Benchmarks extend losses; Nifty holds 9,800 mark

Indian equity benchmarks extended their losses in the morning session on account of selling in front line blue chip counters. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets on Tuesday and sold shares worth Rs 1180.62 crore with gross purchases and gross sales of Rs 5521.81 crore and Rs 6702.43 crore, respectively. Traders were cautious after collections under the Goods and Services Tax (GST), the single indirect tax regime introduced for all of India on July 1 this year, dropped marginally to Rs 90,669 crore for August from the revised figure of Rs 94,063 crore for July. The collections for July were pegged at Rs 92,283 crore earlier. Of the total collections, the share of Central GST (CGST) stood at Rs 14,402 crore, State GST (SGST) at Rs 21,067 crore and Integrated GST (IGST) at Rs 47,377 crore. Separately, rating agency ICRA in its report enlighten that petrol and diesel prices have jumped 8% since daily price revision was implemented in mid-June, warning that a sustained price hike can hit demand growth and create inflationary pressures. The report added that the rise in fuel rates can be attributed to a 14% increase in international petrol and diesel prices beside rise in commission paid to petrol pump dealers.

Investors took note of foreign brokerage report that the fiscal stress is more a result of excess spending thus far, which has not left much room for spending in the remaining months: it can rise only 1.5% y-o-y in August-March versus 23.1% in April-July to meet the FY18 budgeted spending target. Separately, Asian Development Bank (ADB) expects RBI to go for another round of rate cut in the latter part of 2017-18 in view of sluggish economic activities but does not see possibility of any major fiscal stimulus. Telecom stocks Bharti Airtel, Idea Cellular and Reliance Communications were trading in red after the telecom regulator rejected a request by operators for an additional six months to implement a new penalty regime for call drops, which is set to kick in from October 1. In new rules issued on August 18, TRAI set penalties of up to Rs 10 lakh per circle in a quarter on operators failing to meet voice quality benchmarks.

Pharma stocks were under pressure after India Ratings and Research, a rating firm of Fitch Group highlighted that Indian pharma exporters’ road to recovery might still take time as weak economic and political conditions in Africa and currency volatility in Latin America (LATAM) are likely to weigh on the consumption of pharmaceutical formulations. This fluctuation is expected to put pressure on the medium term growth prospects for India’s exporters. The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2017 series to next month i.e. October 2017 series. The near month September 2017 derivatives contracts will expire on Thursday i.e. September 28, 2017.

Traders were seen piling position in Consumer Durables, Realty and Utilities stocks, while selling was witnessed in Metal, Healthcare and Capital Goods sector stocks. In scrip specific development, ICICI Lombard General Insurance Company was trading slightly in green after making a tepid debut on the exchange at a discount to its issue price of Rs 661 per share. The Initial Public Offer (IPO), the first by any general insurance company, was sold in at Rs 651-661 price band during September 15-19. DEN Networks was trading firm on the buzz that Mukesh Ambani-owned Reliance Industries is said to be in talks to acquire Sameer Manchanda promoted multi-system operator (MSO), DEN Networks.

On the global front, Asian markets were trading mostly in red. Profits at China’s industrial companies rose the most in four years in August as commodities prices surged, thanks to a government-backed construction boom that is helping Beijing trim high levels of corporate debt without tripping up the economy. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 31,500 and 9,850 levels respectively. The market breadth on BSE was negative in the ratio of 911:1151, while 100 scrips remained unchanged.

The BSE Sensex is currently trading at 31431.10, down by 168.66 points or 0.53% after trading in a range of 31396.50 and 31797.46. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.57%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.27%, Realty up by 0.20%, Utilities up by 0.11% and IT up by 0.07%, while Metal down by 1.35%, Healthcare down by 1.34%, Capital Goods down by 0.97%, Bankex down by 0.77% and Industrials down by 0.75% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.26%, Power Grid up by 0.59%, ITC up by 0.42% and Maruti Suzuki up by 0.18%.

On the flip side, Sun Pharma down by 2.86%, Hindustan Unilever down by 2.14%, Adani Ports & Special Economic Zone down by 2.09%, Axis Bank down by 1.61% and ICICI Bank down by 1.49% were the top losers.

Meanwhile, ending the euphoria of better than expected goods and services tax (GST) collection in the last month, the collections under the GST in August slowed down by 3.6 percent to Rs 90,669 crore, than the revised mop-up of Rs 94,063 crore in July.  Of the total tax collected, Rs 14,402 crore have come in as Central GST, Rs 21,067 crore as State GST and Rs 47,377 crore as Integrated GST, which is levied on inter-state movement of goods and imports and Rs 7,823 crore as compensation cess.

A finance ministry statement said that the total revenue of GST paid under different heads (up to 25th September, 2017) is Rs 90,669 crore. A total of 68.2 lakh tax payers were required to file returns for August 2017, of which, as on 25th September, 37.63 lakh have filed GSTR 3B returns. Only 55 per cent of assessees paid taxes for August, compared to 64 per cent for July.

The data however, revealed that there were segments where collections had soared, such as through compensation cess, which is levied on tobacco products, pan masala and automobiles. There was a pickup in demand for large cars, especially SUVs, as the government had planned to increase the cess on these vehicles. Additionally, there are still a number of assessees who have not filed their return either for July or August, 2017. The current tax collection figures do not include the GST to be paid by 10.24 lakh such assesses.

Earlier, the government had extended the last dates for filing GSTR 1, 2 and 3 returns for July to October 10, 31and November 10, respectively, following technical glitches at Goods and Services Tax Network (GSTN), the company that manages the GST IT system.

The CNX Nifty is currently trading at 9817.80, down by 53.70 points or 0.54% after trading in a range of 9804.80 and 9921.05. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 1.84%, GAIL India up by 1.65%, TCS up by 1.31%, Indian Oil Corporation up by 1.14% and Bharti Infratel up by 0.85%.

On the flip side, Sun Pharma down by 2.93%, Indiabulls Housing down by 2.33%, Adani Ports & Special Economic Zone down by 2.29%, Hindustan Unilever down by 2.16% and Axis Bank down by 1.94% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 56 points or 0.28% to 20,274.19, Jakarta Composite decreased 4.03 points or 0.07% to 5,859.93, FTSE Bursa Malaysia KLCI decreased 2.14 points or 0.12% to 1,763.45 and KOSPI Index decreased 0.97 points or 0.04% to 2,373.35.

On the other hand, Shanghai Composite increased 1.43 points or 0.04% to 3,345.01, Taiwan Weighted increased 81.92 points or 0.8% to 10,338.94 and Hang Seng increased 125.09 points or 0.45% to 27,638.10.