Markets extend losses to trade near lowest point of the day

Indian equity benchmarks extended its losses and hovering near lowest point of the day in late afternoon session despite positive global cues. Worrying WPI data and disappointing third quarter earnings dampened the trading sentiments. Some concerns also came with a private report that WPI inflation is expected to rise in the next three months and is likely to average around 4.4 per cent in 2017, much higher than 2 per cent in 2016.  Furthermore, investors remained on the sidelines and refrained from any buying activity, ahead of the 10th meeting of the all-powerful GST Council this weekend, where a critical anti-profiteering clause in the draft Goods and Services Tax law to ensure that the benefit of lower taxes gets shared with consumers is likely to be finalized. The Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, is also likely to finalise the definition of 'agriculture' and 'agriculturist' as well as the constitution of a 'National Goods and Services Tax Appellate Tribunal' to adjudicate on disputes.

On the global front, European markets were trading in green following buoyant trading in Asia, as investors continued to digest hawkish remarks made by Fed chair Janet Yellen before the Senate Banking Committee. Janet Yellen painted a largely upbeat picture of the world's largest economy during the first day of her two-day testimony and indicated the central bank could raise short-term interest rates at its next policy meeting in March. Asian markets were also trading in green. Back home, in scrip specific development, Bharat Electronics (BEL) traded higher after the company unveiled a new Weapon Control system - Remote Controlled Weapon Station (RCWS)/Air Defence Weapon Station (ADWS) for 12.7 mm Gun of MBT Arjun Mk II battle tank, at Aero India 2017, on February 14, 2017.

The BSE Sensex is currently trading at 28123.51, down by 215.80 points or 0.76% after trading in a range of 28102.23 and 28382.32. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.37%, while Small cap index was down by 1.62%.

The sole gaining sectoral index on the BSE was FMCG up by 0.04%, while Realty down by 3.35%, Auto down by 2.85%, Metal down by 1.85%, PSU down by 1.54%, Power down by 1.25% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 0.94%, HDFC Bank up by 0.76%, Reliance Industries up by 0.35%, Bajaj Auto up by 0.27% and Axis Bank up by 0.15%. On the flip side, Tata Motors down by 9.55%, Sun Pharma down by 4.08%, Tata Steel down by 2.86%, Hero MotoCorp down by 1.78% and ICICI Bank down by 1.68% were the top losers.

Meanwhile, in order to prevent any rise in price of commodities after goods and services tax (GST) Law implementation, the GST council in its 10th Meeting on 18 February is likely to finalise an anti-profiteering clause in the draft GST law to ensure that trade and industry pass the benefits of reduction in tax rates to consumers.

The government is keen that benefit of lower taxes is passed on to consumers and so an anti- profiteering measure has been incorporated into the draft law. Anti-profiteering clause provides for constituting an authority to ensure its implementation which will examine whether input tax credits availed by any registered taxable person, or the reduction in the price on account of any reduction in the tax rate, have actually resulted in a commensurate reduction in the price of the said goods and/or services supplied by him.

The GST council in its meeting is also expected to finalise the definition of 'agriculture' and 'agriculturist' as well as the constitution of a 'National Goods and Services Tax Appellate Tribunal' to adjudicate on disputes. If the GST Council approves the revised draft in its meeting, the government will attempt to present it before Parliament in the second half of current Budget Session next month.

The CNX Nifty is currently trading at 8714.95, down by 77.35 points or 0.88% after trading in a range of 8712.85 and 8807.90. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.96%, ITC up by 0.83%, Bharti Infratel up by 0.74%, HDFC Bank up by 0.68% and Bosch up by 0.67%. On the flip side, Tata Motors - DVR down by 9.22%, Tata Motors down by 8.89%, Sun Pharma down by 3.94%, BHEL down by 3.62% and BPCL down by 3.22% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.97 points or 0.06% to 1,709.87, KOSPI Index increased 9.29 points or 0.45% to 2,083.86, Taiwan Weighted increased 80.98 points or 0.83% to 9,799.76, Nikkei 225 increased 199 points or 1.03% to 19,437.98 and Hang Seng increased 291.86 points or 1.23% to 23,994.87. On the flip side, Shanghai Composite decreased 4.94 points or 0.15% to 3,212.99.

All European markets were trading in green; France’s CAC increased 12.18 points or 0.25% to 4,908.00, UK’s FTSE 100 increased 26.61 points or 0.37% to 7,295.17 and Germany’s DAX increased 55.39 points or 0.47% to 11,827.20.