Weak trade persist in morning session

Indian equity benchmarks continued their weak trade in the morning trade on account of selling in blue chip counters. Sentiment remained downbeat due to sustained capital outflows by foreign funds and retail investors on the domestic bourses. The rupee opened lower against dollar on account of buying of American currency by banks and importers. Foreign Portfolio Investors stood net buyers in domestic equity markets on Wednesday and bought shares worth Rs 1,898.02 crore with gross purchases and gross sales of Rs 6,587.22 crore and Rs 4,689.20 crore, respectively. The sentiments were under pressure on account of global cues as tensions between North Korea and the US added a dollop of geopolitical uncertainty to markets. In the latest escalation of tensions between Washington and Pyongyang, the isolated Asian country threatened a missile strike at US territory Guam. That saber-rattling came a day after US President Donald Trump said he would respond with fire and fury like the world has never seen if the country doesn’t halt its threats. The street took note that India’s agricultural exports have declined to $33.87 billion in 2016-17 from $43.23 billion in 2013-14.  The primary reasons for decline in export of agricultural commodities are low commodity prices in the international market, which has made exports uncompetitive.

Traders failed to get any sense of relief with report that direct tax collections jumped 19% in the first four months of the current fiscal as demonetization of higher denomination currency brought in more number of individuals in tax net. Collections of direct taxes, which are made up of personal and corporate taxes, soared to Rs 1.90 lakh crore in April-July. Traders were seen piling up position in IT and TECK stocks, while selling was witnessed in Industrials, Auto and Power sector stocks. In scrip specific development, Hindustan Construction Company (HCC) was trading in green after the company bagged contract worth Rs 810.37 crore by Jammu & Kashmir State Power Development Corporation (JKSPDCL). The contract is for construction of the 93 MW (3x31 MW) New Ganderbal Hydro Power Project on Sind River in Central Kashmir on EPC basis.

On the global front, Asian markets were trading in red, as investors fretted on lingering North Korea tensions, sending Seoul shares skidding to two-month lows even as the previous day’s rush into safe-haven assets appeared to slow. Japan’s core machinery orders unexpectedly fell for a third consecutive month in June, underscoring companies’ reluctance to boost spending and conflicting with recent signs that the economic recovery is gathering momentum. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 31,700 and 9,900 levels respectively. The market breadth on BSE was negative in the ratio of 466:1655, while 77 scrips remained unchanged.

The BSE Sensex is currently trading at 31653.32, down by 144.52 points or 0.45% after trading in a range of 31588.26 and 31756.27. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.12%, while Small cap index was down by 1.37%.

The top gaining sectoral indices on the BSE were IT up by 0.40% and TECK up by 0.26%, while Industrials down by 2.01%, Auto down by 2.01%, Power down by 1.43%, Utilities down by 1.42% and Metal down by 1.40% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.50%, Lupin up by 1.19%, Infosys up by 1.05%, HDFC up by 0.74% and Sun Pharma up by 0.68%.

On the flip side, Tata Motors - DVR down by 7.10%, Tata Motors down by 6.90%, ONGC down by 1.72%, ICICI Bank down by 1.44% and Adani Ports & Special Economic Zone down by 1.32% were the top losers.

Meanwhile, the government has notified the timeline for furnishing final tax returns for July and August under the Goods and Services Tax (GST) regime. As per the notification, outward supplies in Form GSTR-1 for the month of July will have to be filed between September 1-5, while for August, it is to be filed between September 16-20. The original date for filing GSTR-1 was 10th of the next month.

Also, the details of inward supplies in Form GSTR-2 for July will have to be filed between September 6-10, while for August, the date is September 21-25. The original date for filing of GSTR-2 was 15th of the next month.

As per the notification, the Form GSTR-3 for July will now have to be filed between September 11-15 and for August the date is September 26-30. The original date for filing GSTR-3, which is the monthly return on the basis of finalisation of details of outward supplies and inward supplies along with the payment of amount of tax, was 20th of the next month.

Earlier, the GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, had in June allowed businesses extended timeline for filing final GST returns in forms GSTR-1, GSTR-2 and GSTR-3 for July and August. In the interim period, businesses had to file GSTR-3B, a summary of self-assessed tax liabilities with consolidated details of outward supplies and input credit. For it the GST Network portal has started the facility for filing of July returns from August 5. The last date for filing the GSTR-3B for July 2017 is August 20, while the same for the month of August 2017 is September 20.

The CNX Nifty is currently trading at 9856.85, down by 51.20 points or 0.52% after trading in a range of 9835.95 and 9879.20. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.73%, Aurobindo Pharma up by 2.66%, Dr. Reddy’s Lab up by 1.31%, Lupin up by 1.15% and Infosys up by 1.10%.

On the flip side, Tata Motors - DVR down by 7.35%, Tata Motors down by 6.65%, Eicher Motors down by 4.03%, BPCL down by 3.50% and Vedanta down by 2.07% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 343.96 points or 1.24% to 27,413.13, Taiwan Weighted decreased 150.43 points or 1.44% to 10,319.95, Shanghai Composite decreased 31.12 points or 0.95% to 3,244.46, Nikkei 225 decreased 20.57 points or 0.1% to 19,718.14, KOSPI Index decreased 7.65 points or 0.32% to 2,360.74, Jakarta Composite decreased 3.61 points or 0.06% to 5,820.39 and FTSE Bursa Malaysia KLCI decreased 1.17 points or 0.07% to 1,776.77.