Benchmarks end choppy day of trade with marginal losses

Indian equity benchmarks ended the lackluster day of trade marginally in red on Monday, with frontline gauges swinging between green and red for most part of the day. Market traded near neutral lines throughout the session amid lack of any major domestic cues, but selling in dying hour of trade mainly dragged the key gauges in red terrain. Traders opted to remain on sidelines on concerns that factors such as positive earnings and hopes of an improving economy were already factored into prices. Sentiments also remained dampened on ASSOCHAM’s report that with the external value of the Indian rupee superseding its internal strength despite lower inflation, the resultant mismatch and the continuing trend is hurting exporters, whose competitive edge gets directly hit with the declining value of the dollar against the domestic currency.

However, losses remained capped as traders took some solace with the government’s statement that rollout of goods and services tax (GST) by and large has been smooth and it has deployed a large number of senior officials to regularly review the working of the new indirect tax regime. Separately, after one month of the implementation of GST, the collections from customs duty and Integrated-GST (IGST) from imports has almost doubled to Rs 30,000 crore in July. The July collections compare to indirect tax collection of over Rs 16,000 crore of the same month of 2016. Some support also came with NITI Aayog Member Bibek Debroy’s statement that it is not reasonable to connect the GST regime with slowdown in manufacturing output as the issues that the sector is facing goes beyond the tax reform. He also said that these are very temporary things which they don’t need to worry about because it is a blip that will go away once the transition is complete.

On the global front, European counters were trading mostly in green despite global geopolitical tensions. Investors’ sentiments in the euro zone remained stable in August, buoyed by strong current conditions, but future expectations slumped amid growing concerns about the US economy and the potential impact of a widening car emissions scandal. Asian markets ended mostly in green, as markets welcomed harder sanctions on North Korea’s missile and nuclear programs, thought caution ruled with the reclusive country yet to respond.

Back home, stocks related to gold and jewellery sector remained buzzing, as the Finance Ministry turned down the Commerce Ministry’s pitch for a reduction in import duty on gold, citing improved data in respect of the current account deficit (CAD). On the earning front, Jaiprakash Associates gained around 15% to hit its 52-week high after the company reported standalone net profit of Rs 764.99 crore in the quarter ended June, on higher income and lower expenses incurred during the period. Shares of Britannia Industries surged around 5% to hit its lifetime high despite the FMCG major reported 1.41% year-on-year decline in its consolidated net profit for the quarter ended June 30, 2017. 

The NSE’s 50-share broadly followed index Nifty declined around ten points but managed to hold its psychological 10,050 support level, while Bombay Stock Exchange's Sensitive Index -- Sensex was down by over fifty points to end below its crucial 32,300 mark. The broader markets, however, outperformed benchmarks and ended the session with a gain of over a percent. The market breadth was in the favour of advances, as there were 1,561 shares on the gaining side against 1,036 shares on the losing side, while 203 shares remain unchanged.

Finally, the BSE Sensex declined 51.74 points or 0.16% to 32,273.67, while the CNX Nifty was down by 9.00 points or 0.09% to 10,057.40.

The BSE Sensex touched a high and a low of 32,396.14 and 32,235.82, respectively and there were 9 stocks on gaining side as against 22 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.06%, while Small cap index was up by 1.15%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.60%, PSU up by 1.40%, Realty up by 1.40%, Metal up by 1.15% and Consumer Durables up by 0.82%, while IT down by 0.94%, TECK down by 0.83% and Telecom was down by 0.14% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.26%, SBI up by 1.85%, Adani Ports & SEZ up by 1.59%, ICICI Bank up by 1.28% and Coal India up by 0.84%. On the flip side, Infosys down by 1.75%, Tata Motors - DVR down by 1.72%, NTPC down by 1.64%, Dr. Reddy’s Lab down by 1.51% and Mahindra & Mahindra down by 1.34% were the top losers.

Meanwhile, with a view to make mineral block auctions more effective, the Union Mines Ministry will bring out proposed draft changes to the Mineral Auction Rules, 2015 in the month of August. Mines Secretary Arun Kumar has said that the Ministry is looking to remove small glitches in the rules highlighted by bidders and industry associations.

Talking on the issue of environment clearance, Kumar said that the Ministry has given a 20-page suggestion on how the environment can be protected and how rules can be made to expedite the mining process. Therefore, with a view to streamline the procedure, they have given those suggestions and, they will be taking it up with the Ministry of Environment so that simplification and cutting down on delay should be passed on.

The secretary further said that captive definition will stay for the existing leases but for auctions the government will see how it can tweak the system legally to allow for a certain percentage of the minerals to be traded as well.  Meanwhile, so far 29 mineral blocks with an estimated total value of resources of Rs 1,56,746 crore have been auctioned in Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan.

The CNX Nifty traded in a range of 10,088.10 and 10,046.35. There were 19 stocks in green as against 32 stocks in red on the index.

The top gainers on Nifty were Tata Steel up by 4.20%, Indian Oil Corporation up by 2.92%, SBI up by 1.95%, BPCL up by 1.89% and Adani Ports & SEZ up by 1.87%. On the flip side, Bharti Infratel down by 2.14%, Tata Motors - DVR down by 1.82%, NTPC down by 1.64%, Infosys down by 1.58% and Dr. Reddy’s Lab down by 1.46% were the top losers.

European markets were trading mostly in green; France’s CAC gained 1.96 points or 0.04% to 5,205.40 and UK’s FTSE 100 was up by 5.84 points or 0.08% to 7,517.55, while Germany’s DAX was down by 64.76 points or 0.53% to 12,232.96.

Asian equity markets closed mostly higher on Monday after better-than-expected US jobs data generated optimism about growth in the world's largest economy, but spurred expectations that it could lead to a third rate rise this year in December by the Federal Reserve. US non-farm payroll employment surged up by 209,000 jobs in July after spiking by an upwardly revised 231,000 jobs in June. The jobless rate edged down to 4.3 percent from 4.4 percent in June. Investors also awaited Pyongyang's response after the UN Security Council unanimously approved tough new sanctions Saturday to punish North Korea for its escalating nuclear and missile programs. Japanese shares ended higher as the yen weakened on better-than-expected US jobs data and Toyota raised its earnings outlook. Chinese shares ended higher ahead of forex reserves, trade and inflation data due this week.