Benchmarks turn red in early deals; Nifty slips below 10,450 level

Indian equity benchmarks pared all of their initial gains to enter into red terrain with frontline gauges slipping below their crucial 10,450 (Nifty) and 33,800 (Sensex) levels. However, losses remained capped with traders taking some support with the eight core industries growing by 6.8 per cent in November 2017, compared to the production during November 2016. The growth in November was driven by a 16.6 per cent increase in steel production over November 2016. Traders are also getting some solace with government’s decision to ease norms for rectification of GST returns. The Finance Ministry has permitted businesses to rectify mistakes in their monthly returns - GSTR-3B - and adjust tax liability, a move that will help them file correct returns without fear of penalty.

Global cues remained supportive with most of the Asian markets trading in green at this point of time after a survey of Chinese manufacturing proved surprisingly upbeat, while the euro lurked within striking distance of its 2017 top against an ailing US dollar. Though, The US markets along with other global markets remained closed in last session, unable to give any cues.

Back home, banking shares remained under pressure, as the country’s largest PSU bank SBI has lowered the base rate by 30 basis points to 8.65 per cent, setting trend for other banks to follow. It is also set to initiate insolvency proceedings against at least a dozen defaulting companies. Cement stocks too edged lower despite cement production increasing by 17.3 per cent in November 2017 over same month in 2016.

The BSE Sensex is currently trading at 33781.51, down by 31.24 points or 0.09% after trading in a range of 33765.68 and 33964.14. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index gained 0.67%, while Small cap index was down by 0.71%.

The top losing sectoral indices on the BSE were Realty down by 0.87%, Basic Materials down by 0.65%, Industrials down by 0.57%, Capital Goods down by 0.57% and Metal was down by 0.54%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were ONGC up by 1.56%, NTPC up by 0.91%, Indusind Bank up by 0.81%, Mahindra & Mahindra up by 0.59% and HDFC Bank up by 0.54%. On the flip side, SBI down by 0.85%, Hindustan Unilever down by 0.79%, Asian Paints down by 0.73%, Kotak Mahindra Bank down by 0.61% and Adani Ports down by 0.59% were the top losers.

Meanwhile, in a move that will help the worried businesses still finding difficulty with the new tax regime and to file correct returns without fear of penalty, the government has relaxed norms for rectification of returns under Goods and Services Tax (GST) regime. The Finance Ministry has allowed companies and businesses to rectify mistakes in their monthly returns - GSTR-3B - and adjust tax liability under GST. With this, companies-businessmen will get the opportunity to claim tax credit correctly after rectifying the mistakes made initially while computing GST liability.

After the implementation of GST from July 1, 2017 in the country, the companies were having difficulty in assessing the tax liability correctly. Industry organizations were demanding relaxation in the rules and simultaneously simplifying compliance provisions, as this will ease the adoption of the new system of tax filing companies online.

In order to improve the procedure, the Central Board of Excise and Customs (CBEC) has said that , as return in Form GSTR-3B does not contain provisions for reporting of differential figures for past month(s), the said figures may be reported on net basis along with the values for current month itself in appropriate tables. It said while making adjustments in the output tax liability or input tax credit, there can be no negative entries in GSTR-3B.

CBEC also said that the amount remaining for adjustment, if any, may be adjusted in the returns in Form GSTR-3B of subsequent months and, in cases where such adjustment is not feasible, refund may be claimed. It further said that GSTR-3B, initial summarised return, has to be filed by businesses by 20th day of every month for the previous month showing details of taxes paid. It added that where adjustments have been made in Form GSTR-3B of multiple months, corresponding adjustments in Form GSTR-1 should also preferably be made in the corresponding months.

The CNX Nifty is currently trading at 10437.60, up by 2.05 points or 0.02% after trading in a range of 10428.25 and 10495.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.77%, ONGC up by 1.69%, Indusind Bank up by 1.00%, NTPC up by 0.99% and Tech Mahindra up by 0.97%. On the flip side, Indiabulls Housing down by 2.49%, HPCL down by 2.33%, Eicher Motors down by 2.32%, BPCL down by 1.18% and Aurobindo Pharma down by 0.93% were the top losers.

Asian markets are trading mostly in green; KOSPI Index rose 8.73 points or 0.35% to 2,476.22, Shanghai Composite surged 35.81 points or 1.08% to 3,342.98, Taiwan Weighted increased 40.41 points or 0.38% to 10,683.27, Jakarta Composite added 61.66 points or 0.97% to 6,417.32 and Hang Seng was up by 502.11 points or 1.68% to 30,421.26.

On the flip side, FTSE Bursa Malaysia KLCI was down by 14.89 points or 0.83% to 1,781.92.