Benchmarks trade flat in morning session

Indian equity benchmarks continued their lackluster trade hovering near neutral line in morning session. The rupee depreciated against the US dollar in early trade on fresh demand for the greenback from importers and banks ahead of US Federal Reserve’s two-day policy meet outcome. Dealers attributed the rupee’s fall to fresh demand for the US dollar and sustained foreign fund outflows. The street took note of a report highlighting that the growth of eight core infrastructure industries slowed to three-month low of 4.1% in March 2018, as compared to 5.3% in February 2018, on account of weak performance in as many as six sectors including coal, crude oil and natural gas. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 138.0 in March, 2018, which was 4.1% higher compared to the index of March, 2017. The core sector would have an impact on the Index of Industrial Production (IIP) data as these eight segments account for about 41 per cent of the total factory output.

The downside was however capped as the goods and services tax (GST) collections in the month of April crossed the Rs 1 lakh crore mark for the first time since the new tax regime was rolled out on July 1 last year . According to the Ministry of Finance, the average monthly collection under the GST regime for the last eight months -- August 2017-March 2018 -- was Rs 89,885 crore. Finance minister Arun Jaitley said that with the improved economic climate, introduction of e-way bill and improved GST compliance, GST collections would continue to show a positive trend. Investors took note of a report stating that India has seen its growth in manufacturing activity thanks to faster expansions in output and new orders. The Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, rose to 51.6 in April from 51.0 in March. The report underlined that business sentiment was at the strongest level seen since the implementation of the Goods and Services Tax in July 2017, driven by expectations that underlying demand will improve further over the next 12 months.

Traders were seen buying in Energy, Realty and Capital Goods stocks, while selling was witnessed in Metal, IT and TECK sector stocks. In scrip specific developments, auto stocks were buzzing as India’s automobile companies have started the new financial year with a bang, helped by robust sales in April. The trend looks set to continue, the only dark cloud in a sunny future being the increasing fuel prices posing growth challenges. Jet Airways and InterGlobe Aviation (IndiGo) were under pressure as investors were wary of hike in aviation fuel prices. Effective May 1, Indian Oil Corporation (IOC) has decided to hike jet fuel (aviation turbine fuel) to Rs 65,340/KL, implying a hike of 6.5 percent against Rs 61,450/KL in the previous month.

On the global front, Asian markets were trading in red. Growth in China’s manufacturing sector unexpectedly picked up in April as output quickened slightly, a private survey showed, though a decline in export orders reinforced risks to the outlook as firms continued to shed staff while inventories also rose. Activity in Japan’s services sector expanded at the fastest pace in six months in April as new orders picked up, a private survey showed, suggesting the economy got off to a strong start in the second quarter. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 35,100 and 10,700 levels, respectively. The market breadth on BSE was positive in the ratio of 1109:1064, while 80 scrips remained unchanged.

The BSE Sensex is currently trading at 35168.40, up by 8.04 points or 0.02% after trading in a range of 35113.53 and 35357.15. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.10%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were Energy up by 0.58%, Realty up by 0.48%, Capital Goods up by 0.48%, Auto up by 0.44% and Industrials up by 0.41%, while Metal down by 1.50%, IT down by 1.13%, TECK down by 0.77%, Consumer Durables down by 0.54% and PSU down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 4.33%, Bajaj Auto up by 2.31%, Tata Motors up by 1.44%, Tata Motors - DVR up by 1.41% and Reliance Industries up by 1.39%.

On the flip side, ICICI Bank down by 1.78%, SBI down by 1.20%, Coal India down by 1.18%, IndusInd Bank down by 1.17% and Hindustan Unilever down by 1.16% were the top losers.

Meanwhile, the government’s revenue collection under the Goods and Services Tax (GST) during the month of April 2018 has crossed the Rs 1 lakh crore mark for the first time since the launch of new tax regime on July 1 last year. According to the latest data released by the government, the total revenue mop-up under GST stood at Rs 1,03,458 crore in April 2018. Of which, Central GST (CGST) is Rs 18,652 crore, State GST (SGST) is Rs 25,704 crore, Integrated GST (IGST) is Rs 50,548 crore (including 21,246 crore collected on imports) and Cess is Rs 8554 crore (including Rs 702 crore collected on imports). 

As per the data, so far 60.47 lakh GSTR 3B returns have been filed for March up to April 30, 2018 as against 87.12 lakh, who are eligible to file returns for March which is 69.5% of the total, higher than the trend seen in earlier months. Besides, it pointed out that April was also the month for filing of Quarterly Return for Composition Dealers. Out of 19.31 lakh composition dealers, 11.47 lakh have filed their quarterly return (GSTR 4) which is 59.40% and have paid a total tax of Rs 579 crore, which is included in the above figure of Rs 1.03 lakh crore of total GST collection. 

Furthermore, data indicated that the total revenue earned by the Central Government and the State Governments after settlement in the month of April, 2018 is Rs 32,493 crore for CGST and Rs 40,257 crore for the SGST. Besides, the ministry has stated that the buoyancy in the tax revenue of GST reflects the upswing in the economy and better compliance.  However, it is usually noticed that in the last month of the Financial Year, people also try to pay arrears of some of the previous months also and, therefore, this month’s revenue cannot be taken as trend for the future.

The CNX Nifty is currently trading at 10733.45, down by 5.90 points or 0.05% after trading in a range of 10717.95 and 10784.65. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 4.24%, Zee Entertainment up by 2.92%, Bajaj Auto up by 2.20%, Cipla up by 1.61% and Tata Motors up by 1.44%.

On the flip side, HCL Tech down by 3.57%, Vedanta down by 2.48%, ICICI Bank down by 1.79%, Tech Mahindra down by 1.60% and Coal India down by 1.53% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 185.99 points or 0.6% to 30,622.46, Nikkei 225 decreased 79.38 points or 0.35% to 22,428.65, Taiwan Weighted decreased 38.4 points or 0.36% to 10,619.48, FTSE Bursa Malaysia KLCI decreased 23.57 points or 1.26% to 1,846.80, Shanghai Composite decreased 11.35 points or 0.37% to 3,070.88, KOSPI Index decreased 10.94 points or 0.43% to 2,504.44 and Jakarta Composite decreased 2.99 points or 0.05% to 5,991.61.