Indian benchmarks continue to trade in red in noon session

Indian benchmarks continued to trade in red in noon session as investors turned jittery over the Centre's future reform policies in view of appointment of Yogi Adityanath as the Chief Minister of the country's most populous state. The MP from Gorakhpur, who lacks administrative experience, was unanimously elected the BJP legislature party leader at a meeting of the newly elected MLAs, in a move that took many by surprise. Sentiments remained downbeat with the report that expansion or modernisation projects that have been undertaken without obtaining prior environment clearance (EC) will be treated as violation and strict action will be taken by the government.  However, losses remained capped with the report that the Cabinet has approved four bills to implement a planned Goods and Services Tax (GST) bills, paving the way for Prime Minister Narendra Modi to implement the landmark tax reform from July. The four bills are likely to be taken up by Parliament this week and a separate state GST bill in state assemblies later. Further, India has begun the process of dismantling some of the last remaining controls in the foreign direct investment (FDI) framework. The department of economic affairs (DEA) has floated a draft Cabinet note for inter-ministerial consultation to scrap the Foreign Investment Promotion Board (FIPB), in line with a plan announced by finance minister Arun Jaitley in his February 1 budget.

On the global front, Asian markets are exhibiting mixed trend on Monday after global finance ministers dropped a pledge to oppose trade protectionism from a weekend statement in the face of resistance from the Trump administration. Further, Hong Kong stocks edged higher after the US Federal Reserve’s dovish stance on future interest rate increases sparked a rally late last week. Meanwhile, U.S. stocks closed mixed Friday, dragged down by declines in financial and health care stocks.

Back home, stocks from Consumer Durables, Realty and Healthcare counters were supporting the markets, while those from Telecom, TECK and Metal counters were adding to the underlying cautious undertone. Meanwhile, tyre stocks edged higher after the report suggests that the Commerce Ministry to meet on March 28, to discuss anti dumping duty. In past one-week, most of the tyre stocks outperformed the market by gaining up to 14% against 1.9% rise in the benchmark index. In scrip specific development, ONGC gained after the company inked definitive agreements to buy out debt-ridden GSPC’s entire 80% stake in KG-basin natural gas block for $1.2 billion.

The market breadth remained pessimistic, as there were 1200 shares on the gaining side against 1250 shares on the losing side, while 177 shares remained unchanged.

The BSE Sensex is currently trading at 29499.45, down by 149.54 points or 0.50% after trading in a range of 29482.40 and 29699.48. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.04%, while Small cap index up by 0.20%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.83%, Realty up by 0.67%, Healthcare up by 0.36%, Power up by 0.21% and S&P BSE Consumer Discretionary Goods & Services up by 0.11%, while Telecom down by 1.49%, TECK down by 1.16%, IT down by 1.16%, Metal down by 0.95% and Basic Materials down by 0.58% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 0.84%, Lupin up by 0.82%, NTPC up by 0.69%, HDFC up by 0.67% and Cipla up by 0.54%. On the flip side, ICICI Bank down by 2.26%, Infosys down by 1.97%, Tata Steel down by 1.80%, Axis Bank down by 1.74% and TCS down by 1.54% were the top losers.

Meanwhile, in order to minimise price rise after the launch of Goods and Services Tax (GST) regime, the revenue department is going to work out the impact of GST on inflation before the fitment committee starts fixing rates for various goods and services. Besides, the department has said that it will work on an exempted list for both goods and services and will keep GST rates close to the current tax rate for the majority of items which are having heavy weights in the Consumer Price Inflation (CPI) basket.

The GST Council has finalised a multiple-slab rate structure, including the cess, for the new indirect tax. The four slabs have been set at 5, 12, 18 and 28 per cent for different items or services and a cess would be levied on demerit and luxury goods, the proceeds of which will be utilised to compensate the revenue loss incurred by states on roll out of Goods and Services Tax (GST) regime. Moreover, all existing cesses, apart from the environment cess and the national contingency and calamity duty (NCCD), will be abolished under the GST regime.

The department further noted that if the revenue accruing from levy of cess falls short of the amount required to compensate states, then the Centre will borrow funds from the exchequer and added that in order to repay the additional fund which would be borrowed from the exchequer, the cess can be continued for sixth year if the GST Council decides.

The CNX Nifty is currently trading at 9120.15, down by 39.90 points or 0.44% after trading in a range of 9116.30 and 9167.60. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.30%, Tata Power up by 0.93%, HDFC Bank up by 0.85%, NTPC up by 0.84% and Bharti Infratel up by 0.76%. On the flip side, Idea Cellular down by 9.71%, ICICI Bank down by 2.25%, Infosys down by 1.97%, Tata Steel down by 1.86% and Axis Bank down by 1.77% were the top losers.

Asian markets were trading mixed; Shanghai Composite slipped 0.25%, KOSPI Index shed 0.44% and Jakarta Composite was down by 0.36%. On the flip side, Taiwan Weighted gained 0.04%, FTSE Bursa Malaysia KLCI 0.24% and Hang Seng was up by 0.57%.