Benchmarks slip in red; Nifty breaches 10,300 mark

Indian equity benchmarks made a positive start but slipped into red terrain with frontline gauges breaching their crucial 10,300 (Nifty) and 33,300 (Sensex) levels, as traders stayed away of risky assets, keeping an eye on the ongoing tensions in the West Asia, and the Q2 results lined up for the day. Sentiments also remained down-beat after industrial output growth fell to 3.8 percent during the month of September from a revised 4.5 percent rise in August. The slowdown was mainly due to subdued performance of the manufacturing sector, coupled with contraction in output of consumer durables. However, losses remained capped as traders took some solace with firmness in GST related stocks whose rates were tinkered at GST Council’s 23rd meeting in Guwahati. The Council decided to reduce the tax rate on 178 of the current 228 items from 28% to 18%, with effect from November 15.

On the global front, Asian markets were exhibiting mixed trend at this point of time, as investors seemed seeking fresh catalysts after last week’s run to record highs. Japanese market was down ahead of its October PPI. The US markets made a mixed closing in the last session, as traders continued to digest the details of the Senate Republican version of tax reform legislation.

Back home, public sector banking stocks remained on buyers’ radar, as Finance Minister Arun Jaitley said that the government has decided to inject more capital into state-owned banks to strengthen the banking system and spur economic growth. However, steel stocks failed to get any support with report that export of total finished steel saw an annual jump of 45 per cent to 0.778 million tonnes during October 2017. The overall exports of finished steel stood at 0.537 million tonnes in the same month last year.

The BSE Sensex is currently trading at 33278.07, down by 36.49 points or 0.11% after trading in a range of 33231.14 and 33417.30. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.04%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were IT up by 0.80%, Bankex up by 0.52%, TECK up by 0.42%, Consumer Disc up by 0.39% and Auto was up by 0.34%, while Capital Goods down by 2.02%, Realty down by 1.87%, Oil & Gas down by 1.22%, Telecom down by 0.96% and Industrials was down by 0.87% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.03%, Mahindra & Mahindra up by 2.10%, Axis Bank up by 1.93%, TCS up by 1.73% and Hindustan Unilever up by 1.21%. On the flip side, Larsen & Toubro down by 3.41%, Coal India down by 3.18%, ONGC down by 2.46%, Adani Ports down by 1.88% and HDFC down by 1.51% were the top losers.

Meanwhile, the Goods and Services Tax (GST)) Council, in its 23rd meeting decided to cut rates across the board, including for a range of daily items of consumption, relaxed penalties and tweaked rules to make it easier for businesses, especially small and medium enterprises, to comply. In a major relief to consumers and businesses, the Council slashed the tax rate on 178 items from 28% to 18%. Only 50 items have been left in the 28% bracket that include products in luxury and sin goods category and some with large revenue implications such as tobacco products, automobile, washing machine and air-conditioners, while the slab had 228 items earlier.

The package from the council, which comes into effect from 15 November, is likely to boost consumer demand, reduce disquiet over compliance costs and also lend fresh momentum to the tax reform initiative. The tax rate was reduced on a range of goods, from granite and marble to chewing gum and chocolates, deodorants and detergents. In other relief measures, the council also decided to bring more units within the scope of a special tax payment window for small and medium enterprises (SMEs) called the composition scheme and halved the tax rate allowed under it to 1%. The eligibility threshold for the scheme too has been raised to Rs 1.5 crore from Rs 1 crore now.

The council sought to tackle two major factors that gave GST a bad name-the practice of restaurants not passing on to consumers the benefit of tax rebates that they got in the new system and the rigours of compliance that big and small businesses faced. Accordingly, the GST rate on restaurants has been slashed to 5% for all restaurants without the input tax credit (ITC). The rate for restaurants in starred hotel, which charge Rs 7,500 or more, will remain 18%. Outdoor catering will be taxed at 18% along with ITC.

The CNX Nifty is currently trading at 10298.30, down by 23.45 points or 0.23% after trading in a range of 10281.95 and 10334.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.92%, Mahindra & Mahindra up by 2.15%, Axis Bank up by 1.84%, Tech Mahindra up by 1.77% and TCS up by 1.67%. On the flip side, Larsen & Toubro down by 3.40%, Coal India down by 3.18%, BPCL down by 3.14%, Aurobindo Pharma down by 2.91% and ONGC down by 2.56% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 2.89 points or 0.17% to 1,745.17, Shanghai Composite gained 10.32 points or 0.3% to 3,442.99, Jakarta Composite added 18.89 points or 0.31% to 6,040.72 and Hang Seng was up by 77.34 points or 0.27% to 29,198.26. On the flip side, Nikkei 225 decreased 144.36 points or 0.64% to 22,537.06, Taiwan Weighted shed 12.21 points or 0.11% to 10,720.46 and KOSPI Index was down by 12.04 points or 0.47% to 2,530.91.