Markets continue choppy trade in noon session

Indian equity benchmarks continued their choppy trade in afternoon session, tracking global weakness as worries of a trade war between the US and China resurfaced. Traders remained worried with rating agency Moody’s sounding a note of caution that any reduction in excise duty on petrol and diesel would adversely affect fiscal deficit unless it is matched by a commensurate cut in expenditure. Observing that fiscal consolidation would be closely watched for assigning the sovereign rating, Moody’s said India’s biggest challenge is its fiscal strength which is relatively low as compared to -- Baa -- rated peers. Some caution also prevailed in the market with a private report stating that growth in the current fiscal year will be faster in the first half and will likely face pressure in the second half to end the year at 7.5%. However, traders found some support from report that Prime Minister Narendra Modi wants to lift India’s economic growth rate to double digits after it recovered to a seven quarter high of 7.7% in the March quarter, with the onus on states to do their bit to contribute to the effort while cautioning the country that the task will be challenging. On the sectoral front, Shares of oil retailers were trading higher after crude fell for second day in a row ahead of OPEC meet to discuss whether to relax oil output caps. Moreover, Auto sector stocks remained in focus on report that with the presence of several automobile companies on the outskirts of Chennai, the need for advanced manufacturing technology was more in the region.

On the global front, Asian markets were trading in red, amid worries about trade tensions as the U.S. and China both started putting tariffs in motion. Back home, the BSE Sensex is currently trading at 35614.35, down by 7.79 points or 0.02% after trading in a range of 35529.25 and 35721.55. There were 13 stocks advancing against 17 stocks declining on the index.

On the global front, Asian markets were trading in red, amid worries about trade tensions as the U.S. and China both started putting tariffs in motion. Back home, the BSE Sensex is currently trading at 35614.35, down by 7.79 points or 0.02% after trading in a range of 35529.25 and 35721.55. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.12%, while Small cap index was down by 0.60%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.35%, Auto up by 0.70%, Energy up by 0.39%, Bankex up by 0.37% and PSU up by 0.30%, while Metal down by 2.44%, Basic Materials down by 1.42%, Healthcare down by 0.51%, Capital Goods down by 0.39% and Industrials down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.75%, Tata Motors up by 1.58%, Tata Motors - DVR up by 1.36%, Mahindra & Mahindra up by 1.22% and Bajaj Auto up by 1.19%. On the flip side, Vedanta down by 2.99%, Tata Steel down by 2.72%, Kotak Mahindra Bank down by 1.61%, Coal India down by 1.47% and HDFC Bank down by 0.68% were the top losers.

Meanwhile, State Bank of India (SBI) Research in its latest report has stated that Indian states are expected to gain an additional revenue of Rs 37,426 crore in the financial year 2019, on the back of sharp increase in crude oil prices over the last few months and better tax collection under Goods and Service Tax (GST) regime. It also found that on an aggregate level, the states have gained Rs 18,698 crore in additional revenue in FY18. Besides, it observed that the impact of GST on tax earnings is minimum except for in a few states.

According to the report, out of 24 states, revenues of 16 States have increased more than 14 percent baseline/ mutually accepted minimum tax growth rate between the Centre and the states post-GST rollout below which the states have to be compensated. It indicated that post-GST implementation in July last year, the tax revenue of the states has gone up in FY18 due to increased tax compliance and broader tax base. It noted that Gujarat, Haryana, Maharashtra, Chhattisgarh, Jharkhand and Punjab have gained the maximum due to GST.

However, the report pointed out that certain States like Karnataka, Bengal, UP, MP and Assam have reported a decline in tax collection post-GST, due to the changes in the nature of taxation as GST has subsumed indirect taxes such as service tax, VAT, excise duty, entry tax, entertainment tax into one, including the taxes under the Centre and the states which contribute to an aggregate of over 55 percent of tax revenue of these states.

Expecting the need to optimize tax revenue for funding social security programmes, SBI Research said that there is a need to insulate consumers from adverse price shocks. The report concluded that states could come forward and rationalise their VAT rates. After all, crude price falling much below $70 a barrel looks uncertain now.  

The CNX Nifty is currently trading at 10815.45, down by 2.25 points or 0.02% after trading in a range of 10787.35 and 10830.20. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were HPCL up by 5.14%, Indian Oil Corp. up by 4.65%, ICICI Bank up by 3.65%, BPCL up by 2.56% and Tata Motors up by 1.63%. On the flip side, Vedanta down by 3.16%, Hindalco down by 2.93%, Tata Steel down by 2.79%, Lupin down by 2.16% and Kotak Mahindra Bank down by 1.59% were the top losers.

All the Asian markets were trading in red; Nikkei 225 decreased 171.42 points or 0.75% to 22,680.33, KOSPI Index was down by 27.8 points or 1.16% to 2,376.24 and FTSE Bursa Malaysia KLCI shed 14.97 points or 0.85% to 1,746.81.