Indian bourses continue weak trade; Auto, Banking drag

Indian bourses continued their weak trade in the afternoon session on broad based selling, with frontline gauges trading below their crucial 26,650 (Sensex) and 8,250 (Nifty) levels. The sentiments were pessimistic after the GST council failed to finalize the draft laws and agreed to meet again on December 22 and 23 to hammer out a consensus. Sentiments also remained dampened after India’s industrial production showed steep decline in the month of October due to sharp drag in capital goods and weak performance of overall manufacturing sector, indicating that the situation could be worse in November when the impact of demonetization will be visible. Country’s Index of industrial production (IIP) declined to a three-month low of (-) 1.9 percent in October, compared to rise of 0.7 percent in September and a growth of 9.9 percent in October last year. Investors failed to get any sense of relief with government data showing robust growth in November tax collection. While, Direct Tax Collections up to November, 2016 showed growth of 15.12% led by increase in personal income tax; the Indirect tax collections (Central Excise, Service Tax and Customs) was up by 26.2% in the April-November period compared to the corresponding period last year.

On the global front, Asian markets were trading mixed ahead of a Federal Reserve meeting that is widely expected to raise U.S. interest rates and as oil prices soared after producers agreed to reduce output. Back home, in scrip specific development, Alkem Labs was down by around four percent after its Ankleshwar API facility received three 483 observations from the United States Food And Drug Administration.

The BSE Sensex is currently trading at 26621.07, down by 126.11 points or 0.47% after trading in a range of 26576.80 and 26725.31. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.59%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were PSU up by 0.25%, Metal up by 0.25%, Capital Goods up by 0.24% and Power up by 0.19%, while Auto down by 1.11%, Bankex down by 0.89%, FMCG down by 0.76%, TECK down by 0.67% and IT down by 0.64% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.86%, NTPC up by 1.71%, Sun Pharma Inds. up by 1.13%, Reliance Industries up by 1.01% and Coal India up by 0.76%. On the flip side, Asian Paints down by 2.02%, Tata Motors down by 1.83%, Bajaj Auto down by 1.82%, Axis Bank down by 1.78% and Infosys down by 1.55% were the top losers.

Meanwhile, government data showed robust growth in November tax collection defying all odds. Direct Tax Collections up to November, 2016 showed net collections at Rs. 4.12 lakh crore, 15.12% more than the net collections for the corresponding period last year led by increase in personal income tax; on the same time Indirect tax collections (Central Excise, Service Tax and Customs) up to November 2016 showed that net revenue collections are at Rs 5.52 lakh crore, which is 26.2% more than the net collections for the corresponding period last year, on the back of robust collection in excise duty.

In the Indirect tax collections, excise collections during April-November 2016, rose 43.5% to Rs 2.43 lakh as compared to Rs.1.69 lakh crore during the same period in the previous Financial Year. Service tax collections in the period climbed 25.7% to Rs. 1.60 lakh crore. Net tax collections on account of customs duty during April-November stood at Rs. 1.48 lakh crore as compared to Rs. 1.40 lakh crore during the same period in the previous financial year, thereby registering a growth of 5.6%. Till November 2016, 71.1% of the Budget Estimates of indirect taxes for Financial Year 2016-17 has been achieved.

On the direct tax front, the gross collection of corporate income tax (CIT) grew 11.22 percent, while the growth under personal income tax (PIT) was 22.41 percent over the corresponding period last fiscal. After adjusting for refunds however, the net growth in CIT collections is 8.75 percent, while under PIT it is 23.89 percent. Refunds amounting to Rs.1,05,561 crore have been issued during April-November 2016, up 17.35 percent from a year ago. Till November, 2016, 48.67% of the Budget Estimates of direct taxes for FY 2016-17 has been achieved.

The total direct and indirect tax collections at the end of November stood at Rs 9.64 lakh crore, more than half the Rs 16.26 lakh crore target for 2016-17. The government is eyeing 12.64 percent growth in direct tax at Rs 8.47 lakh crore for the current fiscal and 10.8 percent in indirect tax at Rs 7.79 lakh crore.

The CNX Nifty is currently trading at 8212.50, down by 49.25 points or 0.60% after trading in a range of 8195.35 and 8230.65. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.86%, NTPC up by 1.77%, Sun Pharma Inds. up by 1.09%, Coal India up by 0.96% and Reliance Industries up by 0.90%. On the flip side, Grasim Industries down by 2.09%, BPCL down by 2.07%, Ultratech Cement down by 1.98%, Ambuja Cement down by 1.97% and Asian Paints down by 1.88% were the top losers.

The Asian markets were trading mixed, Hang Seng decreased 209.44 points or 0.92% to 22,551.54, Shanghai Composite decreased 75.62 points or 2.34% to 3,157.27, Taiwan Weighted decreased 42.74 points or 0.46% to 9,349.94 and FTSE Bursa Malaysia KLCI decreased 2.33 points or 0.14% to 1,641.42. On the flip side, KOSPI Index increased 2.55 points or 0.13% to 2,027.24, Jakarta Composite increased 4.39 points or 0.08% to 5,308.13 and Nikkei 225 increased 158.66 points or 0.84% to 19,155.03.