Markets slip into negative territory; Nifty below 9400 mark

Reversing intraday gains, Indian equity benchmarks slipped into negative territory in late afternoon session, as investors turned cautious ahead of the F&O expiry of May series due tomorrow. Sentiments also dampened by escalating Indo-Pak tensions. As per reports, jet fighters of Pakistan Air Force made flights near Siachen Glacier during the day. But Indian Air Force reportedly said there was no violation of India's air space. Besides, traders awaited the minutes of US Federal Reserve's May policy meeting due later in the day. Some concerns also came with Fitch Ratings’ report stating that GST reform may not boost revenues significantly in the next few years, but it can indirectly boost revenues in the medium term through higher GDP growth and more transparency. It further stated that some significant improvements have taken place in India in recent years, such as on the monetary front, but there are some other factors constraining India's rating, including the high general government debt burden.

On the global front, European markets were trading in red after British Prime Minister Theresa May raised the U.K.'s terror threat to critical from severe and Moody's cut its sovereign credit rating on China, citing concerns over a slowing economy and growing debt. However, Asian markets were trading in green. Back home, in scrip specific development, Orchid Pharma traded higher after the company received Abbreviated New Drug Application (ANDA) approval from the U.S. Food and Drug Administration (USFDA) for Aripiprazole tablets USP, 2 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 30 mg on May 24, 2017.

The BSE Sensex is currently trading at 30320.24, down by 45.01 points or 0.15% after trading in a range of 30288.21 and 30534.15. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.17%, while Small cap index was down by 1.21%.

The only gaining sectoral indices on the BSE were Oil & Gas up by 0.29% and Auto up by 0.09%, while Realty down by 2.18%, Metal down by 1.75%, Capital Goods down by 1.64%, Telecom down by 1.60% and Basic Materials down by 1.57% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.09%, Adani Ports & SEZ up by 2.51%, GAIL India up by 2.09%, Hindustan Unilever up by 1.62% and TCS up by 0.74%. On the flip side, Cipla down by 2.37%, SBI down by 1.85%, Mahindra & Mahindra down by 1.73%, Larsen & Toubro down by 1.55% and Dr. Reddy’s Lab down by 1.53% were the top losers.

Meanwhile, the Goods & Services Tax (GST) which is finally scheduled to rollout from July 1, may not boost revenues 'significantly' in the next few years. Global rating agency Fitch Ratings in its latest report has said that though most of the industries are likely to benefit with GST, there are also concerns that it will likely keep government revenues a bit muted in the near term. Fitch has said that GST reform may not boost revenues significantly in the next few years, but it can indirectly boost revenues in the medium term through higher GDP growth and more transparency.

The rating agency noting GST as an important reform being implemented, has said that it will facilitate trade within India and reduce transaction costs. Earlier, Revenue Secretary Hasmukh Adhia too had said that the tax buoyancy under GST is likely to take a hit immediately, while Finance Minister Arun Jaitley had said that the revenues under GST may see an indirect increase with the widening of the tax net and less tax evasion.

Fitch though has found demonetization as a bold step taken by the country to curb black money and many other reforms like Insolvency and Bankruptcy Code, Aadhaar, Make in India, FDI-related measures and labour market laws as strong reforms, it has said that the country’s governance standards were still weak as far as voice and accountability, government effectiveness, rule of law and control of corruption were concerned. It further stated that some significant improvements have taken place in India in recent years, such as on the monetary front, but there are some other factors constraining India's rating, including the high general government debt burden.

The CNX Nifty is currently trading at 9365.55, down by 20.60 points or 0.22% after trading in a range of 9351.90 and 9431.90. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 5.09%, Tata Motors up by 4.06%, GAIL India up by 2.21%, Yes Bank up by 1.62% and Adani Ports & SEZ up by 1.49%. On the flip side, Bharti Infratel down by 3.21%, Bank of Baroda down by 3.16%, ACC down by 2.61%, Cipla down by 2.42% and Hindalco down by 2.27% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 2.13 points or 0.07% to 3,064.08, KOSPI Index increased 5.6 points or 0.24% to 2,317.34, FTSE Bursa Malaysia KLCI increased 6.72 points or 0.38% to 1,773.89, Hang Seng increased 25.35 points or 0.1% to 25,428.50, Taiwan Weighted increased 36.58 points or 0.37% to 10,044.42 and Nikkei 225 increased 129.7 points or 0.66% to 19,742.98. On the flip side, Jakarta Composite decreased 32.19 points or 0.56% to 5,698.42.

European markets were trading mostly in red; Germany’s DAX decreased 6.34 points or 0.05% to 12,652.81 and France’s CAC decreased 1.24 points or 0.02% to 5,346.92. On the flip side, UK’s FTSE 100 increased 19.39 points or 0.26% to 7,504.68.