Indian bourses continue to trade lower in noon deals

Key benchmark indices continued to trade lower in noon session on broad based selling, with frontline gauges trading below their crucial 25,800 (Sensex) and 7,950 (Nifty) levels. The sentiments were subdued after domestic rating agency ICRA in its latest report stated that India's gross value added growth is likely to be at 6.6 percent in 2016-17, as economic activity will take more time to normalise following the government's move to demonetise high-value notes. Sentiments weakened further despite Finance Minister Arun Jaitley’s clarification that there is no intention of government to impose long-term capital gains tax on securities transactions in the upcoming budget. The clarification came a day after Prime Minister Narendra Modi reportedly dropped a clue on increasing taxes on capital markets and the necessity for all sections, including market players to contribute to the national building through taxes. In scrip specific development, Panacea Biotec surged over five percent after the company launched world's first fully liquid tetravalent vaccine Easyfour-TT in India to protect children from vaccine-preventable diseases.

On the global front, Asian markets were trading on a mixed note in light trading after Christmas with most Asian markets remaining closed. Back home, the BSE Sensex is currently trading at 25781.52, down by 259.18 points or 1.00% after trading in a range of 25753.74 and 26008.57. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.95%, while Small cap index was down by 1.65%.

The top losing sectoral indices on the BSE were Metal down by 3.12%, Realty down by 2.48%, PSU down by 1.75%, Power down by 1.51% and Auto down by 1.45%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Hindustan Unilever up by 0.32% and Dr. Reddys Lab up by 0.06%. On the flip side, Cipla down by 4.76%, Tata Steel down by 2.24%, Tata Motors down by 2.04%, Power Grid Corpn. down by 1.92% and Hero MotoCorp down by 1.90% were the top losers.

Meanwhile, Industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) has suggested removal of a provision in the revised Model GST Law dealing with anti-profiteering, since it is open to misuse and subjective interpretation. In a detailed representation to the Central Board of Excise and Customs (CEBC) and the Finance Minister Arun Jaitley, the ASSOCHAM also sought clarity on a wide range of issues like location of recipient and supplier of services and the treatment of related party transactions.

ASSOCHAM said that in the revised Model GST Law, the central government has been given powers to constitute an authority to examine whether input tax credits availed of by any registered taxable person, or the benefit of a reduction in the tax rate, has resulted in a commensurate reduction in the price of the goods or services supplied. Also, the authority would have powers to impose penalties where the prices of goods or services supplied are not reduced.

Industry body added that while the intent of such a proposal cannot be questioned, the industry believes that it will be very difficult to implement and the costs of compliance and administration will significantly outweigh the risks that some businesses will seek to ‘profiteer’ from the change in indirect tax systems. With regard to location of recipient and supplier of services for the purpose of ascertaining place of supply, the chamber has said the concept of business establishment be introduced (which should be only one location per legal entity) for sake of simplicity, such as location could be the billing address of the recipient/ supplier.

The CNX Nifty is currently trading at 7901.05, down by 84.70 points or 1.06% after trading in a range of 7893.80 and 7970.05. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 0.61%, TCS up by 0.09%, Dr. Reddys Lab up by 0.07%, Reliance Industries up by 0.05% and Lupin up by 0.00%. On the flip side, Hindalco down by 5.62%, Cipla down by 4.54%, Aurobindo Pharma down by 3.58%, Bharti Infratel down by 2.90% and Yes Bank down by 2.51% were the top losers.

Asian markets were trading mixed, KOSPI Index increased 1.85 points or 0.09% to 2,037.75, Shanghai Composite increased 5.15 points or 0.17% to 3,115.30 and Nikkei 225 decreased 31.03 points or 0.16% to 19,396.64.