portal, detailed protocols have been prepared and finalized by RBI and GSTN, respectively, in consultation with the Government of India. He also said that the public and private sector banks are preparing themselves to handle collection of taxes under the GST regime and remitting it to the government account with RBI. Under the GST regime, individuals and entities can pay taxes online using debit or credit cards or any electronic, mode of payment, including NEFT, RTGS.

The government’s new and simpler GST portal has already gone live on November 8, for migrating tax payers. The GST portal will enable easy filing of returns and tax payments through credit/debit cards and other modes. A provisional identification number, called GSTIN for assesses who have moved to the new portal is being generated and new registrations under GST will start from April 2017.

The CNX Nifty is currently trading at 7994.90, down by 7.40 points or 0.09% after trading in a range of 7973.10 and 8055.20. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.94%, Asian Paints up by 2.92%, Larsen & Toubro up by 2.90%, Tata Motors - DVR up by 2.18% and Tata Steel up by 1.92%.

On the flip side, HDFC down by 2.46%, BPCL down by 2.18%, Power Grid down by 1.63%, Wipro down by 1.55% and GAIL India down by 1.17% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 6.89 points or 0.21% to 3,255.24, KOSPI Index increased 10.17 points or 0.51% to 1,993.64, Taiwan Weighted increased 43.31 points or 0.47% to 9,176.70 and Hang Seng increased 49.77 points or 0.22% to 22,727.84.

On the other hand, Jakarta Composite decreased 12.14 points or 0.23% to 5,192.54 and FTSE Bursa Malaysia KLCI decreased 4.98 points or 0.31% to 1,624.34.

Japan stock exchange was closed on account of ‘Labour Thanksgiving Day’ holiday.