Weak trade persists on Dalal Street; Sensex loses over 200 points

Tracking weak European markets, Indian equity benchmarks remained weak in late afternoon session, with both Sensex Nifty losing more than 200 and 70 points, respectively. Following the larger peers, the broader markets too continued their lackluster trade with the losses of more than 1%. Besides, heavy selling almost in all the sectors along with losses led by major industry losers like Vedanta, Indusind Bank and Mahindra & Mahindra, kept the markets down. Anxiety remained among traders with Commerce and Industry Minister Suresh Prabhu’s statement that global trade is facing headwinds and these challenges are needed to be tackled properly to boost world economy. He also said that the US decision to impose high import duties on certain steel and aluminium products have led to a trade war kind of situation, with other countries too raising their tariff walls. Some concerns also came with Commerce Secretary Rita Teaotia’s statement that exporters, particularly from the food and agriculture sectors, should strictly comply with global norms for quality and standards, or else they might lose their export market share to other countries. Separately, former chairman of the empowered committee on GST, Amit Mitra said that around Rs 25,000 crore refund is pending for the exporters while more than 3 lakh applications seeking refunds have piled up with the central government. He also said that the exporters are suffering hugely for this.

On the global front, European markets were trading in red, as US President Donald Trump threatened more tariffs on Chinese goods in an escalating tit-for-tat trade war between the world’s two biggest economies. Asian markets were also trading in red. Back home, in scrip specific development, Power Mech Projects gained on receiving Letter of Intent/Work Orders worth Rs 500 crore.

The BSE Sensex is currently trading at 35338.67, down by 209.59 points or 0.59% after trading in a range of 35290.96 and 35552.47. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.10%, while Small cap index was down by 1.30%.

The top losing sectoral indices on the BSE were Metal down by 1.88%, Realty down by 1.69%, Basic Materials down by 1.67%, Energy down by 1.54% and Oil & Gas down by 1.21%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were HDFC up by 0.62%, ONGC up by 0.55%, HDFC Bank up by 0.53%, ITC up by 0.51% and Bharti Airtel up by 0.20%. On the flip side, Vedanta down by 3.57%, Indusind Bank down by 2.24%, Mahindra & Mahindra down by 1.79%, SBI down by 1.79% and Adani Ports & SEZ down by 1.78% were the top losers.

Meanwhile, highlighting various benefits of historic tax reform, the Goods and Service Tax (GST), Finance Ministry has said that the new tax reform has resulted in formalization of economy and consequently information flow would eventually augment not only the Indirect Tax collections but also Direct Tax collections. Besides, the Ministry said that under the GST, there will be now seamless flow of availability of common set of data to both the Centre and the States making Direct and Indirect Tax collections more effective.

The Ministry further mentioned that GST is creating employment in formal sector and also eliminating transactions which are not recorded earlier in the books of accounts and thus, were outside the tax net so far.  Besides, it said that the major tax reform is aimed to bring better tax compliance, transparency in tax system and it would make increasingly difficult for businesses to remain outside the tax net.

It also underlined the efforts being taken by the government for further simplification of GST structure, with an aim to facilitate the tax payers and to extend benefit to the customers, adding that an extensive exercise was undertaken for tax payers education & facilitation by way of knowledge sharing, dissemination of information and replies to FAQs among others.

The CNX Nifty is currently trading at 10721.85, down by 78.00 points or 0.72% after trading in a range of 10708.55 and 10789.45. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 1.42%, GAIL India up by 1.12%, HDFC up by 0.74%, HDFC Bank up by 0.52% and Dr. Reddy’s Lab up by 0.44%. On the flip side, Vedanta down by 3.55%, Hindalco down by 3.03%, Indian Oil Corporation down by 2.99%, BPCL down by 2.62% and HPCL down by 2.51% were the top losers.

All Asian markets were trading in red; Nikkei 225 declined 401.85 points or 1.80% to 22,278.48, Hang Seng was down 841.34 points or 2.86% to 29,468.15, Taiwan Weighted dropped 183.28 points or 1.68% to 10,904.19, Shanghai Composite lost 115.47 points or 3.97% to 2,906.43, KOSPI was down by 36.13 points or 1.54% to 2,340.11 and Straits Times shed 17.03 points or 0.51% to 3,307.01.

All European markets were trading in red; Germany’s DAX decreased 206.58 points or 1.64% to 12,627.53, France’s CAC was down 69.15 points or 1.28% to 5,381.33 and UK’s FTSE 100 decreased 49.86 points or 0.66% to 7,581.47.