Benchmarks trade lower in early deals on feeble global cues

Indian equity benchmarks have made a feeble start and are trading under pressure in early deals on Thursday amid weak global cues. Traders also remained concerned with Prime Minister Narendra Modi’s top economic adviser Bibek Debroy’s statement that the negative shock from demonetisation will last until the end of March, though he also said that improved growth next year should fully compensate for the loss. Also, the minutes of last rate-setting meeting of the Reserve Bank of India’s monetary policy committee (MPC) showed that it shifted its focus towards inflation, while playing down concern about economic growth. Sentiments also remained dampened on report that the foreign portfolio investors (FPIs) sold shares worth a net Rs 1178.08 crore on December 21, 2016.

Weak global cues too dampened sentiments with Asian markets trading lower at this point of time tailing the US markets, despite the oil prices firming up after falling Wednesday for the first time in a week. Back home, investors will keep an eye on the two-day Goods & Services Tax (GST) Council meet which begins later in the day. The GST Council will discuss drafts of the model GST, integrated GST and states' compensation Bills. Broader markets too were trading in-line with benchmarks.

The market breadth remained in favor of decliners, as there were 457 shares on the gaining side against 1,330 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex is currently trading at 26,093.03, down by 149.35 points or 0.57% after trading in a range of 26076.86 and 26248.45. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.77%, while Small cap index was down by 0.73%.

The top losing sectoral indices on the BSE were Metal down by 0.94%, Bankex down by 0.88%, Power down by 0.82%, Capital Goods down by 0.75% and IT was down by 0.71%, while there were no gainers on the BSE sectoral front.

The few gainers on the Sensex were Sun Pharma up by 1.01%, Tata Motors up by 0.42% and Hindustan Unilever was up by 0.33%. On the flip side, Axis Bank down by 1.41%, Adani Ports &Special down by 1.32%, Mahindra & Mahindra down by 1.27%, NTPC down by 1.19% and Bharti Airtel down by 1.16% were the top losers.

Meanwhile, in a bid for a digital and cashless economy, government has given its nod for cashless salary. The Union Cabinet has approved the ordinance route to amend the Payment of Wages Act, 1936, to allow employers of certain industries to make payment through the electronic mode and cheques. Employers will now have the option of cashless payment, while the option of payment in cash still exists, but the law will allow state governments to specify industrial units or other establishments that should go the cashless way.

The Bill introduced by Labour Minister Bandaru Dattatreya will also allow state governments to specify industrial or other establishments that adopt cashless way for salary payments. The Bill stated that the new procedure will serve the objective of ‘digital and less-cash economy’. The government has introduced ordinance to amend laws for immediate implementation of new rules. An ordinance is valid for six months only and the government is required to get it passed in Parliament within that period.

The Payment of Wages (Amendment) Bill, 2016, seeks to amend Section 6 of the principal Act to enable employers to pay wages to employees through cheques or by crediting it to their bank accounts electronically. The Act had come into force on April 23, 1936, providing for payment of wages in coin or currency notes, or in both. The provision for payment of wages by cheque or crediting it into bank account after obtaining the requisite authorisation of employee was inserted in 1975. At present, the Act covers all those employees in certain categories of establishments whose wage does not exceed Rs 18,000 per month.

The CNX Nifty is currently trading at 8014.70, down by 46.60 points or 0.58% after trading in a range of 8006.80 and 8046.45. There were 7 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.08%, Eicher Motors up by 0.64%, Bharti Infratel up by 0.61%, Tata Motors up by 0.47% and Hindustan Unilever was up by 0.35%. On the flip side, Hindalco down by 2.07%, Tech Mahindra down by 1.59%, Bank of Baroda down by 1.52%, Adani Ports &Special down by 1.51% and Axis Bank down by 1.38% were the top losers.

Asian markets were trading in red; Hang Seng decreased 184.55 points or 0.85% to 21,625.25, Nikkei 225 slipped 61.56 points or 0.32% to 19,382.93, Taiwan Weighted fell 56.94 points or 0.62% to 9,147.32, Jakarta Composite shed 16.94 points or 0.33% to 5,094.45, Shanghai Composite decreased 5.67 points or 0.18% to 3,131.76, FTSE Bursa Malaysia KLCI dipped 2.39 points or 0.15% to 1,627.20 and KOSPI Index was down by 2.21 points or 0.11% to 2,035.75.