Key benchmark indices enter into negative territory

Key benchmark indices entered into negative territory in the afternoon session on account of selling in frontline blue chip counters. The sentiments turned pessimistic with President Pranab Mukherjee issuing a note of caution that the Narendra Modi government’s demonetization decision could likely lead to a temporary slowdown in the economy and hurt the poor. Further, the losses in IT, TECK, FMCG and Realty stocks also aided to pessimistic milieu. However, the losses remained capped with the report of Financial Stability and Development Council (FSDC), headed by Finance Minister Arun Jaitley that the country seems to be much better placed today on the back of improvement in its macro-economic fundamentals. The council also noted that the government’s measures to eliminate the shadow economy and tax evasion are likely to have a positive impact on the country’s gross domestic product and fiscal consolidation in the long run. In scrip specific development, Piramal Enterprises was up by over two percent after unveiling plans to foray into housing finance business.

On the global front, Asian markets were trading mixed as investors awaited the release later in the day of key U.S. jobs data.  Back home, the BSE Sensex is currently trading at 26842.46, down by 35.78 points or 0.13% after trading in a range of 26841.42 and 27009.61. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.16%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Bankex up by 0.87%, Metal up by 0.72%, PSU up by 0.51%, Power up by 0.31% and Oil & Gas up by 0.27%, while IT down by 2.36%, TECK down by 1.92%, FMCG down by 0.53%, Realty down by 0.49% and Capital Goods down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.73%, Dr. Reddys Lab up by 1.50%, Asian Paints up by 1.16%, GAIL India up by 1.11% and Tata Steel up by 0.97%. On the flip side, TCS down by 2.29%, Infosys down by 2.25%, Wipro down by 2.12%, ITC down by 1.16% and Maruti Suzuki down by 0.54% were the top losers.

Meanwhile, in order to provide some relief to Indian exporters, the revenue department of the finance ministry has decided to refund as much as 90% of their duty claims within seven days under the proposed Goods and Services Tax (GST) regime. Addressing a major concern of the sector, Commerce and Industry Minister Nirmala Sitharaman has said that ninety percent of the amount claimed by exporters as credit drawbacks will be refunded within seven days. She added that in an undue delay beyond two weeks, interest will be paid on the amount due.

Sitharaman has said that exporters have been demanding exemption from new tax regime on the grounds that delay in refunds often takes months and also results in blocking of working capital. She also said that exports need to be encouraged in view of the global slowdown. In GST council meeting with finance minister Arun Jaitley and others, Sitharaman had stressed there was a need to review the current time-consuming process of refunds claimed by exporters against the duty paid on imports of raw materials or other items under various schemes in the new tax regime. The Commerce and Industry Ministry has recently suggested to the GST Council to exempt leather and plantations sector from the GST ambit.

Commenting on the issue, Commerce Secretary Rita Teaotia has also said that the Department of Commerce has been taking up this matter with the Department of Revenue (DoR). The Secretary also said that the issue about interest payment, what that amount would be and whether it would kick in after two weeks that detail DoR would decide.

The CNX Nifty is currently trading at 8263.65, down by 10.15 points or 0.12% after trading in a range of 8259.40 and 8306.85. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.83%, Yes Bank up by 2.62%, Indusind Bank up by 1.83%, Bharti Infratel up by 1.69% and Dr. Reddys Lab up by 1.49%. On the flip side, HCL Tech. down by 3.46%, Tech Mahindra down by 3.40%, TCS down by 2.25%, Infosys down by 2.22% and Wipro down by 2.18% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 7.17 points or 0.35% to 2,049.12, FTSE Bursa Malaysia KLCI increased 9.23 points or 0.56% to 1,669.05, Taiwan Weighted increased 14.08 points or 0.15% to 9,372.22 and Jakarta Composite increased 14.17 points or 0.27% to 5,339.68. On the flip side, Nikkei 225 decreased 66.36 points or 0.34% to 19,454.33, Shanghai Composite decreased 11.26 points or 0.36% to 3,154.15, Hang Seng decreased 0.61 points or 0% to 22,456.08.