Markets remain in red; Nifty struggles to get back 9500 mark

Indian equity benchmarks remained lackluster in late afternoon session, as traders stayed cautious ahead of the launch of the goods and services tax (GST), with the Nifty struggling to get back 9500 level. The revised tax structure will kick in from midnight today, marking India’s biggest tax reform since independence, unifying its $2 trillion economy and 1.3 billion people into a common market. Weakness in Asian peers following losses on Wall Street overnight also hurt sentiment. However, losses were limited as sentiments took support from Industry body FICCI’s statement that the rollout of GST will bring about significant gains to India’s economy and it looks forward to working with the government for successful implementation of the crucial tax reform. Besides, Arun Jaitley said that GST is an efficient and simple system with less corruption, adding that prices should decline after GST is in place July 1, while anticipating some teething troubles. Shares of telecom companies were trading in red with ICRA's latest report that intense competition and pricing pressure will continue to take a toll on the telecom sector with industry revenue expected to fall another 6 percent during the current financial year.

On the global front, European markets were trading mixed as major central banks suggested the era of cheap money may be coming to an end. Asian markets were trading in red. Back home, in scrip specific development, Patel Integrated Logistics edged higher after the company executed loan documents of amount of Rs 5.00 crore with Small Industries Development Bank of India (SIDBI) for setting up warehouse facility at Bangalore on 2.20 acres land obtained on very long term lease of 99 years from Karnataka Industrial Areas Development Board (KIADB).

The BSE Sensex is currently trading at 30798.71, down by 58.81 points or 0.19% after trading in a range of 30680.66 and 30872.49. There were 13 stocks advancing against 18 stocks declining on the index.

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

The top gaining sectoral indices on the BSE were FMCG up by 1.18%, Healthcare up by 1.16%, Consumer Durables up by 0.42%, IT up by 0.36% and Power up by 0.28%, while Telecom down by 1.60%, Realty down by 1.35%, Capital Goods down by 0.90%, Auto down by 0.84% and Energy down by 0.82% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.34%, ITC up by 2.60%, Dr. Reddy’s Lab up by 1.89%, TCS up by 1.38% and Tata Steel up by 1.22%. On the flip side, Tata Motors - DVR down by 2.29%, Bharti Airtel down by 2.09%, ICICI Bank down by 2.03%, Larsen & Toubro down by 1.84% and Tata Motors down by 1.72% were the top losers.

Meanwhile, in order to improve the investment climate of the country, the government will clear all foreign direct investment (FDI) proposals within a maximum of 10 weeks after the receipt of an application as per the Standard Operation Procedure (SOP) released by the Department of Industrial Policy and Promotion (DIPP). The newly formulated SOP will replace the 25-year old foreign investment advisory body- the Foreign Investment Promotion Board (FIPB) which has been abolished by the government.

As per the SOP guidelines, proposals not requiring security clearance will be cleared in eight weeks, while applications that require security nod would take a cumulative time period of ten weeks. Besides, DIPP will get an additional time of two weeks for consideration of the proposals proposed for rejection or where additional conditions which are not provided in the FDI policy are proposed to be imposed by the competent authority.

Furthermore, the FDI proposals requiring government’s nod need to be scrutinized by the concerned ministries or departments and such proposals will be filed online on the revamped FIPB portal which has been renamed as Foreign Investment Facilitation Portal (FIFP). FDI applications which require security clearances include investments in broadcasting, telecommunication, satellites, private security agencies, defence, civil aviation and mining & mineral separation of titanium bearing minerals and ores.

The CNX Nifty is currently trading at 9480.40, down by 23.70 points or 0.25% after trading in a range of 9448.75 and 9502.60. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.85%, Bank of Baroda up by 3.15%, ITC up by 2.31%, Dr. Reddy’s Lab up by 1.98% and Aurobindo Pharma up by 1.97%. On the flip side, Bharti Airtel down by 2.24%, Tata Motors - DVR down by 2.14%, Indiabulls Housing Finance down by 2.09%, Tech Mahindra down by 2.06% and Larsen & Toubro down by 1.92% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 200.84 points or 0.77% to 25,764.58, Nikkei 225 decreased 186.87 points or 0.92% to 20,033.43, Taiwan Weighted decreased 26.58 points or 0.26% to 10,395.07, FTSE Bursa Malaysia KLCI decreased 8.55 points or 0.48% to 1,762.81 and KOSPI Index decreased 3.87 points or 0.16% to 2,391.79. On the flip side, Shanghai Composite increased 4.36 points or 0.14% to 3,192.43.

European markets were trading mixed; Germany’s DAX increased 12.98 points or 0.1% to 12,429.17 and France’s CAC increased 18.23 points or 0.35% to 5,172.58. On the flip side, UK’s FTSE 100 decreased 12.84 points or 0.17% to 7,337.48.