Benchmarks trade slightly in red on feeble global cues

Pressurized by feeble global cues, Indian equity benchmarks made sluggish start and are trading slightly in red in early deals on Tuesday. Sentiments also remained dampened on report that tax collection under the Goods and Services Tax (GST) was lower at Rs 83,346 crore in October, against a mop-up of over Rs 90,000 crore in September. The Finance Ministry said that total collection stood at Rs 83,346 crore till November 27 for the month of October and 50.1 lakh returns were filed for the month. However, losses remained capped with investors taking some solace with report that the government sticking to its promise to lower the tax burden on India Inc is exploring the possibility of reducing the corporate tax rates for larger firms as well. The exact quantum of the cut in corporate tax rate is expected to be finalised closer to the presentation of the Union Budget 2018-19, but revenue implications also have to be factored in.

On the global front, Asian markets were trading mostly in red at this point of time amid uncertainty over the US tax bill, though the Japanese market was trading higher as the yen reversed earlier gains. The US markets made a mixed closing after a lackluster trade, as traders seemed reluctant to make significant moves ahead of congressional testimony from Federal Reserve Chair nominee Jerome Powell and current Fed Chair Janet Yellen.

Back home, downside also remained capped with report that Asian Development Bank is expecting the Indian economy to pick up in the coming quarters and grow by 7 per cent this fiscal. Stocks related to telecom sector rang loud, as the Telecom Regulatory Authority of India (Trai) will issue recommendations on net neutrality.

The BSE Sensex is currently trading at 33666.40, down by 58.04 points or 0.17% after trading in a range of 33639.32 and 33742.04. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.24%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.45%, Realty up by 0.27%, Basic Materials up by 0.15%, Consumer Disc up by 0.12% and Industrials was up by 0.12%, while Metal down by 0.55%, PSU down by 0.53%, Energy down by 0.45%, IT down by 0.45% and Power was down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Industries up by 0.88%, Maruti Suzuki up by 0.85%, Cipla up by 0.81%, Tata Motors - DVR up by 0.40% and Bajaj Auto up by 0.39%. On the flip side, Power Grid Corporation down by 1.43%, ONGC down by 1.39%, NTPC down by 1.37%, ICICI Bank down by 0.96% and Infosys down by 0.87% were the top losers.

Meanwhile, the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted India's gross domestic product (GDP) growth to improve to 6.2 percent in July-September quarter of the fiscal year 2017-18 (Q2FY18) and rise further to 6.7 percent in the third quarter of current fiscal. In Q1FY18, the country’s GDP fell to a 3-year low of 5.7 percent. It said that the slowdown in the economy due to demonetisation and the adjustment impact of the goods and services tax (GST) implementation seemed to be bottoming out and as the new indirect tax regime stabilizes, the economy would see an improvement in its performance.

FICCI said that steps taken by the government to reduce the compliance burden related to GST and make implementation smoother, the plan announced for recapitalisation of banks and the thrust on the infrastructure sector have been acknowledged by the survey participants as indicating the government’s resolve to address key issues that are hobbling growth. The survey participants also mentioned that government should continue with its emphasis on productive capital investments in the social and physical infrastructure space, even if this requires some calibration of the fiscal deficit target. They projected the budgetary fiscal deficit for the current year likely to be slightly higher at 3.3 percent. The government has set the target of containing it at 3.2 percent.

On the inflation front, the survey showed that wholesale inflation for the current fiscal was likely to be around 2.8 percent and consumer price indexed (CPI), or retail, inflation would be a little higher at 3.4 percent. The industry body further said that the government must take steps to strengthen consumption demand and continue with its focus on productive capital spending. It also suggested that the Reserve Bank of India (RBI) can undertake a reassessment of various loan rates and other ratios based on their historical trends and corresponding economic impact in order to identify a possible way of promoting credit off-take across various sectors.

The CNX Nifty is currently trading at 10388.10, down by 11.45 points or 0.11% after trading in a range of 10372.25 and 10398.50. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were UPL up by 1.53%, Zee Entertainment up by 1.08%, HDFC up by 0.93%, Indiabulls Housing up by 0.91% and Cipla up by 0.83%. On the flip side, ONGC down by 1.87%, NTPC down by 1.64%, Power Grid Corporation down by 1.64%, BPCL down by 1.14% and Infosys down by 0.91% were the top losers.

Asian markets were trading mostly in red; Hang Seng dclined 265.25 points or 0.89% to 29,420.94, Nikkei 225 slipped 64.78 points or 0.29% to 22,431.21, Taiwan Weighted fell 56.32 points or 0.52% to 10,694.61, Jakarta Composite shed 42.71 points or 0.7% to 6,021.88, Shanghai Composite dropped 16.27 points or 0.49% to 3,305.96 and FTSE Bursa Malaysia KLCI was down by 5.21 points or 0.3% to 1,714.65.

On the flip side, KOSPI Index was up by 2.25 points or 0.09% to 2,510.06.