Benchmarks trade flat with positive bias

Indian equity benchmarks were trading flat with a positive bias in morning session. Traders remained optimistic with the India Meteorological Department (IMD) forecasting that the Monsoon would hit Kerala in the next 24 hours. It said that the southwest Monsoon had advanced into South Andaman Sea, some parts of South Bay of Bengal and Nicobar Islands on May 25, with enhanced cloudiness and rainfall. Some support also came Finance Ministry’s clarifying that renting or leasing of land by farmers for agriculture, forestry, fishing or animal husbandry is exempt from the GST. Investors took note of a report that Commerce and Industry Minister Suresh Prabhu has said that Chinese officials will visit India soon to hold bilateral discussions on the issues hampering the negotiations of the proposed mega free trade deal - Regional Comprehensive Economic Partnership (RCEP). Meanwhile, wheat procurement has crossed the government's target by 6.25% to 34.08 million tonnes (MT) so far so far in this marketing year as purchases in Uttar Pradesh have picked following special efforts by the state authorities. Total wheat procurement stood at 30.82 MT in 2017-18.

On the global front, Asian markets were trading mostly in red, as the political crisis in Italy worsened, investors favoured government bonds and the yen strengthened. The weak equities sentiment came after Italian bonds and equities sold off on May 28 as a fresh election appeared likely in the euro zone’s third-largest economy. Back on domestic turf, in scrip specific development, Bank of India was trading in red as its net loss widens to Rs 3,969.27 crore in the March quarter due to higher provisioning for mounting bad loans. It had reported a net loss of Rs 1,045.54 crore for the January-March period of the preceding fiscal, 2016-17.

The BSE Sensex is currently trading at 35172.58, up by 7.10 points or 0.02% after trading in a range of 35095.89 and 35232.44. There were 19 stocks advancing against 11 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.25%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.15%, Oil & Gas up by 1.12%, Industrials up by 0.92%, Utilities up by 0.74% and Telecom was up by 0.71%, while Bankex down by 0.55% and Consumer Durables was down by 0.38% were the only losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.66%, Larsen & Toubro up by 1.49%, Tata Steel up by 1.39%, Bharti Airtel up by 1.16% and Maruti Suzuki was up by 1.04%. On the flip side, SBI down by 1.27%, ICICI Bank down by 1.05%, Kotak Mahindra Bank down by 0.88%, HDFC down by 0.78% and Tata Motors - DVR was down by 0.72% were the top losers.

Meanwhile, Union Minister of Petroleum and Natural Gas, Dharmendra Pradhan assured that the government is working on a holistic strategy to find long-term solution to spurt in petrol and diesel prices caused by a rally in international oil prices. He noted that bringing petroleum products under the ambit of the Goods and Services Tax (GST) is one among them. He said “I have already categorically stated on this issue several times.” Besides, he also pointed out that the present oil price hike is due to three main factors - hike in international price of crude, fluctuation in dollar and Indian currency ratio and some of the tax issues are also there.

However, Pradhan did not respond to a query on the timeline by when petroleum products could be brought under GST.  He also refused to say if the government is planning a cut in excise duty to provide relief to consumers. The government had raised excise duty on petrol by Rs 11.77 a lire and that on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.

Petrol and diesel prices continued the upward trend for the 16th consecutive day on Tuesday, even as global crude oil prices receded from record high levels. Petrol in Delhi costs Rs 78.43 a litre and diesel is priced at Rs 69.31. Delhi has the lowest fuel price among all metros and most state capital due to lower incidence of local sales tax or VAT.

The CNX Nifty is currently trading at 10695.50, up by 6.85 points or 0.06% after trading in a range of 10663.95 and 10696.45. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.68%, BPCL up by 1.82%, Sun Pharma up by 1.67%, Larsen & Toubro up by 1.61% and Lupin was up by 1.60%. On the flip side, Vedanta down by 2.13%, SBI down by 1.23%, Bharti Infratel down by 1.19%, ICICI Bank down by 1.09% and UPL was down by 0.82% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 193.2 points or 0.86% to 22,287.89, Hang Seng declined 190.95 points or 0.62% to 30,601.31, Taiwan Weighted losses 28.99 points or 0.26% to 10,958.78, Shanghai Composite dropped 18.49 points or 0.59% to 3,116.59 and KOSPI Index was down by 13 points or 0.52% to 2,465.96.