Benchmarks gyrate near neutral line

Indian equity benchmarks continued their lackluster trade gyrating around neutral line in morning session, in absence of any upside triggers. The rupee opened lower against dollar on account of buying of the American currency by banks and importers. Foreign Portfolio Investors (FPI) stood net buyers in domestic equity markets on Wednesday and bought shares worth Rs 375.85 crore with gross purchases and gross sales of Rs 6,645.22 crore and Rs 6,269.37 crore. Traders shrugged off the Asian Development Bank (ADB) report which predicted Asia’s economy to expand faster in 2017; South Asia to remain the fastest growing of all sub-regions and India to achieve a 7.4 percent growth due to strong consumption. Meanwhile, Finance Minister Arun Jaitley described the Goods and Services Tax (GST) as a win- win deal for all as it will expand the tax net, end inspector raj and bring down prices of goods. Jaitley added that prices of goods have come down between four to eight per cent since its roll-out on July 1. Mixed reactions were displayed in banking stocks taking clue from CRISIL report that banks may have to incur significant losses in the process of resolving the mammoth bad loans. Lenders may have to forget 60% of their outstanding dues or about Rs 2.4 lakh crore from top 50 stressed companies that could not repay their loans leading to insolvency battles. 

Traders were seen piling up position in Realty, Bankex and Energy stocks, while selling was witnessed in IT, Metal and TECK sector stocks. In scrip specific development, Oil and Natural Gas Corporation (ONGC) was trading in green, while Hindustan Petroleum Corporation (HPCL) was trading in red after the Cabinet gave an in-principle approval to sell the government’s entire 51.11% stake in HPCL to ONGC in a bid to create a state-run integrated oil major with a market value of $42 billion, that can compete with private and foreign players. Just Dial was trading on firm note as the company will consider buyback of its equity shares.

On the global front, Asian shares were trading mostly in green. The Bank of Japan kept monetary policy steady and pushed back again the timing for achieving its 2 percent inflation target, reinforcing expectations it will lag well behind major global central banks in dialing back its massive stimulus programme. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,900 and 9,850 levels respectively. The market breadth on BSE was positive in the ratio of 1183:1033, while 118 scrips remained unchanged.

The BSE Sensex is currently trading at 31974.67, up by 19.32 points or 0.06% after trading in a range of 31928.01 and 32057.12. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.12%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Realty up by 0.62%, Bankex up by 0.56%, Energy up by 0.30%, Capital Goods up by 0.29% and Power up by 0.21%, while IT down by 0.56%, Metal down by 0.45%, TECK down by 0.42%, Auto down by 0.32% and Healthcare down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.31%, ONGC up by 2.21%, Kotak Mahindra Bank up by 1.49%, Coal India up by 1.08% and Larsen & Toubro up by 0.57%.

On the flip side, Tata Steel down by 1.76%, Asian Paints down by 1.06%, Hero MotoCorp down by 1.00%, Infosys down by 0.95% and Sun Pharma down by 0.69% were the top losers.

Meanwhile, giving a sense of respite to the worried lot of traders after the GST rollout on July 1, 2017, the revenue authorities have said that they will go slow in undertaking enforcement actions under GST for the first six months, as they want industry to settle down into the new indirect tax regime.

Central Board of Excise and Customs (CBEC) Chairperson Vanaja Sarna stated that “she has specifically said that the first three to six months are a go-slow.... I don't want small cases to be made”. She further said CBEC has been hand-holding traders and businesses to make Goods and Services Tax (GST) a success and added that there will be genuine errors due to lack of understanding in the initial days.

CBEC had constituted 18 sectoral groups to look into various issues faced by different sections of industry. Of these, three groups have submitted their report. The CBEC Chairperson said that the law committee is examining the reports and also said that they won’t dismantle these working groups and they would assist the industry in the problems they face in the GST regime. Meanwhile, CBEC has also reiterated that the goods and services tax (GST) rates will not be revised unless there is an anomaly or the rates are unjustified.

The CNX Nifty is currently trading at 9897.10, down by 2.50 points or 0.03% after trading in a range of 9888.55 and 9922.55. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.92%, ONGC up by 2.33%, Ambuja Cement up by 2.04%, Kotak Mahindra Bank up by 1.62% and Coal India up by 1.20%.

On the flip side, Tata Steel down by 1.86%, Bharti Infratel down by 1.22%, Hero MotoCorp down by 1.10%, Infosys down by 1.06% and Asian Paints down by 1.04% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 7.09 points or 0.22% to 3,238.07, KOSPI Index increased 7.21 points or 0.3% to 2,437.15, Jakarta Composite increased 9.29 points or 0.16% to 5,815.98, Hang Seng increased 67.04 points or 0.25% to 26,739.20 and Nikkei 225 increased 123.54 points or 0.62% to 20,144.40.

On the other hand, Taiwan Weighted decreased 9.6 points or 0.09% to 10,496.50 and FTSE Bursa Malaysia KLCI decreased 2 points or 0.11% to 1,755.27.