Weak trade prevails in morning session

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. The rupee opened lower against dollar ahead of GDP and fiscal deficit data due later in the day. Foreign Portfolio Investors stood net buyers in domestic equity markets on Wednesday and bought shares worth Rs 784.35 crore with gross purchases and gross sales stood at Rs 5,114.49 crore and Rs 4,330.14 crore, respectively. Oil markets opened cautiously ahead of the outcome of an OPEC meeting in Vienna later in the day, with members set to debate the path for an extension of the group’s supply-cut agreement.  Traders remained on sidelines ahead of September quarter GDP data that will be announced later in the day, though it is expected that economic growth pace is likely to pick up in the three months ending in September, halting a five-quarter slide as businesses started to overcome teething troubles after the bumpy launch of a national sales tax. Market participants will keenly watch GDP data to understand the effects of GST implementation on the economy.

Separately, a foreign brokerage enlightened that a prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors. The report added that all good things must come to an end and there will be a bear market, eventually.  Investors took note of Chief Economic Advisor Arvind Subramanian’s statement that demonetization and GST rollout may have reinforced the growth deceleration that had already set in. He added that not just growth, but investment, credit, exports, industrial production they all started decelerating sometime in the second quarter last year.

Traders were seen piling up position in Realty stocks, while selling was witnessed in Energy, Oil & Gas and Bankex sector stocks. In scrip specific development, ICICI Lombard General Insurance Company was trading in red as the company and National Insurance Company may take a combined hit of Rs 300 crore from the fire that gutted the manufacturing unit of Haldiram’s, the biggest sweets and snacks maker in the country. The fire, which had raged for 15 hours from September 6 and had taken more than 100 fire tenders and more than 200 firefighters to douse, destroyed a new manufacturing unit with modern machines in Noida’s Sector 68.

On the global front, Asian markets were trading mostly in red. Growth in China’s manufacturing sector unexpectedly picked up in November, despite a crackdown on air pollution and a cooling property market. The official Purchasing Managers’ Index (PMI) stood at 51.8 in November, compared with 51.6 in October. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,400 and 10,300 levels respectively. The market breadth on BSE was negative in the ratio of 955:1286, while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 33360.47, down by 242.29 points or 0.72% after trading in a range of 33330.14 and 33576.20. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index was down by 0.21%.

The only gaining sectoral index on the BSE was Realty up by 0.46%, while Energy down by 1.08%, Oil & Gas down by 0.83%, Bankex down by 0.81%, PSU down by 0.78% and Power down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.05%, Dr. Reddy’s Lab up by 0.84%, Wipro up by 0.30%, Infosys up by 0.25% and Hero MotoCorp up by 0.02%.

On the flip side, Mahindra & Mahindra down by 1.72%, Kotak Mahindra Bank down by 1.58%, Cipla down by 1.40%, Power Grid down by 1.29% and Reliance Industries down by 1.24% were the top losers.

Meanwhile, acting on exporters concerns of continuous delays in getting refunds on the Integrated Goods and Service Tax (IGST), the Finance Ministry has asked them to file GSTR 3 B and table 6A of GSTR 1 on the GSTN portal and Shipping Bill (s) on Customs EDI System, which are the pre-requisites for sanction of payment.

The Finance Ministry also said that exporters must ensure that there is no discrepancy in the information filed in Table 6A of GSTR 1 and the Shipping Bill as these were the main reasons behind the delay or even rejection of refunds.

The Central Board of Excise and Customs (CBEC) had last month begun processing IGST refunds to exporters after a special expert group under Finance Secretary Hasmukh Adhia reviewed the problem of delays in sanctioning them. It also clarified that the quantum of IGST refund claims as filed through Shipping Bills during the period July-October, was about Rs 6,500 crore. About Rs 30 crore was pending as refund of unutilised credit on inputs or input services.

Before the introduction of the GST, exporters were getting upfront tax exemption, but in the new tax regime, they need to pay taxes on the goods they manufacture or purchase. These taxes can be claimed as refunds only after the goods have been exported out of India. In October, India’s exports had declined for the first time in over a year, and were down 1.1% on year at $23.1 billion.

The CNX Nifty is currently trading at 10284.60, down by 76.70 points or 0.74% after trading in a range of 10276.50 and 10332.70. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Bosch up by 2.66%, Bajaj Auto up by 0.92%, Indiabulls Housing Finance up by 0.89%, Dr. Reddy’s Lab up by 0.78% and GAIL India up by 0.66%.

On the flip side, Mahindra & Mahindra down by 1.83%, Ultratech Cement down by 1.56%, Kotak Mahindra Bank down by 1.50%, Reliance Industries down by 1.42% and Cipla down by 1.41% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 377.92 points or 1.28% to 29,245.91, Taiwan Weighted decreased 122.51 points or 1.14% to 10,591.04, KOSPI Index decreased 17.58 points or 0.7% to 2,495.32, Jakarta Composite decreased 12.15 points or 0.2% to 6,049.22 and Shanghai Composite decreased 8.77 points or 0.26% to 3,329.09.

On the other hand, FTSE Bursa Malaysia KLCI increased 0.18 points or 0.01% to 1,720.56 and Nikkei 225 increased 55.25 points or 0.24% to 22,652.45.