Sensex, Nifty continue to trade lower

Tracking weak opening of European markets, Indian equity benchmarks continued to trade lower in late afternoon session, with caution ahead of the Goods and Services Tax (GST) implementation and heavy selling pressure in Auto, PSU and Consumer Disc stocks. Investors remained pessimistic with Icra’s latest report that the current financial year 2017-18 (FY18) may continue to pose asset quality pain for the Indian banking sector, owing to restructuring by banks, weakness of some large corporate accounts along with the increasing demand for waiver of farm loans. Some concerns also came with the report that funding of crop loan waivers is likely to worsen the fiscal deficit and leverage levels of state governments with gross state development loans issued by the state governments expected to rise by Rs 70,000 crore in FY2018. However, markets recouped some of the losses with Urjit Patel’s statement that the GST regime will expand the taxation base which in turn will lower the overall tax burden in the long-term. 

On the global front, European markets were trading in red, as investors monitored fresh data, oil prices and focused on developments from the EU Summit in Brussels. Asian markets were trading mixed. Back home, in scrip specific development, Zee Entertainment edged higher after the company inked pact with UK-based BBC WorldWide.

The BSE Sensex is currently trading at 31203.10, down by 87.64 points or 0.28% after trading in a range of 31128.36 and 31365.39. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.79%, while Small cap index was down by 1.24%.

The only gaining sectoral indices on the BSE were Utilities up by 0.13% and Power up by 0.11%, while Industrials down by 1.18%, Auto down by 1.10%, PSU down by 1.09%, Consumer Disc down by 0.97% and Capital Goods down by 0.90% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.43%, ICICI Bank up by 1.05%, Infosys up by 0.60%, Wipro up by 0.57% and Sun Pharma up by 0.44%. On the flip side, SBI down by 1.97%, Tata Motors down by 1.68%, Tata Motors - DVR down by 1.60%, ONGC down by 1.43% and Tata Steel down by 1.31% were the top losers.

Meanwhile, with the beginning of the final countdown of the Goods and Services Tax (GST) rollout from July 1, 2017, Union Power Minister Piyush Goyal, allayed fears of the industry saying that power tariffs will not rise across the country post GST implementation and made it clear that industry associations have not sought postponement of it.

Goyal further said that the technical issues of all the sectors with regard to GST have been resolved in the meeting with 75 industry associations, except two issues -the issue of tax on a product made up of fly ash and the other one is a dual slab rate structure for cable industry products, noting that these two issues require more consultations.

Union Power Minister said that the industry is enthusiastic about the transition to a more transparent tax regime and termed the GST as the biggest reform that ever happened in independent India. He further highlighted advantage of it, saying the assessee will only have to enter the sales invoice and after that all the returns are auto-populated. Goyal also mentioned that any transformation of this nature will have teething problems and require a transition period.

The CNX Nifty is currently trading at 9594.00, down by 36.00 points or 0.37% after trading in a range of 9565.30 and 9647.65. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation up by 2.22%, Vedanta up by 1.15%, Zee Entertainment up by 1.00%, ICICI Bank up by 1.00% and NTPC up by 0.63%. On the flip side, Bosch down by 2.08%, Indian Oil Corp. down by 2.05%, SBI down by 2.00%, Bank of Baroda down by 1.88% and GAIL India down by 1.72% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 8.23 points or 0.35% to 2,378.60, Shanghai Composite increased 10.42 points or 0.33% to 3,157.87 and Nikkei 225 increased 22.16 points or 0.11% to 20,132.67. On the flip side, Taiwan Weighted decreased 21.36 points or 0.21% to 10,377.70, Hang Seng decreased 4.48 points or 0.02% to 25,670.05 and FTSE Bursa Malaysia KLCI decreased 1.01 points or 0.06% to 1,776.42.

All European markets were trading in red; Germany’s DAX decreased 32.8 points or 0.26% to 12,761.20, UK’s FTSE 100 dropped 26.21 points or 0.35% to 7,413.08 and France’s CAC was down by 13.93 points or 0.26% to 5,268.00.