Indian bourses continue to trade modestly in red

Tracking negative leads from global markets, Indian equity benchmarks continued to trade modestly in red in the afternoon deals, on account of selling in frontline blue chip counters. Sentiments remained subdued with global credit rating agency Fitch maintaining its negative outlook on Indian banks because of erosion of the sector’s core capitalization, even as they enter the final phase of Basel III migration. Some concern also came with Finance Minister Arun Jaitley’s statement that people may have to face some difficulty initially during the Goods and Services Tax (GST) is rolled out, but in the long run the new indirect tax regime would help cut tax evasion and check price rise. Moreover, Investors maintained cautious approach ahead of the F&O expiry of June series due tomorrow. In scrip specific development, Steel Strips Wheels rose around a percent after receiving export order for supply of steel wheels for EU Caravan & Canadian Winter market.

On the global front, Asian markets were trading in red, following the weak cues overnight from Wall Street after Senate Republicans delayed vote on a bill to replace Obamacare. Investors also digested European Central Bank President Mario Draghi's comments that the central bank could trim its stimulus this year. Back home, the BSE Sensex is currently trading at 30919.90, down by 38.35 points or 0.12% after trading in a range of 30876.25 and 31000.48. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index up by 0.36%.

The top gaining sectoral indices on the BSE were Metal up by 1.26%, Realty up by 0.88%, Basic Materials up by 0.64%, Utilities up by 0.58% and Power up by 0.50%, while Consumer Durables down by 0.95%, Energy down by 0.77%, Capital Goods down by 0.29%, FMCG down by 0.26% and Oil & Gas down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.87%, ICICI Bank up by 1.63%, Maruti Suzuki up by 1.40%, Power Grid up by 0.97% and Tata Motors up by 0.71%. On the flip side, Asian Paints down by 2.34%, Reliance Industries down by 1.79%, SBI down by 1.63%, Adani Ports & SEZ down by 0.84% and ITC down by 0.51% were the top losers.

Meanwhile, appreciating the government’s decision to defer the enforcement of Tax Collection at Source (TCS) provision under the Goods and Services Tax (GST) regime, the Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the decision will boost e-commerce. The industry body further noted deferment of TCS as a welcome step, saying that the immediate enforcement of TCS under GST would have slowed down the growth of e-commerce with consequential negative impact on economic growth, job creation, and infrastructure investments and possibly tax collections itself.

The industry body said that TCS would have a direct impact on the sellers of the marketplace, who are generally small in nature with a turnover in the range of Rs 50 lakh to Rs 10 crore per annum. Besides, it said that TCS could have disrupted the cash flow, thereby disrupting the level playing field between online selling and offline selling, and discouraged sellers particularly SMEs from selling online. FICCI further expressed need of right policy frameworks and guidelines for the sector in order to make it more productive.

The government postponed the Tax Deducted at Source (TDS) and TCS provisions for the time being after the feedback received from trade and industry. Besides, persons supplying goods or services through an electronic commerce operator and liable to collect tax at source will not be required to register immediately until the TCS provision is brought into force.  The decision was taken to provide more time for persons liable to deduct tax at source, e-commerce companies and their suppliers to prepare for the rollout of the forthcoming tax regime.

The CNX Nifty is currently trading at 9505.95, down by 5.45 points or 0.06% after trading in a range of 9479.80 and 9522.50. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.99%, Yes Bank up by 1.92%, Tech Mahindra up by 1.89%, Tata Steel up by 1.77% and ICICI Bank up by 1.65%. On the flip side, Asian Paints down by 2.41%, Reliance Industries down by 1.90%, SBI down by 1.64%, Zee Entertainment down by 1.34% and Aurobindo Pharma down by 1.21% were the top losers.

Asian markets were trading in red, Hang Seng decreased 142.59 points or 0.55% to 25,697.40, Taiwan Weighted declined 121.51 points or 1.16% to 10,390.55, Nikkei 225 was down by 94.68 points or 0.47% to 20,130.41, Shanghai Composite shed 16.73 points or 0.52% to 3,174.46, KOSPI Index dipped 9.39 points or 0.39% to 2,382.56 and FTSE Bursa Malaysia KLCI decreased 5.54 points or 0.31% to 1,773.91.