Bourses continue to show sluggish trend in afternoon deals

Mirroring weak global cues, Indian equity benchmarks continued to show a sluggish trend in early afternoon session, with losses of around three percent. The mood on the street remained cautious with the private report that lower indirect tax revenue collections may outweigh any upside risks from higher nominal GDP growth, non-tax revenue and direct tax collection. Some cautions also prevailed in the markets ahead of the Reserve Bank of India’s (RBI) policy review meeting which will start later in the day. Investors are expecting that the central bank will tighten its monetary policy stance in the wake of growing concerns over fiscal slippage. The session was also negative for broader indices, which succumbing to selling pressure, were trading with losses in the range of 3.00-3.80%. The markets didn’t took note of Finance Minister Arun Jaitley’s statement that expediting public services and ensuring fairness in procurement will supplement rapid economic growth in the South Asian region including India. In scrip specific development, Mangalam Organics (MOL) was up by over two and half percent after signing alliance agreement with LES Derives Resiniques ET Terpeniques, BP 206-40105 Dax Cedex - France (DRT) to manufacture and Supply terpene phenolic resin.

On the global front, Asian markets were trading in red, after Wall Street suffered its biggest decline since 2011 as investors' faith in factors underpinning a bull run in markets began to crumble.  Back home, the BSE Sensex is currently trading at 33734.49, down by 1022.67 points or 2.94% after trading in a range of 33482.81 and 33941.34. There were 31 stocks declining on the index, while there were no gaining stocks on BSE.

The broader indices were trading in red; the BSE Mid cap index was down by 3.04%, while Small cap index was down by 3.72%.

The top losing sectoral indices on the BSE were Realty down by 5.30%, Consumer Durables down by 3.99%, Basic Materials down by 3.97%, Metal down by 3.61% and Bankex down by 3.44%, while there were no gaining sectoral indices on the BSE.

The top losers on the Sensex were Tata Motors down by 6.40%, Tata Motors - DVR down by 5.10%, Axis Bank down by 4.96%, Kotak Mahindra Bank down by 3.80% and Yes Bank down by 3.63%.

Meanwhile, Finance Secretary Hasmukh Adhia has said that while rolling out a new nationwide goods and services tax (GST), the government has sacrificed the cost of initial revenue in the hope that compliance will be improve in the future. He also said that the organised sector has gained in the process of GST implementation and the improvement is evident in companies’ balance sheets. He noted that industry has welcomed GST as it is expected to streamline manufacturing activity, bring down logistics cost and benefit the balance sheet of companies.

Adhia has stated that the tax payer base has gone up after the GST as well as demonetization move and there has been a concerted effort to make India a tax compliance society. He also said that E-way bill and invoice matching in the new indirect tax regime will help curb evasion. He noted that GST and demonetisation were part of the government’s ‘sustained campaign’ against tax evasion. Adding further, he said that there has been a concerted effort by the government to give a message to the society that let us all become a tax compliant society rather than a tax non-compliant society. He added that they have already seen very good results of these two major reforms.

According to the latest Economic Survey, the GST implementation has increased indirect taxpayer base by more than 50 percent with 34 lakh businesses coming into the tax net. As per the data available, GST collections in July were over Rs 95,000 crore, while in August the figure declined to over Rs 91,000 crore. In September, it was over Rs 92,150 crore, in October it was Rs 83,000 crore, in November it was Rs 80,808 crore and in December it was Rs 86,703 crore.

The CNX Nifty is currently trading at 10360.05, down by 306.50 points or 2.87% after trading in a range of 10276.30 and 10423.70. There were no stocks advancing against 50 stocks declining on the index.

The top losers on Nifty were Tata Motors down by 6.32%, Axis Bank down by 5.03%, GAIL India down by 3.99%, Ultratech Cement down by 3.89% and Indiabulls Housing Finance down by 3.83%.

All the Asian markets were trading in red; Hang Seng decreased 1411.36 points or 4.38% to 30,833.86, Nikkei 225 was down by 1071.84 points or 4.73% to 21,610.24, Taiwan Weighted shed 542.25 points or 4.95% to 10,404.00, Jakarta Composite dropped 135.4 points or 2.05% to 6,454.28, Shanghai Composite declined 111.19 points or 3.19% to 3,376.30, FTSE Bursa Malaysia KLCI decreased 48.25 points or 2.6% to 1,804.82 and KOSPI Index was down by 38.44 points or 1.54% to 2,453.31.