Benchmarks extend losses; Nifty slips below 8000 mark

Indian equity benchmarks extended losses in late morning session on account of selling in front line blue chip counters. The selling pressure picked up pace and was visible across the sectors which dragged the indices below key support level. Foreign Institutional Investors continue to sell Indian shares. On Wednesday FIIs sold shares worth Rs 1,178 crore, while domestic institutional investors bought shares worth Rs 1,058 crore. The sentiments were under pressure 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. 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. The minutes showed that all members expressed concern over rising risk from global oil prices, and domestic non-oil and non-food inflation. The Goods and Services Tax (GST) Council will begin its two-day meeting in New Delhi today to consider the model laws and iron out differences on the issue of jurisdiction over assessees in the new indirect tax regime. This will be the seventh meeting of the Council and Union Finance Minister Arun Jaitley will chair the meeting. The aim will be to address the contentious issue of administrative turf between the Centre and the state. GST Council in its last meeting had cleared 20 chapters of the model GST law and today they will discuss the remaining seven chapters. Traders were seen selling in Metal, Capital goods and Power sector stocks. In scrip specific development, KDDL was trading firm after the company announced allotment of 264,150 zero coupon convertible warrants at a premium of Rs 255 per share to Swades Capital, a promoter group entity.

On the global front, Asian shares were trading in red, after a lacklustre performance on Wall Street, with investors looking to US economic data later in the day for potential catalysts even as markets started winding down ahead of the holidays. The market volumes began to thin out in the run-up to the Christmas holidays with many investors sitting on the sidelines. Many major markets in Asia will remain close on Monday (and a few on Tuesday as well) to observe Christmas, though Japan and China will remain open. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 26,100 levels respectively. The market breadth on BSE was negative in the ratio of 468:1585, while 99 scrips remained unchanged.

The BSE Sensex is currently trading at 26060.42, down by 181.96 points or 0.69% after trading in a range of 26027.58 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 was down by 1.04%, while Small cap index was down by 0.93%.

The losing sectoral indices on the BSE were Metal down by 1.68%, Capital Goods down by 1.06%, Power down by 1.03%, Bankex down by 0.98% and PSU down by 0.89%, while there were no gainers.

The top gainers on the Sensex were Sun Pharma up by 0.55%, Hindustan Unilever up by 0.54% and Tata Motors up by 0.46%.

On the flip side, Tata Steel down by 2.14%, Adani Ports & Special Economic zone down by 1.92%, Axis Bank down by 1.57%, HDFC down by 1.52% and SBI down by 1.45% were the top losers.

Meanwhile, the Central Board of Direct Taxes (CBDT), the policy-making body for the Income Tax (I-T) department, has asked the department to pull up their socks to step up the drive for targeted collection of revenue arrears as the figures show over 60% of shortfall in cash collection. As per the I-T department targeted projections of Rs 53.98 crore for the current fiscal, only Rs 19.68 crore has been collected till the end of November. CBDT further cleared that only about 37 per cent of the target has been achieved till now.

CBDT Chairman Sushil Chandra said that the level of performance in this critical result area of the department's work is completely non-acceptable. Three quarters of the financial year are already over and not even 50 per cent of the target has been achieved which itself was fixed at a fraction of the total arrears outstanding.

Chandra has asked the department to take all measures for stepping up cash collection out of arrears as well as current demand so that not only the target set in this regard is met but significant contribution is also made towards achievement of the overall budget target of the regions (across the country), he has also sought collection of all due recoveries from all the regions that will boost the overall tax collection at the end of the current financial year on March 31 next year.

The CNX Nifty is currently trading at 7999.75, down by 61.55 points or 0.76% after trading in a range of 7991.50 and 8046.45. There were 9 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 0.64%, Zee Entertainment up by 0.58%, Hindustan Unilever up by 0.50%, Bharti Infratel up by 0.49% and Tata Motors up by 0.44%.

On the flip side, Hindalco down by 2.67%, Adani Ports & Special Economic Zone down by 2.08%, Tata Steel down by 1.93%, Bank of Baroda down by 1.84% and SBI down by 1.64% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 197.89 points or 0.91% to 21,611.91, Taiwan Weighted decreased 70.91 points or 0.77% to 9,133.35, Nikkei 225 decreased 52.66 points or 0.27% to 19,391.83, Jakarta Composite decreased 18.08 points or 0.35% to 5,093.31, Shanghai Composite decreased 6.87 points or 0.22% to 3,130.56, KOSPI Index decreased 2.14 points or 0.11% to 2,035.82 and FTSE Bursa Malaysia KLCI decreased 2.09 points or 0.13% to 1,627.50.