Markets trade flat; Metal loses shine

Key Indian benchmarks were trading flat with negative bias in late morning session. The markets remained slightly in red as Moody’s Investors Service noted that India’s budget deficit would widen in 2017-18, due to lower taxes and higher public expenditure.  However, losses remained capped with report that India has climbed up one position to 126th in the International Monetary Fund's (IMF) ranking of countries based on their Gross Domestic Product (GDP) per capita. India's GDP per capita went up to $7,170 (Rs 4.66 lakh) in 2017 from $6,690 last year, helping improve its rank by a position to 126th. Meanwhile, a private report highlighted that India's push to digitize has seen its economy undergo massive changes, but that presents a multitrillion-dollar investment opportunity as both tax compliance and access to credit increase. Moreover, the broader markets continued to show resilience and traded with notable gains to perform better than their larger peers.

On the global front, Asian markets were trading mostly in red, following a decline in US equities last Friday on lingering concerns about American tax reform. Back home, in scrip specific development, Arrow Greentech was trading higher after the company received an approval to form a new wholly owned subsidiary company to explore the US business inter-alia related to patents/products owned/manufactured by the Company.

The BSE Sensex is currently trading at 33333.91, down by 8.89 points or 0.03% after trading in a range of 33288.21 and 33449.53. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Utilities up by 0.73%, Telecom up by 0.68%, Capital Goods up by 0.61%, Industrials up by 0.51% and FMCG up by 0.45%, while Basic Materials down by 0.76%, Metal down by 0.45%, IT down by 0.35%, TECK down by 0.24% and Energy down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.36%, Bajaj Auto up by 1.13%, Larsen & Toubro up by 1.04%, Kotak Mahindra Bank up by 0.83% and Maruti Suzuki up by 0.78%. On the flip side, ICICI Bank down by 1.68%, Cipla down by 1.68%, SBI down by 1.17%, Tata Steel down by 1.09% and Infosys down by 0.88% were the top losers.

Meanwhile, after the recent reduction in goods and services tax (GST) rates on mass consumer goods items, Finance Secretary Hasmukh Adhia has stated that he does not foresees any immediate rate revisions after the latest changes, which were incorporated after the last GST Council meet. He added that the latest changes have resolved nearly 90 per cent of problems and discontentment related to the indirect tax regime. He however also said that as and when required, rates on other items may be changed.

The GST Council recently removed 178 items from the highest 28 per cent category and also reduced tax on all restaurants outside starred-hotels to 5 per cent. Adhia said that there was a huge demand to make these cuts and companies, including FMCG firms, might be prosecuted if their retailers do not immediately cut the prices of products whose GST rates have been slashed. He advised companies to “transparently” advertise in newspapers by how much their prices had come down. Items on which tax rates have dipped include detergents, sanitary ware, suitcase, beauty products, chocolates, marble and granite, wall paper, plywood, and stationery articles. He added that making the changes in prices visible would be a measure of their standards of corporate governance.

Elaborating on the medium-to-long term benifits of GST, Finance Secretary said that it will enable ease of doing business resulting in more investments. This he said will push the GDP growth higher and also increase tax buoyancy. A high tax buoyancy will allow the government to directly help the MSME, agriculture and other sectors and would result in more job creation.

The CNX Nifty is currently trading at 10274.40, down by 9.20 points or 0.09% after trading in a range of 10261.50 and 10309.50. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 1.86%, Bharti Infratel up by 1.80%, GAIL India up by 1.73%, Bajaj Auto up by 1.39% and Coal India up by 1.36%. On the flip side, Ambuja Cement down by 2.09%, ICICI Bank down by 1.85%, Ultratech Cement down by 1.71%, Cipla down by 1.70% and Hindalco down by 1.56% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 98.32 points or 0.44% to 22,298.48, Taiwan Weighted decreased 37.09 points or 0.35% to 10,664.55, Hang Seng decreased 27.57 points or 0.09% to 29,171.47, Shanghai Composite decreased 24.96 points or 0.74% to 3,357.95, FTSE Bursa Malaysia KLCI decreased 3.19 points or 0.19% to 1,718.47 and KOSPI Index decreased 0.57 points or 0.02% to 2,533.42.

On the flip side, Jakarta Composite increased 36.99 points or 0.61% to 6,088.72.