Benchmarks snap four days gaining streak on Friday

Record hitting streak comes to an end on Friday, with frontline gauges settling tad below their neutral lines, as traders opted to book some of their profits after four days of continues rally. Initially, Sensex opened at a new high of over 32,100 mark, while Nifty too hit a new peak of 9,900 mark for the first time ever on strong buzz that a policy rate cut may be on the anvil after inflation touched a ‘record low’. However, markets failed to hold on to their gains and entered into red terrain, breaching their respective crucial levels, as traders remained concerned with disappointing earnings by the Tata Consultancy Services, India’s largest software services exporter whose quarterly profit fell 10 percent sequentially, while revenues declined 0.2 percent. Moreover, another IT bellwether firm Infosys reported a 3.3 per cent sequential drop in net profit at Rs 3,483 crore for June quarter. Investors also remained on sidelines ahead of high-profile meeting chaired by Prime Minister Narendra Modi to review the country’s foreign direct investment policy, where further easing of restrictions may also be discussed.

Losses remained capped with report that India is ranked 116 out of 157 nations on a global index that assesses the performance of countries towards achieving the ambitious sustainable development goals (SDGs). India with a score of 58.1, is behind countries such as Nepal, Iran, Sri Lanka, Bhutan and China. The SDG Index and Dashboards Report shows world leaders need to strengthen their efforts to realize the 17 global goals. Some solace also came with report that the wholesale price index based inflation fell to 0.9 percent in June from 2.17 percent in May. The fall in WPI as well as CPI inflation raised hopes for rate cut by RBI in August monetary policy.

Global stocks scaled record highs on Friday, with Asian equities rising for the fifth straight session, as signs the Federal Reserve will pursue a gradual rate tightening path and hopes of a strong earnings season lifted appetite for risk assets. However, European counters were trading mostly in red in early deals, as investors looked ahead to earnings reports from Wall Street banks and monitored developments from a meeting between the French and US presidents.

Back home, export oriented stocks edged lower after top exporter body FIEO said the Goods and Services Tax (GST) will severely dent the liquidity situation of traders and the compliance cost of merchant exporters may go up. Stocks related to insurance space remained in focus on reports that HDFC Life Insurance may call off its proposed takeover of the Max group’s life insurance business as the two have not been able to arrive at a mutually agreeable alternative structure for the transaction.

The NSE’s 50-share broadly followed index Nifty slipped marginally to end below its psychological 9,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex decreased by over ten points but managed to hold its crucial 32,000 mark. The broader markets too traded witnessed pressure and ended the session mixed. The market breadth remained in favour of decliners, as there were 1,015 shares on the gaining side against 1,676 shares on the losing side, while 131 shares remain unchanged.

Finally, the BSE Sensex declined 16.63 points or 0.05% to 32,020.75, while the CNX Nifty was down by 5.35 points or 0.05% to 9,886.35. 

The BSE Sensex touched a high and a low of 32,109.75 and 31,897.87, respectively and there were 14 stocks on gainers side as against 17 stocks on the losers side on the index.

The broader indices ended mixed; the BSE Mid cap index gained 0.22%, while Small cap index was down by 0.35%.

The top gaining sectoral indices on the BSE were Utilities up by 1.08%, Telecom up by 0.91%, Healthcare up by 0.89%, Oil & Gas up by 0.67% and PSU up by 0.50%, while IT down by 0.95%, Industrials down by 0.64%, TECK down by 0.60%, Realty down by 0.59% and Capital Goods was down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.02%, Kotak Mahindra Bank up by 1.61%, SBI up by 1.04%, Cipla up by 0.96% and Reliance Industries up by 0.80%. On the flip side, TCS down by 1.85%, Wipro down by 1.78%, Tata Motors down by 1.42%, Coal India down by 1.14% and Tata Motors - DVR down by 1.11% were the top losers.

Meanwhile, Central Board of Excise & Customs (CBEC) has clarified that importers, exporters and customs brokers of goods that are exempted from Goods and Services Tax (GST) regime, do not require to obtain a GST registration number. It also said that they can clear their consignments by mentioning PAN in the bills of entry or shipping bills. The customs department issued the clarification amid reports of some consignments being delayed at ports for want of clarity on rules governing the new tax regime.

The Goods and Services Taxpayer Identification Number (GSTIN) is a 15 digit unique code which is allotted to each business entity which registers with the commercial tax department. It replaces Taxpayer Identification Number (TIN) - the unique 11 digit number allotted to each business entity which was registered with the commercial tax department in the previous indirect tax regime.

CBEC has stated that post of the rollout of GST from July 1, there have been some confusion over requirement of GSTIN for clearance of consignments at ports. It noted that the Central GST Act exempts businesses engaged exclusively in the supply of goods (import and export) which are exempt from GST from obtaining registration under the new indirect tax regime. Besides, Directorate of International Customs (DIC) has been set up on July 1 which will assist the CBEC in international matters pertaining to customs, integrated GST and tariff matters.

The CNX Nifty traded in a range of 9,913.30 and 9,845.45. There were 24 stocks in green as against 27 stocks in red.

The top gainers on Nifty were Aurobindo Pharma up by 5.87%, GAIL India up by 4.92%, ACC up by 3.03%, NTPC up by 2.07% and Bharti Infratel up by 1.75%. On the flip side, Indian Oil Corporation down by 2.06%, TCS down by 2.00%, Tata Motors down by 1.69%, Wipro down by 1.59% and Tata Motors - DVR down by 1.39% were the top losers.

The European markets were trading mostly trading in red; UK’s FTSE 100 decreased 15.93 points or 0.21% to 7,397.51 and Germany’s DAX was down by 5.96 points or 0.05% to 12,635.37, while France’s CAC was up by 6.3 points or 0.12% to 5,241.70.

Asian equity markets ended mostly in green on Friday as investors digested Fed Chair Janet Yellen's measured comments on the second day of her testimony before Congress and looked ahead to earnings from a slew of US banks due later in the day for direction. Yellen on Thursday spoke about the dual risks of inflation and the factors holding down productivity growth. She said that it would be quite challenging for the United States to reach the three percent growth target set by President Donald Trump. Chinese shares ended tad higher as Fitch Ratings maintained the country's sovereign ratings at 'A+' with 'stable' outlook, but warned a further increase in economy's overall leverage and tighter monetary conditions will constrain growth prospects over the medium term. Hong Kong stocks finished higher, extending their gains to a fifth-straight day following another record close on Wall Street. Further, Japanese shares closed marginally higher ahead of a three-day weekend.