Benchmarks trade lower in early deals on sluggish global cues

Pressurized by weak global cues, Indian equity benchmarks have made a pessimistic start and are trading in red with a cut of over half a percent in early deals. Sentiments also remained dampened, as the State Bank of India has expressed concern that demonetisation, announced in November 2016, may continue to result in slowing down of the economy, and adversely affect its business. It said that the long-term impact of this move on the Indian economy and the banking sector is uncertain. Moreover, traders remained on sidelines ahead of two key economic indicators - IIP and CPI inflation numbers, which are scheduled for released after the market hours.

On the global front, Asian markets were trading mostly in red at this point of time, as the technology companies have tumbled. Investors are also weighing France’s parliamentary elections, where the first round showed President Emmanuel Macron’s party headed for a majority. The US markets made a mixed closing in the last session, while the Nasdaq skidded, Dow climbed to record close.

Back home, traders failed to get any sense of relief with report that the Indian forex reserves surged by $2.404 billion to reach life-time high of $ 381.167 billion in the week to June 2 on account of rise in foreign currency assets. Meanwhile, the market breadth indicating the overall health of the market was weak, with 828 shares gaining and 1172 shares declining, while a total of 95 shares were unchanged.

The BSE Sensex is currently trading at 31093.32, down by 168.74 points or 0.54% after trading in a range of 31070.65 and 31225.43. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.45%, while Small cap index was down by 0.35%.

The few gaining sectoral indices on the BSE were Realty up by 0.88%, Consumer Durables up by 0.29%, Healthcare up by 0.27% and Metal up by 0.26%, while Capital Goods down by 1.03%, IT down by 0.93%, Industrials down by 0.85%, TECK down by 0.83% and Bankex down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.37%, Mahindra & Mahindra up by 1.03%, Tata Steel up by 0.63%, Cipla up by 0.55% and GAIL India up by 0.51%. On the flip side, Wipro down by 2.38%, Adani Ports & Special Economic Zone down by 1.50%, Larsen & Toubro down by 1.45%, TCS down by 1.27% and SBI down by 1.27% were the top losers.

Meanwhile, in order to ensure smooth transition into the new tax regime, The Goods and Services Tax (GST) Council has constituted 18 sectoral groups to interact with the sectors like telecom, banking and export and sort out their issues in a time-bound manner. The other sectors which would be looked into by the group include IT and ITes, textiles, gems and jewellery, food processing, e-commerce, oil and gas, pharma and MSME.

The Council in its fourteenth meeting had decided to set up these sectoral groups to better understand industry concerns as India moves towards the GST, which will subsume 16 different taxes including excise, service tax, VAT and other local levies. The groups formed, represent various sectors of the economy and contain senior officers of the Centre and the States to ensure smooth implementation of GST by giving a timely response to the issues and problems of their respective sector.

The sectoral groups ensure to interact and examine representations received from trade and industry associations/bodies of their respective sector, highlight specific issues for the smooth transition of the respective sector to the GST regime and prepare sector specific draft guidance.

As per the Finance Ministry statement, ‘concerned industry groups/associations or even individual industry representatives may approach the respective sectoral group officers with their problems relating to GST implementation who, in turn, will try to guide and help them in resolving the same’. It also said that this exercise will help in dealing with most of the sectoral problems and issues at the local/regional level. The new levy kicks in from July 1 and the government is hopeful that the sectoral groups will help in dealing with most of the issues at the local and regional levels.

The CNX Nifty is currently trading at 9610.60, down by 57.65 points or 0.60% after trading in a range of 9606.40 and 9647.05. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.20%, Vedanta up by 1.02%, Mahindra & Mahindra up by 0.93%, GAIL India up by 0.49% and Aurobindo Pharma up by 0.44%. On the flip side, Wipro down by 2.49%, Bank of Baroda down by 2.10%, Adani Ports & Special Economic Zone down by 1.63%, Tata Motors - DVR down by 1.56% and Larsen & Toubro down by 1.54% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 317.74 points or 1.22% to 25,712.55, Nikkei 225 decreased 112.89 points or 0.56% to 19,900.37, Taiwan Weighted shed 65.95 points or 0.65% to 10,133.70, KOSPI Index dropped 23.37 points or 0.98% to 2,358.32 and Shanghai Composite was down by 14.1 points or 0.45% to 3,144.30.

On the flip side, Jakarta Composite was up by 21.37 points or 0.38% to 5,696.89.