Benchmarks end choppy session in red terrain

Indian equity benchmarks ended the choppy day with a cut of one third of a percent and frontline gauges settled below their crucial 10,750 (Nifty) and 35,500 (Sensex) levels, as traders looked ahead to the Bank of England and OPEC meetings for direction. Markets soon after positive start pared all of their gains to trade flat for most part of the day as traders remained on sidelines ahead outcome of the markets regulator SEBI’s meeting where it will discuss proposed overhaul of governance norms for market infrastructure institutions as well as amendments to buyback and takeover norms. Other proposals, including reducing the cooling off period for former employees to one year and review of the watchdog’s recruitment policy, are also on the agenda. Traders remained little concerned with former NASSCOM president R Chandrashekhar sounding a note of caution on the economy, saying it could bedisrupted if job growth was not constant. He said government statistics showed that nearly four million jobs in the formal sector were created from September 2017 to March 2018, of which about 50% were in the service sector.

Investors took note of report stating that FII flows have seen a bumpy ride so far this year, with a meagre investment of $15 million, while domestic institutional investors (DIIs) continue to invest more aggressively into the Indian equity market and have bought net assets worth $7.9 billion. Losses remained capped with a private report stating that the credit growth in the micro, small and medium enterprises (MSME) sector is improving with the overall exposure reaching the highest level in over a year and impacts of demonetisation and the GST also seem to be subsiding. As per the report the overall credit exposure has shown the highest growth in last five quarters at Rs 54.20 trillion as of March 31, 2018, with MSMEs segment constituting Rs 12.6 trillion (23%) of the commercial credit outstanding. Meanwhile, India has hiked customs duty on several goods, including Bengal gram, lentils and artemia, imported from the US. The import duty hike would be effective from August 4.

On the global front, European markets are trading in red terrain in early deals amid looming threat of a full-blown trade war between the world's two largest economies. In response to US President Donald Trump's decision to impose tariffs on EU steel and aluminum, the European Union will start charging import duties of 25% on a range of US products on Friday. Asian markets ended in red, as the potential for a deepening trade dispute with the US taking the edge off of traders’ appetite in the China.

Back home, coal stocks remained in focus on a private report stating that India's thermal coal import is likely to increase to 145 million tonne (MT) in 2018, and the uptrend would continue in the next four years. The report noted that the outlook for thermal coal import demand in India is improving due to strong demand growth and the inability of domestic supply to keep pace. However, cement stocks ended in red terrain, on concerns of a delay in the pickup of demand trends, lower-than-expected pricing realizations and higher-than-expected increases in costs.

Finally, the BSE Sensex declined 114.94 points or 0.32% to 35,432.39, while the CNX Nifty was down by 30.95 points or 0.29% to 10,741.10.

The BSE Sensex touched a high and a low of 35,678.69 and 35,396.97, respectively and there were 8 stocks on gaining side as against 23 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.53%, while Small cap index was down by 0.79%.

The few gaining sectoral indices on the BSE were Energy up by 0.85% and Oil & Gas was up by 0.60%, while Telecom down by 1.61%, Healthcare down by 1.11%, Capital Goods down by 1.09%, Metal down by 0.98% and Basic Materials was down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.47%, Reliance Industries up by 1.22%, HDFC up by 0.35%, Tata Motors up by 0.31% and Infosys up by 0.24%. On the flip side, Mahindra & Mahindra down by 2.11%, ONGC down by 1.90%, Power Grid Corporation down by 1.88%, Sun Pharma down by 1.67% and SBI down by 1.67% were the top losers.

Meanwhile, the Central Board of Indirect Taxes and Customs (CBIC) said that the government cleared pending Goods and Service Tax (GST) refunds to the tune of Rs 38,062 crore of exporters as on June 16, 2018. Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involves refund of GST paid on purchase of inputs. CBIC highlighted that in all, Rs 21,142 crore (IGST refunds), Rs 9,923 crore (RFD-01A refund by CBIC) and Rs 6,997 crore (RFD-01A refund by states), all totalling Rs 38,062 crore has been sanctioned.

During the refund fortnight, the government cleared the pending refunds of integrated GST (IGST) of exporters based on shipping bill. Also those businesses making zero rated supplies or those wanting to claim input credit, and filled up Form RFD-01A were also given refunds.

The CBIC underlined that as on June 16, Rs 6,087 crore of IGST refunds has been sanctioned in the refund fortnight. Besides, RFD-01A claims worth Rs 1,548 crore were sanctioned by the centre and Rs 2,290 crore by the states during the fortnight. This is out of the Rs 9,816 crore RFD-01A refund claims received by the centre as on April 30, 2018. Therefore, the total IGST and RFD-01A refund claims sanctioned by the government during the refund fortnight was Rs 9,925 crore.  The amount of RFD-01A refund claims disposed as on June 16, by the centre stood at Rs 10,824 crore and by the states at Rs 7,287 crore. Thus, the total amount of RFD-01A claims disposed off stands at Rs 18,111 crore.

Last month, the government had said about Rs 14,000 crore of refunds of exporters were stuck on account of various mismatches. The CBIC had organised the special refund drive to fast track clearances.

The CNX Nifty traded in a range of 10,809.60 and 10,725.90. There were 16 stocks in green as against 34 stocks in red on the index.

The top gainers on Nifty were Indian Oil Corporation up by 4.02%, BPCL up by 3.73%, HPCL up by 3.41%, ICICI Bank up by 1.62% and Reliance Industries up by 1.21%. On the flip side, Mahindra & Mahindra down by 2.36%, Bharti Infratel down by 2.23%, Dr. Reddy’s Lab down by 2.10%, Titan Company down by 1.95% and Sun Pharma down by 1.90% were the top losers.

The European markets were trading mostly in red; Germany’s DAX declined 120.59 points or 0.96% to 12,574.57 and France’s CAC decreased 20.76 points or 0.39% to 5,351.55. However, UK’s FTSE 100 was up by 2.13 points or 0.03% to 7,629.53.

Asian equity markets ended mostly lower on Thursday as caution prevailed amid lingering worries over Sino-US trade spat. Oil prices eased a touch as nerves grew ahead of Friday's meeting between OPEC and other big producers, including Russia, with growing expectations that the Vienna talks could result in an agreement to increase crude supplies. Speculation of imminent monetary policy easing in China helped to limit overall losses to some extent. Chinese shares ended lower as trade war woes overshadowed media reports that Beijing will undertake measures to boost credit supply to smaller companies. Meanwhile, Japanese shares eked out modest gains as the yen weakened and technology stocks followed their US peers higher.