Weak trade continues on Dalal Street; Nifty below 8,150 level

Indian equity benchmarks continued to trade in red in noon session as funds and retail investors engaged in reducing positions amid a weak trend in global markets.  Sentiments remained subdued with the report that foreign institutional investors (FIIs) continued to be on the selling spree having sold Indian equities worth Rs 434.42 crore on Thursday. Jittery investors lacked conviction to build positions as worries over the GST Council meet, which start today. The GST Council, which has Union Finance Minister and state representatives as members, will finalize the model Goods and Services Tax (GST) law, Integrated GST (IGST) law and Compensation law. The meeting has become significant in the light of the controversial comments made by West Bengal finance minister Amit Mitra that demonetization - making over 85% of old Rs 500 and Rs 1,000 currency notes illegal - will delay implementation of GST. Traders were seen selling in FMCG, Consumer Durables and Realty sector stocks. Meanwhile, Telecom stocks like Bharti Airtel, IDEA extended their fall for second consecutive day after Mukesh Ambani-owned Reliance Jio Infocomm extending its free voice and data offer for both new and existing subscribers till March 31, 2017, intensifying the brutal price war in telecom sector.

On the global front, Asian markets were trading mostly lower on Friday following the lackluster cues overnight from Wall Street and on caution ahead of the release of the closely-watched US jobs data later in the day. Investors are also concerned about Italy's constitutional referendum on December 4, 2016. A sharp decline in technology stocks pulled both the Nasdaq and the S&P 500 indexes into the red on Thursday, while the Dow managed to notch a record closing high with a lift from bank and energy shares. 

Back on street, all sectoral indices on the BSE were trading in the red with FMCG index emerging as the top loser down by around one and half percent followed by Realty and Banking indices among others. In scrip specific development, Atul Auto slipped after the company reported a sale of 3,450 units, showing a fall of 13.86% for the month of November 2016 as compared to 4,005 units sold in November 2015. Moreover, Balkrishna Industries hit a record high of Rs 1,286 on NSE, extending its past two days surge after the company reported a robust set of numbers for the quarter ended September 30, 2016.

The market breadth remained pessimistic as there were 670 shares on the gaining side against 1558 shares on the losing side, while 102 shares remained unchanged.

The BSE Sensex is currently trading at 26327.13, down by 232.79 points or 0.88% after trading in a range of 26299.15 and 26445.52. There were 6 stocks advancing against 23 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.73%, while Small cap index down by 0.76%.

The top losing sectoral indices on the BSE were FMCG down by 1.44%, Realty down by 1.08%, Bankex down by 1.00%, Oil & Gas down by 0.88% and Capital Goods down by 0.87%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were GAIL India up by 0.82%, ONGC up by 0.79%, Coal India up by 0.70%, Reliance Industries up by 0.40% and Bharti Airtel up by 0.34%. On the flip side, HDFC down by 2.25%, ITC down by 1.95%, Dr. Reddy’s Lab down by 1.83%, Tata Motors down by 1.68% and Hindustan Unilever down by 1.67% were the top losers.

Meanwhile, after calling off the last meeting due to differences between states and demonetization, the two-day meeting of Goods and Service Tax (GST) council is all set to start on December 2, to finalise the three draft legislations for Central Goods and Services Tax (CGST), Integrated Goods and Services Tax (IGST) and compensation law.

The 2-Day GST Council meet is also likely to take up the vexed issue of cross empowerment of states and the Centre to avoid dual control which has remained a contentious one during the previous two GST Council meetings. The informal GST meeting will be chaired by the Union Finance Minister Arun Jaitley and will have Minister of State in charge of revenue and state finance ministers as members. 

On November 20, Union Finance Minister Arun Jaitley had called for an informal meeting with his state counterparts to thrash out a political solution, but the meet failed to arrive at a common ground on how the Centre and states will control assessees under the new regime. With states unrelenting on their position of being given right to control all assessees with up to Rs 1.5 crore annual turnover, it was decided that officials will meet and work out a possible arithmetic for addressing the issue. 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. 

The government aims to roll out GST from April 1 next year, which will subsume excise, service tax and local levies. 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 8114.45, down by 78.45 points or 0.96% after trading in a range of 8108.45 and 8154.15. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.01%, Tech Mahindra up by 1.04%, Tata Power up by 0.96%, Coal India up by 0.90% and ONGC up by 0.82%. On the flip side, BPCL down by 3.08%, Kotak Mahindra Bank down by 3.04%, HDFC down by 2.11%, Hindustan Unilever down by 1.93% and ITC down by 1.93% were the top losers.

Asian markets were trading mostly in red, Hang Seng declined by 1.15%, Nikkei 225 lost 0.62%, Taiwan Weighted was down by 0.8%, Shanghai Composite decreased by 0.66% and KOSPI Index was lower by 0.7%. On the other hand, FTSE Bursa Malaysia KLCI was tad higher by 0.09% and Jakarta Composite was up by 0.17%.