Benchmarks trim losses; trade continues in red

Indian equity benchmarks trimmed some losses and continued to trade in red, for the fifth straight session following weak global cues, in the morning session on account of selling in front line blue chip counters. The rupee opened on a flat note against dollar against the previous close of 64.79 a dollar. Sentiments remained dampened as investors turned jittery on expectation of government to tinker its fiscal deficit target for FY18 by announcing an economic stimulus to revive the economy. Chief Economic Adviser (CEA) Arvind Subramanian has said that Indian economy continues to face multiple challenges and stressed on the need to tackle them on various fronts, such as exchange rate, public investments while maintaining macroeconomic stability. Separately, foreign investors remained in exit mode as they have pulled out nearly Rs 5,500 crore from stock markets so far this month due to geopolitical concerns and a tendency to take profit. The net outflow by Foreign Portfolio Investors (FPIs) follows withdrawal of Rs 12,770 crore from equities in August. Prior to that, they had pumped in over Rs 62,000 crore in the past six months. According to the latest depository data, the FPIs withdrew a net Rs 5,492 crore ($855 million) during September 1-22.

Investors took note that the southwest monsoon is expected to start withdrawing in a few days, ending the season with nearly normal, albeit unevenly distributed, rainfall. The India Meteorological Department (IMD) said that near-normal rainfall this season has helped the country’s kharif crops, which are grown in the monsoon season, but some parts of the country were flooded while 17% of the country received deficient showers. Metal stocks were under pressure as metal prices fell in global markets in response to North Korea tensions and S&P’s downgrade of China’s credit rating. Aviation stock like Jet airways, InterGlobe Aviation and SpiceJet were trading in red on report that new levies under GST are set to cause a cumulative burden of Rs 4,750 crore, thus increasing the cost of operations, which has the potential to make the airline industry sick. The new levies can potentially wipe off the profits earned by airlines. 

Traders were seen piling position in Utilities sector, while selling was witnessed in Basic Materials, Capital Goods and Industrials sector stocks. In scrip specific development, Coffee Day Enterprises tumbled on reports that the Income Tax Department raids on Cafe Coffee Day (CCD) retail chain since Thursday found Rs 650 crore concealed income from the documents seized. Shoppers Stop was trading firm after the company informed bourses that its board has approved a proposal to sell 5% equity in the company for Rs 179.25 crore to Amazon NV Holdings LLC, the investment arm of the world’s largest online retailer Amazon Inc.

On the global front, Asian markets were trading mostly in red. Japanese manufacturing activity expanded in September at the fastest pace in four months as domestic and export orders picked up, a preliminary private survey showed in a sign of strengthening demand. The Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 52.6 in September from a final 52.2 in August. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 31,800 and 9,900 levels respectively. The market breadth on BSE was negative in the ratio of 271:1953, while 90 scrips remained unchanged.

The BSE Sensex is currently trading at 31701.21, down by 221.23 points or 0.69% after trading in a range of 31573.32 and 32016.52. 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 1.78%, while Small cap index was down by 2.50%.

The only gaining sectoral index on the BSE was Utilities up by 0.02%, while Basic Materials down by 2.36%, Capital Goods down by 2.32%, Industrials down by 2.21%, Realty down by 2.21% and Metal down by 2.11% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.45%, Hindustan Unilever up by 1.08%, TCS up by 0.84%, ICICI Bank up by 0.31% and Reliance Industries up by 0.29%.

On the flip side, Adani Ports & Special Economic Zone down by 3.55%, Tata Steel down by 2.83%, Larsen & Toubro down by 2.62%, Lupin down by 2.17% and Axis Bank down by 2.02% were the top losers.

Meanwhile, amid the persistent issues with transition credit and GSTR-3B forms, Industry chamber the Confederation of Indian Industry (CII) has said that in view of certain pending issues, the deadline for filing Goods and Services Tax (GST) returns should be further extended by up to a couple of months. The industry body in a release said that this will stabilise the system. It said that the Ministry of Finance has taken cognisance of the initial glitches being faced in online filing of invoices and extended dates for GST returns, CII appreciates such support to the industry and is now requesting for further extension of the deadline to resolve certain system issues.

CII suggested that the form for availing transitional credit, called TRAN-1, allow downloads, preview details, and come with a feature to take print outs to ease reconciliation before submission. This request comes in the backdrop of government officials saying that a large part of the Rs 65,000 crore worth of transitional credits, so far claimed, was ineligible for refunds. It further suggested that GSTR-3B should have a provision for the rounding off of input tax credit to the nearest rupee.

In its other suggestions the industry body said that all modules of GSTN should be activated or enabled to amend core fields in registration to amend particulars of ‘principal place of business’ or to declare ‘additional place of business’ or file refunds.

The government had earlier this month announced a deadline extension for the filing of returns for July and August. The GSTR-1 form for July is to be submitted by September 10 instead of the September 5 decided earlier. The GSTR-2 form for July is to be filed by September 25 instead of September 10. The GSTR-3 form can now be filed by September 30.

The CNX Nifty is currently trading at 9885.10, down by 79.30 points or 0.80% after trading in a range of 9836.20 and 9960.50. There were 10 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 1.62%, Tata Power up by 1.31%, Hindustan Unilever up by 1.17%, Bharti Infratel up by 0.87% and TCS up by 0.83%.
On the flip side, Indiabulls Housing down by 4.42%, Adani Ports & Special Economic Zone down by 3.56%, Ambuja Cement down by 2.87%, Tata Steel down by 2.77% and ACC down by 2.70% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 271.17 points or 0.97% to 27,609.36, Taiwan Weighted decreased 101.98 points or 0.98% to 10,347.70, Shanghai Composite decreased 12.08 points or 0.36% to 3,340.44, KOSPI Index decreased 10.52 points or 0.44% to 2,378.19, Jakarta Composite decreased 9.87 points or 0.17% to 5,901.83 and FTSE Bursa Malaysia KLCI decreased 0.31 points or 0.02% to 1,770.73.

On the other hand, Nikkei 225 increased 95.33 points or 0.47% to 20,391.78.