Benchmarks make pessimistic start; Nifty breaches 10,050 mark

Indian equity benchmarks have made a pessimistic start and are trading in red in early deals on Thursday, with frontline gauges breaching their crucial 10,050 (Nifty) and 32,400 (Sensex) levels amid soft global cues. Traders remained on sidelines pondering rate outlook, a day after the RBI maintained its neutral stance, citing record low inflation. Most of the market participants are not expecting any further rate cut this year, saying the present low inflation print is not sustainable. Market participants shrugged off Finance Minister Arun Jaitley’s indications that there could be scope for rationalisation of rates under the Goods and Services Tax (GST) as its implementation progresses. Jaitley also said that he was under pressure to change the GST Network which people said was faulty but felt the structure was correct.

Cues from the regional peers remained somber with most of the Asian markets trading in red terrain at this point of time, with investors assessing the strength of company earnings before American labor-market data provides the latest clues on the health of global growth. The Japanese market too was down as the yen rose against the dollar. However, the US markets made mostly a positive close in the last session.

Back home, stocks related to telecom sector ringing louder on report that the government may soon consider the telecom industry’s demand of doing away with telecom circles and will work towards the concept of one nation, one network and one licence. Meanwhile, the market breadth indicating the overall health of the market was weak, with 791 shares gaining and 1056 shares declining, while a total of 83 shares were unchanged.

The BSE Sensex is currently trading at 32323.16, down by 153.58 points or 0.47% after trading in a range of 32318.92 and 32502.55. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.09%, while Small cap index was down by 0.32%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.04%, Energy up by 0.54%, Healthcare up by 0.42%, Telecom up by 0.30% and Consumer Durables was up by 0.08%, while Bankex down by 1.06%, Capital Goods down by 0.37%, Metal down by 0.37%, Industrials down by 0.37% and Power was down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 1.46%, TCS up by 0.86%, Cipla up by 0.80%, Bharti Airtel up by 0.46% and Hindustan Unilever up by 0.27%. On the flip side, SBI down by 1.35%, Axis Bank down by 1.29%, HDFC down by 1.21%, ICICI Bank down by 1.01% and Adani Ports down by 0.90% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has indicated that there could be scope for rationalisation of rates under the Goods and Services Tax (GST), as its implementation progresses. Jaitley said that “I do concede that as it (GST) moves forward, there will be scope for rationalising the rates. There, probably, will be scope that the two standard rates of 12% and 18 per cent, after some time, could be clubbed into one. That is a fair possibility and a suggestion.”

Further delving into criticism over several slabs in the GST rates, the finance minister said there cannot be a single slab in a country like India which has a large population below poverty line (BPL). Jaitley said if the two rates had been merged into one its inflationary effect would have been high.  The current GST has 5 per cent, 12 per cent, 18 per cent and 28 per cent rates, plus one for luxury and sin goods. There are some that are zero rated, or nil rate.

He also said that he was under pressure to change the GST Network which people said was faulty but felt the structure was correct. He added that technically GSTN is not a government company but its board has government majority and therefore, no decision can be taken without the consent of the government nominee. The company is also open to audit by the CAG. Jaitley said that the government had 49% stake in GSTN and the rest was in responsible hands such as HDFC and LIC. He said the government would raise its stakes later to 51%.

The CNX Nifty is currently trading at 10040.15, down by 41.35 points or 0.41% after trading in a range of 10039.75 and 10081.15. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 3.92%, Lupin up by 1.36%, BPCL up by 1.31%, Aurobindo Pharma up by 1.17% and GAIL India up by 0.81%. On the flip side, Yes Bank down by 1.80%, Bank of Baroda down by 1.29%, Axis Bank down by 1.27%, SBI down by 1.20% and Kotak Mahindra Bank down by 1.15% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 58.34 points or 0.55% to 10,460.93, Hang Seng slipped 40.58 points or 0.15% to 27,566.80, Nikkei 225 dropped 38.61 points or 0.19% to 20,041.43, KOSPI Index declined 36.47 points or 1.5% to 2,391.16, Jakarta Composite shed 21.73 points or 0.37% to 5,802.52 and Shanghai Composite was down by 7.87 points or 0.24% to 3,277.19.

On the flip side, FTSE Bursa Malaysia KLCI was up by 0.46 points or 0.03% to 1,771.07.