Benchmarks trade below neutral line in morning session

Indian equity benchmarks continued their weak trade in the morning session on account of selling in frontline blue chip counters. The street remained cautious ahead of mid-term review of foreign trade policy due later today, RBI policy tomorrow and Gujarat elections on Saturday. The rupee was trading higher against dollar on fresh selling of the greenback by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets on Monday and sold shares worth Rs 602.83 crore with gross purchases and gross sales of Rs 20,704.03 crore and Rs 21,306.86 crore, respectively. The sentiments were dampened after global ratings firm Fitch lowered India’s growth forecast for FY’19 to 7.3% from 7.4% earlier. In its observation on India published in its Global Economic Outlook, Fitch has noted that the rebound in the Indian economy during the September’17 quarter, with GDP growing by 6.3% y-o-y, up from 5.7% in 2Q17 was weaker than it expected. Separately, activity in India’s dominant services industry shrank in November as rising prices, driven up in part by the new national sales tax, took a toll on both foreign and domestic demand. November’s Nikkei/IHS Markit Services Purchasing Managers’ Index fell to 48.5 - its lowest since August - from 51.7 in October, well below the 50 mark that separates expansion from contraction.

Investors took note that Finance Secretary Hasmukh Adhia has called a meeting of tax officials from the Centre and States on December 9, to assess the trend in revenue collections from the Goods and Services Tax (GST) and review measures to further boost compliance. Meanwhile, export oriented stocks remained buzzing in today’s trade as the key policymakers led by Commerce Minister Suresh Prabhu will unveil the mid-term review of the foreign trade policy today. Exporters have been voicing concerns about challenges on account of implementation of GST. Mixed reactions were displayed in aviation stocks on report that India’s domestic passenger traffic grew by 20.4% in October. The report enlightened that India’s domestic demand was highest amongst major aviation markets like Australia, Brazil, China, Japan, Russia and the US.

Traders were seen piling up position in Realty, Energy and Telecom stocks, while selling was witnessed in Power, Capital Goods and Metal sector stocks. In scrip specific development, Balaji Amines was trading in green as the Department of Industries, Energy and Labour, Mantralya, Mumbai has conferred ‘Mega Project’ status to the Expansion Project being under taken by the company at an project outlay of Rs 296 crore at MIDC Chincholi, Solapur, Maharashtra. The status of Mega Project entitles the company to various incentives, subject to compliance of conditions of Package Scheme Incentives (PSI) 2013.

On the global front, Asian markets were trading mostly in red. Growth in China’s services sector activity picked up to a three-month high in November, buoyed by a solid rise in new business, though the rate of expansion remained moderate and weaker than the long-run trend. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,800 and 10,100 levels respectively. The market breadth on BSE was negative in the ratio of 763:1460, while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 32781.04, down by 88.68 points or 0.27% after trading in a range of 32682.52 and 32830.91. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.13%, while Small cap index was down by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 0.80%, Energy up by 0.42%, Telecom up by 0.37%, IT up by 0.36% and TECK up by 0.33%, while Power down by 1.11%, Capital Goods down by 1.01%, Metal down by 0.92%, Utilities down by 0.88% and Consumer Durables down by 0.83% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.11%, Bharti Airtel up by 1.05%, Reliance Industries up by 0.94%, Sun Pharma up by 0.94% and TCS up by 0.59%.

On the flip side, Power Grid down by 2.14%, Hero MotoCorp down by 1.60%, Larsen & Toubro down by 1.35%, ONGC down by 1.32% and Adani Ports & Special Economic Zone down by 1.30% were the top losers.

Meanwhile, Finance Secretary Hasmukh Adhia has called a meeting of tax officials from the Centre and States on December 9, to assess the trend in revenue collections from the Goods and Services Tax (GST) and review measures to further boost compliance. The officials will also discuss measures to arrest revenue leakages and increase collections under the new indirect tax regime.

The meeting has been called in light of the recent dip in revenues from goods and services tax (GST) that slipped to Rs 83,346 crore for October - the lowest since the July 1 rollout of the indirect tax. The centre’s share in GST between August and October amounted to Rs 58,556 crore, while State GST was Rs 87,238 crore for the period. The government will gauge the trend in revenue receipts and look at ways to increase tax collections and compliance levels.

With just two months remaining for the presentation of the Union Budget for 2018-19, the government will also factor in estimates on indirect tax receipts for the budget and it is being said that the finance ministry is considering tabulating revenues from GST under the head of total indirect tax revenue, instead of giving a detailed breakup. The issue is significant given that the Centre’s finances are under pressure as it tries to meet the fiscal deficit target of 3.2 per cent in 2017-18.

The finance ministry, had earlier said the decline in GST revenue in October is mainly on account of utilisation of already-collected Integrated GST (IGST) as credit against Central GST (CGST) and State GST (SGST), along with a lower tax incidence on items in the GST regime.

The CNX Nifty is currently trading at 10096.85, down by 30.90 points or 0.31% after trading in a range of 10069.10 and 10119.20. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.13%, Reliance Industries up by 0.99%, Bharti Airtel up by 0.86%, BPCL up by 0.83% and TCS up by 0.63%.

On the flip side, Power Grid down by 2.05%, ONGC down by 1.60%, Tech Mahindra down by 1.52%, Adani Ports & Special Economic Zone down by 1.51% and Hero MotoCorp down by 1.48% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 98.02 points or 0.92% to 10,553.09, Hang Seng decreased 86.65 points or 0.3% to 29,051.63, Nikkei 225 decreased 50.93 points or 0.22% to 22,656.23, Jakarta Composite decreased 13.39 points or 0.22% to 5,984.81 and FTSE Bursa Malaysia KLCI decreased 0.28 points or 0.02% to 1,712.85.

On the other hand, Shanghai Composite increased 1.98 points or 0.06% to 3,311.60 and KOSPI Index increased 4.78 points or 0.19% to 2,506.45.