Bourses trade flat with negative bias; Telecom stocks drag

Key Indian benchmarks were trading flat with negative bias in late morning session, on the back of heavy selling in telecom, banking and PSU stocks. Sentiments were downbeat amid report that overseas investors have pulled out a massive Rs 7,300 crore from the country's stock markets this month so far, primarily due to rising crude prices and widening fiscal deficit. Some concerns also came with the RBI’s data report that bad loans of Public sector banks (PSBs) stood at Rs 7.34 lakh crore by the end of second quarter this fiscal, a bulk of which came from corporate defaulters. However, the indices managed to trim some of their losses with traders taking some solace from industry body ASSOCHAM's Year-Ahead Outlook report stating that Indian economy is likely to touch 7% growth in 2018 with the government policies tilting towards the country's stress-ridden rural landscape in the penultimate year before the 2019 general elections. Some relief also came with NITI Aayog vice-chairman Rajiv Kumar’s statement that a nationwide Goods and Services Tax (GST) regime is likely to stabilise in the next 18 months. Besides, the broader markets showed some fervor and traded with notable gains, performing better than their larger peers.

On the global front, Asian markets were trading mostly in red, as investors continued to stay on the sidelines amid a lack of fresh catalysts. Back home, in scrip specific development, Noida Toll Bridge was trading higher after the company executed a Settlement Agreement with South Delhi Municipal Corporation (SDMC) for resolving the disputes between SDMC and the company.

The BSE Sensex is currently trading at 33922.50, down by 17.80 points or 0.05% after trading in a range of 33909.56 and 34005.37. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Realty up by 1.24%, Metal up by 0.92%, Basic Materials up by 0.84%, Industrials up by 0.58% and Healthcare up by 0.55%, while Telecom down by 0.17%, Bankex down by 0.13%, PSU down by 0.04%, Power down by 0.03% and Energy down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.93%, Asian Paints up by 0.73%, Yes Bank up by 0.73%, Tata Steel up by 0.70% and Dr. Reddy’s Lab up by 0.64%. On the flip side, Mahindra & Mahindra down by 0.81%, NTPC down by 0.81%, Coal India down by 0.73%, Hero MotoCorp down by 0.71% and Power Grid Corporation down by 0.59% were the top losers.

Meanwhile, NITI Aayog’s vice-chairman Rajiv Kumar has said that a nationwide Goods and Services Tax (GST) regime is likely to stabilise in the next 18 months. He also said that there is scope for further rationalisation of tax rate under GST into three slabs of 0, 12 and 28 percent, from five at present. Emphasizing on the need to formalise the Indian economy, he said that this will encourage tax compliance from the existing levels of 40-43 percent to 90 percent.

Rajiv Kumar has stated that to expect one tax rate under new tax regime was impractical, given the size of the country which is equal to all European nations from Moscow to London put together. He also said that there are varied cultures and business ethics followed by different states, and hence it is not feasible to have one tax rate under GST. Therefore, he said that it was necessary to have those multiple rates. Adding further, he said that it will be a huge step forward if petroleum products are brought under the GST ambit, about which Union Finance Minister Arun Jaitley had recently spoken in the Rajya Sabha.

Talking on the demonetisation move, the vice chairman has said that the government may not have been able to convert all black money into white, but it has converted black money into grey. He also believes that the Rs 4.5 lakh crore that has returned into the banking system on account of demonetisation will also be acted upon.

The CNX Nifty is currently trading at 10490.60, down by 2.40 points or 0.02% after trading in a range of 10480.15 and 10515.10. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Bosch up by 1.94%, Vedanta up by 1.41%, Ambuja Cement up by 1.29%, GAIL India up by 1.05% and Cipla up by 0.96%. On the flip side, Hindustan Unilever down by 0.81%, Hero MotoCorp down by 0.81%, Mahindra & Mahindra down by 0.78%, NTPC down by 0.78% and Coal India down by 0.66% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 100.58 points or 0.96% to 10,421.91, Nikkei 225 decreased 56.59 points or 0.25% to 22,882.59, KOSPI Index decreased 6.94 points or 0.28% to 2,433.60 and FTSE Bursa Malaysia KLCI decreased 4.07 points or 0.23% to 1,756.17.

On the flip side, Shanghai Composite increased 15.51 points or 0.47% to 3,295.97.