Benchmarks make soft start on feeble global cues

Pressurized by feeble global cues, Indian equity benchmarks have made a soft start and are trading with a cut of over half a percent in early deals on Monday. Traders remained concerned over U.S. President Donald Trump's economic growth agenda. Market participants shrugged off report that government is planning to table four legislations for the implementation of the goods and services tax in the Lok Sabha today. The Union Cabinet has already cleared the four supplementary GST legislations - CGST, IGST, UTGST and Compensation Law - for introduction and passage in the ongoing session of Parliament.

On the global front, Asian markets were trading mostly in red terrain at this point of time, led by the Japanese market which is down by around one and half a percent after the yen strengthened against the dollar. The US markets depicted another lackluster trade in last session after the US president Trump suffered a major blow when House Republicans withdrew the American Health Care Act after they failed to secure enough votes to pass the bill.

Back home, selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include metal, telecom and energy. The broader indices were trading mixed, while the market breadth on the BSE was negative; there were 998 shares on the gaining side against 1,013 shares on the losing side while 99 shares remain unchanged.

The BSE Sensex is currently trading at 29259.24, down by 162.16 points or 0.55% after trading in a range of 29259.24 and 29420.70. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were mixed; the BSE Mid cap index down by 0.16%, while Small cap index was up by 0.05%.

The top losing sectoral indices on the BSE were Metal down by 1.90%, Telecom down by 1.13%, Energy down by 1.03%, Healthcare down by 0.70% and Basic Materials was down by 0.60%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Hindustan Unilever up by 1.07%, SBI up by 0.76%, TCS up by 0.38%, Power Grid up by 0.34% and Axis Bank was up by 0.27%. On the flip side, Tata Steel down by 2.43%, Coal India down by 2.38%, Reliance Industries down by 1.43%, Hero MotoCorp down by 1.38% and Asian Paints was down by 1.32% were the top losers.

Meanwhile, the Comptroller and Auditor General (CAG) Shashi Kant Sharma has said that they are planning to audit the impact of note ban and the effect it has had on the government’s tax revenues. He said that the auditor is preparing to audit tax revenues under the new Goods and service tax (GST) regime and has started reconstruction of capacity building and reorienting its audit methodology and procedures.

Under the special audit, the CAG has already completed the audit of agricultural crop scheme and flood control and flood estimates. Now it is conducting audit of Right to Education, National Rural Health Mission, Defence Pensions and Ganga Rejuvenation. Sharma added that their audit reports will be ready by the end of the current year.

Sharma asserted that the CAG has the right to audit the bodies or authorities having any kind of relationship with the revenue and expenditure of the government, and expenditure and resistance by some like city development bodies, DISCOMs and metro corporations will wither away. He said that they plan to audit some issues related to the financial impact of filing, especially its impact on tax revenues. The government had withdrawn old 500 and 1,000 rupee notes from circulation on November 8 last year, and announced a new tax amnesty scheme for those holding unaccounted junked currency. Thus, CAG audit may look into expenditure on printing of notes, the Reserve Bank of India dividend payout and banking transaction data.

Apart from this, the CAG has also conveyed the government its stand on the recent move of the GST Council to delete section 65 of the preliminary draft that authorized CAG to audit GST. Sharma has said that their mandate covers GST just like the earlier taxation regimes were covered. They have already started work on restructuring of their revenue audit arrangements to meet this likely challenge when GST is introduced. This exercise would include issues of capacity building, data access and analysis, reorientation of audit methodology and procedures and developing end-to-end IT solutions.

The CNX Nifty is currently trading at 9058.40, down by 49.60 points or 0.54% after trading in a range of 9051.60 and 9094.85. There were 11 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 1.54%, Hindustan Unilever up by 0.92%, SBI up by 0.71%, TCS up by 0.38% and Tech Mahindra was up by 0.27%. On the flip side, Idea Cellular down by 2.53%, Tata Steel down by 2.31%, Hindalco down by 2.28%, Coal India down by 2.22% and Aurobindo Pharma was down by 1.91% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 273.37 points or 1.42% to 18,989.16, Hang Seng decreased 67.55 points or 0.28% to 24,290.72, Taiwan Weighted slipped 24.79 points or 0.25% to 9,878.19, Jakarta Composite shed 18.79 points or 0.34% to 5,548.34 and KOSPI Index was down by 12.6 points or 0.58% to 2,156.35.

On the flip side, FTSE Bursa Malaysia KLCI increased 3.8 points or 0.22% to 1,749.55 and Shanghai Composite was up by 4.57 points or 0.14% to 3,274.01.