Benchmarks make cautious start ahead of Diwali

Indian equity benchmarks have made a cautious start and are trading marginally lower in early deals, as traders remained on sidelines ahead of long Diwali weekend, as the markets will be closed on Thursday and Friday for Diwali, with Thursday just having one hour of Muhurat trading. However, losses remained capped as some solace came from statement of Surjit Bhalla, a member of the Prime Minister’s Economic Advisory Council that the government is likely to stick to its fiscal deficit target of 3.2 per cent of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalise banks.

Global cues remained sluggish with Asian markets trading mostly in red at this point of time as cautiousness crept in after China’s President Xi Jinping spoke at the opening of the Communist Party Congress, with investors assessing the magnitude of recent gains in global equities. The US markets moved further high in the last session in a choppy day of trade and Dow and the S&P 500 reached new record closing highs.

Back home, the export oriented stocks remained buzzing, as the Centre is considering an incentive package of over Rs16,000 crore to boost exports in view of sluggish domestic demand and competition in export markets. Steel stocks were trading mixed, as the Ministry of Finance imposed an anti-dumping duty on steel to cover colour-coated or pre-painted flat products of alloy or non-alloy steel. Meanwhile, non-banking financial company MAS Financial Services have made a stellar debut on bourses and are trading with a gain of over 40%.

The BSE Sensex is currently trading at 32518.37, down by 90.79 points or 0.28% after trading in a range of 32480.19 and 32557.40. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.10%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Energy up by 1.09%, Oil & Gas up by 0.90%, Utilities up by 0.50%, Realty up by 0.47% and Power up by 0.33%, while Telecom down by 1.58%, Bankex down by 1.31%, TECK down by 0.59%, Healthcare down by 0.52% and Consumer Durables down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.66%, Kotak Mahindra Bank up by 1.30%, Power Grid up by 1.22%, ONGC up by 1.14% and Wipro up by 1.05%. On the flip side, Axis Bank down by 6.72%, ICICI Bank down by 2.87%, Cipla down by 1.95%, SBI down by 1.93% and Bharti Airtel down by 1.29% were the top losers.

Meanwhile, Almost three months after roll out of new indirect tax regime, Revenue Secretary Hasmukh Adhia has said that the Goods and Services Tax (GST) compliance is still low. He added that a clear trend about revenue collections is likely to emerge only after three-four months, once integrated GST (IGST) is converted into Central GST and State GST, as GST revenue includes IGST revenue. He also said that compliance will fall further if penalty for late filing of returns is dropped.

Adhia has said that 10 lakh returns had been filed until October 16, for September. However, he noted that in the last 40-45 days, the issues cropping up in the new indirect tax regime had come down. He further said that the government was working on improving the ease of doing business under GST and the Group of Ministers is still looking at issues related to Composition Scheme.

The Revenue Secretary also said that there was a need to rationalise items under the 28 percent tax slab, which would be done over a period of time. He also said that Fitment Committee will periodically check if rate revisions are required, warranted. Ruling out doing away with the reverse charge mechanism and e-way bill, he said that it would mean returning to the old system of taxation.

The CNX Nifty is currently trading at 10200.75, down by 33.70 points or 0.33% after trading in a range of 10189.70 and 10211.85. There were 18 stocks advancing against 31 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Reliance Industries up by 1.64%, Kotak Mahindra Bank up by 1.20%, ONGC up by 1.20%, Power Grid up by 1.17% and Indiabulls Housing up by 1.08%. On the flip side, Axis Bank down by 6.95%, Bharti Infratel down by 3.10%, ICICI Bank down by 2.85%, Cipla down by 2.26% and Zee Entertainment down by 2.21% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite decreased 25.33 points or 0.43% to 5,922.00, Taiwan Weighted slipped 17.05 points or 0.16% to 10,706.10, KOSPI Index dipped 3.56 points or 0.14% to 2,480.81 and Hang Seng was down by 1.2 points to 28,696.29.

On the flip side, Nikkei 225 increased 4.9 points or 0.02% to 21,341.02 and Shanghai Composite was up by 9.23 points or 0.27% to 3,381.27.