Markets continue to trade lower; Realty stocks continue to fall

Indian equity benchmarks continued to show a sluggish trend in the afternoon session, due to selling pressure in realty, oil & gas and PSU counters. Sentiments remained down-beat with the private report stating that it suspects that there has been a change in the stance by the authorities to let the rupee appreciate more, but warned that it can hurt manufacturing and exports. Traders failed to get any sense of relief  with Central Board of Direct Taxes’ (CBDT) report of a 25 percent increase in the number of Income Tax Returns (ITRs) filed in the current fiscal, on the backdrop of economic reform, including demonetisation and the Income Tax Department’s (ITD) Operation Clean Money. Moreover, weak trend in Asian markets after Chinese exports and imports figures came in below expectations, too dampened investors’ sentiments. In scrip specific development, Ratnamani Metals & Tubes was trading in green after bagging new domestic order of 80,000 MT for supply of Carbon Steel Coated Pipes. The said order is expected to be completed in next 12 months.

On the global front, Asian markets were trading mostly in red, as disappointing Chinese trade data clouded an otherwise bright outlook for global growth, leaving currencies and commodities becalmed in summer doldrums. Back home, the BSE Sensex is currently trading at 32098.74, down by 174.93 points or 0.54% after trading in a range of 31915.20 and 32354.77. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.61%, while Small cap index was down by 0.73%.

The only gaining sectoral indices on the BSE were Metal up by 2.31% and Basic Materials up by 0.78%, while Realty down by 1.84%, Oil & Gas down by 1.62%, PSU down by 1.47%, Energy down by 1.39% and Bankex down by 1.00% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.86%, Hindustan Unilever up by 1.09%, Bajaj Auto up by 0.95%, Cipla up by 0.50% and Mahindra & Mahindra up by 0.48%. On the flip side, Coal India down by 2.88%, SBI down by 1.88%, Dr. Reddy’s Lab down by 1.84%, ITC down by 1.39% and NTPC down by 1.32% were the top losers.

Meanwhile, the trade body Engineering Export Promotion Council (EEPC) of India has said that exporters are experiencing severe difficulties post Goods and Services Tax (GST) regime as their drawback refunds will not be released till September-end or October. According to the exporters’ body, as supplies of goods to the export-oriented units (EOUs) from the domestic tariff area (DTA) are not considered as deemed exports under the new tax regime, shippers are not allowed to import the inputs without payment of duty under ‘Advance Authorisation’ scheme of the government.

Moreover, it noted that exporters will have to pay the basic customs duty, cesses and IGST for imported inputs to be used for supplies to EoU. It also said that they are entitled to input tax credit of only IGST. It also noted that basic customs duty and cesses are thereon a cost to exporters.

EEPC India Chairman T S Bhasin further said that several schemes introduced by the commerce ministry for giving a boost to exporters have been turned upside down and their functioning has become extremely difficult or not viable. He also stated that exports of engineering goods constitute the biggest share in India's overall export basket and are therefore, vital for job creation, mainly in the Small and Medium Enterprises (SME) segment.

The CNX Nifty is currently trading at 10009.25, down by 48.15 points or 0.48% after trading in a range of 9947.00 and 10083.80. There were 14 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 5.01%, Vedanta up by 4.01%, Tata Steel up by 3.80%, Aurobindo Pharma up by 1.48% and Hindustan Unilever up by 1.16%. On the flip side, Bharti Infratel down by 3.25%, BPCL down by 2.95%, Coal India down by 2.92%, Indian Oil Corp. down by 2.77% and Dr. Reddy’s Lab down by 1.93% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 59.88 points or 0.3% to 19,996.01, Taiwan Weighted was down by 10.41 points or 0.1% to 10,568.97, Shanghai Composite shed 5.85 points or 0.18% to 3,273.61 and KOSPI Index dipped 4.02 points or 0.17% to 2,394.73.

On the flip side, FTSE Bursa Malaysia KLCI increased 0.52 points or 0.03% to 1,778.43, Jakarta Composite was up by 32.61 points or 0.57% to 5,781.90 and Hang Seng added 112.47 points or 0.41% to 27,802.83.