Benchmarks trim losses; trade continues in red

Indian equity benchmarks trimmed their losses but continued to trade below neutral line in morning session ahead of the key macro data of industrial production and the GST Council meeting outcome later in the day. The rupee opened down against dollar on account of buying of American currency by banks and exporters. Foreign Portfolio Investors stood net buyers in domestic equity markets on Thursday and bought shares worth Rs 5,987.49 crore with gross purchases and gross sales of Rs 12,524.10 crore and Rs 6,536.61 crore, respectively. Traders took note of Moody’s Investors Service report which in its latest Global Macroeconomic Update (2018-19) stated that India is the only G20 emerging market country where growth has slowed sharply for six consecutive quarters. But it expects economic growth in 2017 to average 6.2% before accelerating to around 7.5% in 2018 and 2019. It said that the slowdown in economy was due to the temporary negative impact of last year's demonetization, temporary disruption related to the rollout of the Goods and Service Tax (GST) and weak bank lending for investment-related activity due to a high proportion of delinquent loans on bank balance sheets.

Separately, the sentiments were dampened as the Congress-ruled states have sought a complete overhaul of the indirect tax regime with the highest slab at 18% instead of 28%. Investors were eyeing the GST Council meet where it may consider reducing items in the 28% tax slab and slash rates for daily use items, plastic products and hand-made furniture as it looks to provide relief to consumers. The council will also deliberate on the suggestions of GoM to cut tax rates for the composition scheme businesses to 1% and lower rates for non-AC restaurants. Realty sector stocks were buzzing in today’s trade as the government in its bid to give a fillip to the housing sector and push construction activities has announced that central government employees can get loans up to Rs 25 lakh from the government under the house building advance (HBA) scheme, which is more than three times of the earlier norm.

Traders were seen piling up position in Capital Goods, Realty and Consumer Durables stocks, while selling was witnessed in Energy, Metal and Auto sector stocks. In scrip specific development, Alok Industries was locked at upper circuit limit on report that Reliance Industries (RIL) may be looking at buying part of textile maker Alok Industries. The interest may be focused on the polyester yarn unit. Cadila Heathcare was trading in red on reports that two domestic drug makers including Zydus Cadila are under the scanner of the pharmaceutical regulator Central Drug Standards Control Organization (CDSCO) for allegedly launching a combination drug to treat hypertension without mandatory prior approval.

On the global front, Asian markets were trading mostly in red. Japan’s economy was expected have grown for a seventh straight quarter in July-September, a period of unbroken expansion last seen between 1999 and 2001. The poll showed that gross domestic product (GDP) is expected to have grown at an annualized rate of 1.3% in the third quarter. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,300 and 10,350 levels respectively. The market breadth on BSE was positive in the ratio of 1223:982, while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 33227.83, down by 23.10 points or 0.07% after trading in a range of 33135.94 and 33254.00. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.60%, Realty up by 1.26%, Consumer Durables up by 0.90%, FMCG up by 0.54% and Utilities up by 0.43%, while Energy down by 0.88%, Metal down by 0.67%, Auto down by 0.51%, IT down by 0.42% and Healthcare down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.71%, ITC up by 1.42%, SBI up by 1.12%, ONGC up by 1.06% and Lupin up by 0.95%.

On the flip side, Asian Paints down by 2.28%, Tata Motors down by 2.23%, Tata Motors - DVR down by 1.24%, Adani Ports & Special Economic Zone down by 1.20% and Coal India down by 1.17% were the top losers.

Meanwhile, the government in its bid to give a fillip to the housing sector and push construction activities has announced that central government employees can get loans up to Rs 25 lakh from the government under the house building advance (HBA) scheme, which is more than three times of the earlier norm.

As per the release from the Housing and Urban Affairs Ministry, which makes rules for HBA for central government employees from time to time,the central government employees can take advance upto Rs 25 lakhs for construction or purchase of house at a simple interest rate of 8.50 per cent, earlier, the maximum borrowing limit was Rs 7.50 lakh with interest rate slabs ranging from 6 per cent to 9.50 per cent. The employee can borrow upto 34 months of the basic pay subject to a maximum of Rs 25 lakhs, or cost of the house/flat, or the amount according to repaying capacity, whichever is the least for new construction/purchase of new house/flat.

The amount for expansion of the house has also been revised to a maximum of Rs 10 lakh against the earlier Rs 1.80 lakh. The cost ceiling limit of the house which an employee can construct/purchase has also been revised to Rs 1 crore with a provision of upward revision of 25 per cent. The earlier cost ceiling limit was Rs 30 lakh. Also, now both spouses, if they are central government employees, are eligible to take HBA either jointly, or separately, earlier, only one spouse was eligible for such facility. The methodology of recovery of the HBA will continue as per the existing pattern-- recovery of principal first in the first 15 years in 180 monthly installments, and interest thereafter in next five years in 60 monthly installments.

The CNX Nifty is currently trading at 10305.40, down by 3.55 points or 0.03% after trading in a range of 10270.00 and 10305.45. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.13%, GAIL India up by 2.21%, Ultratech Cement up by 2.10%, ITC up by 1.54% and SBI up by 1.32%.

On the flip side, Aurobindo Pharma down by 2.65%, Asian Paints down by 2.24%, Tata Motors down by 2.24%, BPCL down by 1.67% and HPCL down by 1.66% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 193.14 points or 0.84% to 22,675.57, Jakarta Composite decreased 15.99 points or 0.26% to 6,026.47, Taiwan Weighted decreased 9.9 points or 0.09% to 10,733.37, KOSPI Index decreased 4.92 points or 0.19% to 2,545.65 and FTSE Bursa Malaysia KLCI decreased 0.06 points or 0% to 1,746.75.

On the other hand, Shanghai Composite increased 1 point or 0.03% to 3,428.80 and Hang Seng increased 88.01 points or 0.3% to 29,224.58.