Equity benchmarks continue to show sluggish trend

Mirroring weak global cues, key equity benchmarks continued to show a sluggish trend in late morning session, with losses of around quarter a percent. Traders were cautious with the Central Board of Direct Taxes laying down the conditions for allowing a concessional rate of 10% tax on long-term capital gains tax (LTCG) arising from transfer of equity shares or equity oriented fund, even when securities transactions tax (STT) has not been paid on such transactions. Traders’ sentiments remained pessimistic with a private report stating that India is likely to face greater pressure to eliminate duties on 90% of goods it trades with China under the mega trade agreement among 16 Asia Pacific countries that is in the works. Traders failed to get any sense of relief from finance ministry’s statement that India has signed a $ 210 million loan agreement with the World Bank to improve rural connectivity in Madhya Pradesh.

On the global front, all the Asian markets were trading in red, as a rise in US bond yields to 3% and warnings from bellwether US companies of higher costs drove fears that corporate earnings growth may peak soon. Back home, in scrip specific developments, Fortis Healthcare gained on receiving unsolicited binding offer from IHH Healthcare Berhand with a proposal to invest in the company and Zensar Technologies edged higher on reporting 7 fold jump in Q4 consolidated net profit at Rs 72.65 crore for the quarter ended March 31, 2018 as compared to Rs 10.37 crore for the corresponding quarter in the FY17.

The BSE Sensex is currently trading at 34539.52, down by 77.12 points or 0.22% after trading in a range of 34501.89 and 34614.61. There were 10 stocks advancing against 20 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in mixed; the BSE Mid cap index slipped 0.13%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Telecom up by 1.68%, IT up by 1.27%, TECK up by 1.13% and Realty was up by 0.33%, while Metal down by 1.02%, Utilities down by 1.01%, Power down by 0.89%, Capital Goods down by 0.68% and Oil & Gas was down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.24%, Wipro up by 1.79%, TCS up by 1.78%, Yes Bank up by 1.11% and Infosys up by 0.59%. On the flip side, NTPC down by 1.65%, ONGC down by 1.56%, Tata Steel down by 1.47%, Asian Paints down by 1.29% and Dr Reddy’s Laboratories was down by 1.24% were the top losers.

Meanwhile, the NITI Aayog member V K Saraswat’s research note has said that at the time of signing free trade agreements (FTAs) with trading partners, India should keep two things in mind - mutually reciprocal terms and focusing on products and services with maximum export potential. It also said that before getting into any multilateral trade deal, India should review and assess its existing FTAs in terms of benefits to various stakeholders like industry and consumers, trade complementarities and changing trade patterns in the past decade.

Under a FTA, countries cut or eliminate duties on most number of goods traded between them besides liberalise norms to promote services trade and boost investments. India has so far implemented several such agreements including with Singapore, Japan, South Korea and Association of South East Asian Nations (ASEAN). The country is also negotiating similar pacts with nations including Chile, Australia, New Zealand and European Union.

The note also recommended negotiating bilateral FTAs with countries where trade complementarities and margin of preference is high. It said that proper safety and quality standards should be set to avoid dumping of lower quality hazardous goods into the domestic market. It added that circumvention of rules of origin should be strictly dealt with by the authorities.

The CNX Nifty is currently trading at 10585.60, down by 28.75 points or 0.27% after trading in a range of 10576.65 and 10612.60. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.20%, TCS up by 1.82%, Wipro up by 1.69%, BPCL up by 1.50% and Tech Mahindra was up by 1.25%. On the flip side, Zee Entertainment down by 1.78%, Hindalco down by 1.65%, NTPC down by 1.65%, ONGC down by 1.64% and Cipla was down by 1.59% were the top losers.

All the Asian markets were trading in red, Hang Seng declined 319.33 points or 1.04% to 30,316.91, Jakarta Composite slipped 80.28 points or 1.29% to 6,149.36, Nikkei 225 lost 67.04 points or 0.3% to 22,211.08, KOSPI Index fell 23.87 points or 0.97% to 2,440.27, Taiwan Weighted slipped 19.53 points or 0.18% to 10,559.97, FTSE Bursa Malaysia KLCI declined by 14.39 points or 0.77% to 1,850.95 and Shanghai Composite was down by 12 points or 0.38% to 3,116.93.