Indian benchmarks show sluggish movement in noon trade

Indian benchmark indices are showing lackadaisical movements in the noon session on Wednesday, lacking investors’ conviction to pile up fresh positions ahead of the US Federal Reserve's policy outcome, due later today. The Fed is widely expected to stand pat on interest rates, but may drop hints on the possibility of a rate hike in June. The benchmarks continue to move sideways in a narrow range as corporate India is showing its fourth quarter report card and investors are indulging only in stock specific activities. In the broader market, the BSE Midcap pared gains to turn negative, while the BSE Smallcap was up 0.1%.  Sentiments remained subdued on the report that Global agency Fitch Ratings retained the ‘BBB-‘ sovereign rating-the lowest investment grade-on India as weak public finances continue to constrain India’s ratings. The agency has also retained ‘stable’ outlook for the country’s ratings. The rating agency said that India's sovereign ratings balance a strong medium-term growth outlook and favourable external balances with a weak fiscal position and difficult business environment. However, losses remained capped with the report that Prime Minister Narendra Modi is reviewing the progress of the government’s agenda to curb black-money and tax evasion as well as the roll out of the Goods and Services Tax (GST). The government intends to implement the GST from July 1, 2017.

On the global front, Asian markets were trading mixed on Wednesday, as strong earnings and manufacturing data boosted risk appetite, while expectations that the Federal Reserve will signal a June rate increase later in the session will keep investors on their toes. Overnight, Wall Street closed higher, although Nasdaq futures fell alongside Apple shares in extended trading, after the company reported a surprise fall in iPhone sales for the second quarter. Further, oil prices pulled higher after a sharp fall on Tuesday on technical selling in a market already worried about oversupply and following a rise in output from several members of the Organization of Petroleum Exporting Countries.

Back home, stocks from Realty, IT and Power counters were supporting the markets, while those from Metal, Banking and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, TVS Motor Company gained after the company posted a sales growth of 8% during the month of April 2017, with total sales increasing from 227,096 units recorded in the month of April 2016 to 246,310 units in the month of April 2017. Furthermore, Bodhtree Consulting surged after the company bagged an order worth Rs 18.27 crore from Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company, Jabalpur to provide Annual Technical Support (ATS) for the software products of ESRI, Microsoft, Protocol Automation India and McAfee.

The market breadth remained pessimistic, as there were 1254 shares on the gaining side against 1259 shares on the losing side, while 140 shares remained unchanged.

The BSE Sensex is currently trading at 29902.95, down by 18.23 points or 0.06% after trading in a range of 29901.16 and 30020.59. There were 14 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.13%, while Small cap index up by 0.10%.

The top gaining sectoral indices on the BSE were Realty up by 1.59%, IT up by 1.12%, TECK up by 0.79%, Power up by 0.56% and Utilities up by 0.53%, while Metal down by 0.58%, Bankex down by 0.46%, FMCG down by 0.41%, Healthcare down by 0.39% and Capital Goods down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.99%, Infosys up by 1.41%, TCS up by 1.31%, GAIL India up by 0.62% and Hero MotoCorp up by 0.55%. On the flip side, Lupin down by 2.25%, Adani Ports &Special down by 1.18%, ICICI Bank down by 0.96%, SBI down by 0.68% and Maruti Suzuki down by 0.67% were the top losers.

Meanwhile, Prime Minister Narendra Modi has reviewed the preparedness for the rollout of Goods and Services Tax (GST), the country’s most ambitious indirect tax regime since Independence, which the government intends to implement from July 1. Apart from GST roll-out preparations, Modi also discussed progress on the central government’s anti-black money drive post note ban and tax collected thereof.

PM has discussed disclosures made in the tax amnesty scheme announced after the junking of old 500 and 1,000 rupee notes in November last year along with the measures being planned by the tax department against tax evaders. He also reviewed progress made in the anti-black money drive, called Operation Clean Money, and the tax amnesty scheme Pradhan Mantri Garib Kalyan Yojana (PMGKY). The revenue department is also believed to have given a report card on not just the black money disclosed and tax collected thereof, but the ill-gotten wealth seized during searches and raids across the country.

Meanwhile, the scheme, PMGKY, provided for payment of 50 per cent tax and penalty on unaccounted cash deposited in bank accounts. Under the Income Disclosure Scheme (IDS), the first domestic black money disclosure programme last year- Rs 12,700 crore tax have been collected. As for GST, the GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts has decided on the four-tier tax structure of 5, 12, 18 and 28 per cent. The crucial fitment of goods and services in the tax brackets is yet to be decided. The council will meet on May 18-19 and work out on the fitment part.

The CNX Nifty is currently trading at 9313.30, down by 0.50 points or 0.01% after trading in a range of 9311.45 and 9346.30. There were 27 stocks advancing against 22 stocks declining on the index, while 2 stocks remained unchanged.

The top gainers on Nifty were Power Grid up by 2.91%, Ultratech Cement up by 2.35%, Bharti Infratel up by 2.13%, Indiabulls Housing up by 1.39% and TCS up by 1.31%. On the flip side, Lupin down by 2.13%, Tata Power down by 1.97%, Zee Entertainment down by 1.49%, Hindalco down by 1.30% and Adani Ports & SEZ down by 1.23% were the top losers.

Asian markets have turned cautious and were showing mixed trend, Shanghai Composite declined 0.27%, Jakarta Composite was down by 0.05%, and FTSE Bursa Malaysia KLCI was tad lower by 0.03 points. On the flip side, Straits Times added 0.63% and Taiwan Weighted was up by 0.14%.