Benchmarks trade slightly in red in early deals

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals, as traders opted to book profit after four days of continuous rally. Traders also remained on sidelines ahead of final Senate vote on U.S. tax-cut legislation. However, losses remained capped with traders getting some solace from Commerce & Industry Minister Suresh Prabhu’s statement that the government is working on a strategy to boost share of services in total exports from the country.

On the global front, Asian markets are trading mostly in red, with investors awaiting the final votes on U.S. tax-cut legislation. The US markets ended marginally in red in the last session, giving up some of their previous session’s gains on profit taking, as traders cashed in on the strength seen in recent sessions.

Back home, oil companies stocks remained buzzing, as the Finance minister Arun Jaitley has said that the Centre favours including petroleum products in the ambit of the Goods and Services Tax (GST) but it would want a consensus with the States before taking such a step. However, PSU banking stocks edged lower despite global rating agency Moody’s latest report highlighting that capital raising by a number of public sector banks (PSBs), including PNB and UBI, is credit positive because it will help improve their loss-absorbing buffers. Moody's said that it signals improved access to the equity capital markets and will reduce PSBs' dependence on fund infusion from the government.

The BSE Sensex is currently trading at 33814.96, down by 21.78 points or 0.06% after trading in a range of 33767.72 and 33956.31. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.33%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Realty up by 1.77%, Consumer Discretionary Goods & Services up by 0.58%, Auto up by 0.49%, Consumer Durables up by 0.45% and Industrials up by 0.37%, while Bankex down by 0.22%, FMCG down by 0.12%, Telecom down by 0.12%, PSU down by 0.07% and Power down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.75%, Hero MotoCorp up by 1.70%, Wipro up by 0.92%, Maruti Suzuki up by 0.77% and Tata Motors - DVR up by 0.73%. On the flip side, Tata Steel down by 1.88%, Dr. Reddys Lab down by 1.41%, Adani Ports down by 1.02%, Kotak Mahindra Bank down by 0.79% and Power Grid Corporation down by 0.79% were the top losers.

Meanwhile, supporting the idea of bringing petroleum products such as petrol, diesel and LPG (cooking gas) under the ambit of Goods and Services Tax (GST) regime, Finance Minister Arun Jaitley has said that the government is in favour of this idea, but they are waiting for a consensus from the state governments in this respect. The minister expressed hope that a consensus will be reached among the states to bring petroleum under GST. At present, different petroleum products are taxed differently across states.

Jaitley said ‘The constitution amendment which has been passed and ratified by state assemblies have kept petroleum and petroleum products as part of the GST, but a decision to levy the GST on petroleum can be taken only after the GST council takes a decision. We don’t need to amend any law if petroleum products are to be brought into the GST, but only after the council takes a decision is when it will be introduced.’

Reacting to the charge that petrol and diesel prices were not coming down in line with global prices, Finance Minister said it has to be kept in mind that a large number of duties on these products were imposed by the states.  He added that on the Centre's advice, a large number of states had brought down these taxes but the UPA (Congress and its allies) states did not do so. On tax collection from GST, he said that there is continuous progress and the states are being paid according to the legislation.

The CNX Nifty is currently trading at 10455.80, down by 7.40 points or 0.07% after trading in a range of 10440.75 and 10494.45. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.89%, ONGC up by 1.84%, GAIL India up by 1.72%, Lupin up by 1.41% and Hindalco up by 1.26%. On the flip side, Tata Steel down by 1.75%, HPCL down by 1.63%, Dr. Reddys Lab down by 1.33%, Kotak Mahindra Bank down by 1.12% and BPCL down by 1.09% were the top losers.

Asian markets are trading mostly in red; Jakarta Composite declined 74.01 points or 1.2% to 6,093.66, Hang Seng slipped 10.76 points or 0.04% to 29,242.90, KOSPI Index shed 1.47 points or 0.06% to 2,477.06 and Shanghai Composite was down by 1.31 points or 0.04% to 3,295.23.

On the flip side, Nikkei 225 rose 8.26 points or 0.04% to 22,876.26, FTSE Bursa Malaysia KLCI increased 11.49 points or 0.66% to 1,748.44 and Taiwan Weighted was up by 43.82 points or 0.42% to 10,511.16.