Bears continue to dominate Dalal Street

Following weak opening in European markets, Indian equities continued to trade in negative terrain in late afternoon session, on the back of sustained selling in Realty, Energy, PSU and Oil & Gas counters. An unexpected regulatory order to the bourses to initiate action against 331 suspected shell companies that are listed and these scrips will not be available for trading this month, raised concerns among the investors. Sentiments also remained down beat with a private report stating 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.

On the global front, European markets were trading in red, as investors focused on a new round of earnings reports and as lower-than-expected exports and imports figures in China weighed. However, Asian markets were trading in green. Back home, in scrip specific development, Bajaj Auto was trading higher on inking global partnership pact with Triumph motorcycles. The objective of this non-equity partnership is to deliver a range of outstanding mid-capacity motorcycles benefiting from the collective strengths of both companies.

The BSE Sensex is currently trading at 32049.34, down by 224.33 points or 0.70% after trading in a range of 31915.20 and 32354.77. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.76%, while Small cap index was down by 0.92%.

The only gaining sectoral indices on the BSE were Metal up by 2.24% and Basic Materials up by 0.65%, while Realty down by 2.79%, Oil & Gas down by 1.88%, PSU down by 1.80%, Energy down by 1.60% and Power down by 1.42% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.33%, Bajaj Auto up by 1.67%, Cipla up by 1.34%, Adani Ports & SEZ up by 0.57% and Hindustan Unilever up by 0.54%. On the flip side, Dr. Reddy’s Lab down by 3.68%, SBI down by 2.52%, Coal India down by 2.31%, ITC down by 1.75% and ICICI Bank down by 1.67% were the top losers.

Meanwhile, welcoming the Goods and Services Tax (GST) council’s move to reduce the rate for all job works in textile sector from 18% to 5%, the Confederation of Indian Textile Industry (CITI) has described the move as a big breather to small job work manufacturers in all segments of textile value chain and added that it would facilitate the free flow of business across the value chain.

CITI further said that with this relief, the textile industry can claim full input credit and it would also avoid any inverted duty and strengthen the global competitiveness of the textile sector apart from benefiting the domestic consumers. However, the industry body expressed disappointment on the postponement of reduction of GST rate for manmade fibre and synthetics from 18% to 12%.

At the same time, CITI expressed a need of some safeguard measures for the industry in order to ensure the Make in India initiative does not wash away in the avalanche of imports, noting that imports are now cheaper than domestic products as the countervailing duty (CVD) and special additional duty (SAD) on imports have become Integrated GST. The GST Council, headed by Finance Minister Arun Jaitley comprising representatives from all states, last week decided to tax all job works in the textile sector at 5 per cent.

The CNX Nifty is currently trading at 9988.30, down by 69.10 points or 0.69% 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 Vedanta up by 4.28%, Hindalco up by 4.09%, Tata Steel up by 3.32%, Bajaj Auto up by 1.51% and GAIL India up by 1.48%. On the flip side, Indian Oil Corp. down by 4.41%, BPCL down by 4.21%, Dr. Reddy’s Lab down by 3.86%, Bharti Infratel down by 2.99% and SBI down by 2.57% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 2.42 points or 0.07% to 3,281.87, FTSE Bursa Malaysia KLCI increased 3.75 points or 0.21% to 1,781.66, Jakarta Composite increased 38.01 points or 0.66% to 5,787.30 and Hang Seng increased 164.55 points or 0.59% to 27,854.91. On the flip side, Nikkei 225 decreased 59.88 points or 0.3% to 19,996.01, Taiwan Weighted decreased 10.41 points or 0.1% to 10,568.97 and KOSPI Index decreased 4.02 points or 0.17% to 2,394.73.

European markets were trading in red; UK’s FTSE 100 decreased 10.49 points or 0.14% to 7,521.45, France’s CAC decreased 8.53 points or 0.16% to 5,199.36 and Germany’s DAX decreased 6.77 points or 0.06% to 12,250.40.