Benchmarks trade flat in morning session

Indian equity benchmarks were trading flat in morning session ahead of June F&O expiry. Traders took note of stating chief economic adviser Arvind Subramanian’s statement that apart from high oil prices, the biggest headwind for India’s growth prospects was stigmatised capitalism, or the view that the private sector could not be trusted. Meanwhile, the Indian rupee collapsed to a lifetime low against the US dollar in early trade as rising crude oil prices deepened concerns about the country's current account deficit and inflation dynamics. Traders shrugged off a private report highlighting that revenues of micro, small and medium enterprises surged by 27% and operating profit by 66% in 2017-18, signaling that vibrancy is returning to the sector after challenges posed by demonetisation and GST rollout. Market men failed to draw any sense of relief from interim Finance Minister Piyush Goyal’s statement that cabinet has approved establishment of two strategic petroleum reserves (SPRs) with a total capacity of 6.5 mln tonnes. India has built three SPR of 5.33 million tonnes in southern India equivalent to meet 10 days of crude requirement. Meanwhile, commerce ministry has said that trade events are being organised in African, Central and South American countries to explore new markets with a view to boost the country's exports.

On the Global front, Asian markets were trading mixed, as investors worried that the Trump administration's approach to trade is harming global economic growth - even as the White House approach to Chinese investment in US technology companies appeared to be softening. Back home, in the scrip specific development, Lupin advanced on partnering Mylan to commercialize Enbrel (Etanercept) Biosimilar. Besides, GMR Infrastructure gained with arm emerging successful bidder to develop commercial port.

The BSE Sensex is currently trading at 35243.86, up by 26.75 points or 0.08% after trading in a range of 35126.85 and 35282.40. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.11%, while Small cap index was down by 0.44%.

The top gaining sectoral indices on the BSE were Metal up by 0.55%, TECK up by 0.55%, IT up by 0.52%, Telecom up by 0.38% and Healthcare was up by 0.30%, while Realty down by 1.58%, Capital Goods down by 0.94%, Consumer Durables down by 0.79%, Utilities down by 0.78% and Oil & Gas was down by 0.77% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.20%, Infosys up by 2.04%, Vedanta up by 1.41%, Tata Steel up by 1.21% and HDFC Bank was up by 0.88%. On the flip side, ICICI Bank down by 1.76%, Coal India down by 1.61%, Larsen & Toubro down by 1.38%, Tata Motors - DVR down by 1.36% and Power Grid Corporation was down by 1.22% were the top losers.

Meanwhile, indicating need to step up more efforts in days ahead to collect tax, the Goods and Services Tax (GST) investigation wing has detected tax evasion of over Rs 2,000 crore in two months. India has registration of more than 1 crore businesses but only 1% of total registration paying 80% of the taxes. Central Board of Excise and Customs (CBIC) member John Joseph said alike small businesses who are making mistakes while filing GST returns, multinationals and big corporates too have slip-ups.

Joseph, who is also the Director General of Goods and Services Tax Intelligence (DG GSTI), stated that the analysis of composition dealers data shows that most of them have an annual turnover of Rs 5 lakh. He added that this shows that a lot of compliance is required.

Under the composition scheme, traders and manufacturers are allowed to pay taxes at a reduced rate of 1%, while restaurant owners have to pay at 5% rate. The scheme is open for manufacturers, restaurateurs and traders whose turnover does not exceed Rs 1.5 crore. Joseph further said investigation has revealed that a modus operandi is being followed whereby fake invoices are being generated for goods which have not been supplied at all. Based on these invoices, some entities are claiming input tax credit. Besides, without actually exporting goods, some entities are claiming GST refunds based on fake invoices.

The CNX Nifty is currently trading at 10665.05, down by 6.35 points or 0.06% after trading in a range of 10632.40 and 10674.20. There were 24 stocks advancing against 25 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.07%, Infosys up by 1.78%, ONGC up by 1.25%, Tata Steel up by 1.18% and Vedanta was up by 1.17%. On the flip side, Titan Company down by 2.81%, Tech Mahindra down by 2.75%, HPCL down by 2.49%, GAIL India down by 2.43% and Grasim Industries was down by 1.89% were the top losers.

Asian markets are trading mixed; Taiwan Weighted slipped 19.11 points or 0.18% to 10,681.92, KOSPI decreased 25.60 points or 1.11% to 2,316.43 and Jakarta Composite was down by 94.68 points or 1.66% to 5,692.87. On the flip side, Nikkei 225 advanced 18.54 points or 0.08% to 22,290.31, Straits Times gained 3.39 points or 0.10% to 3,258.16, Hang Seng increased 151.07 points or 0.53% to 28,507.33 and Shanghai Composite was up by 6.71 points or 0.24% to 2,819.89.