Benchmarks retreat from record high; Sensex breaches 38K mark

Indian equity benchmarks made a pessimistic start and are trading marginally in red in early deals, as traders remained on sidelines ahead of industrial production data for June scheduled to be announced post market hours. Investors also remained cautious after data released by the India Meteorological Department (IMD) showed that 39 percent of the 681 districts in India have received less than normal rainfall in the week ended August 8. However, losses remained capped with the Lok Sabha passing four bills to amend the GST law, as Finance Minister Piyush Goyal said lower tax rates will improve compliance and enhance revenue collection. He said tax collection will not come down despite reduction in taxes as he allayed the concerns to that effect raised by some members and added that the lower rates will rather improve compliance and enhance revenue collection.

Global cues remained sluggish with most of the Asian counters trading in red at this point of time amid heightened global trade tensions. The US markets ended mostly lower on Thursday, as traders remained reluctant to make significant moves as they weigh lingering trade war concerns against largely upbeat corporate earnings news.

Back home, pharma stocks edged lower despite report that India’s pharmaceutical exports grew merely 3 percent to $17.3 billion in 2017-18 due to increasing regulatory concerns and pricing pressures in the global markets, including the US. In scrip specific developments, Eicher Motors surged on reporting 25% rise in Q1 consolidated net profit  and PNB Housing Finance gained on getting nod to raise Rs 7,000 crore via NCDs.

The BSE Sensex is currently trading at 37971.51, down by 52.86 points or 0.14% after trading in a range of 37918.35 and 38051.45. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.07%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Auto up by 0.48%, Consumer Durables up by 0.47%, Capital Goods up by 0.38%, Consumer Discretionary Goods & Services up by 0.30% and Realty was up by 0.29%, while PSU down by 0.43%, Energy down by 0.34%, Bankex down by 0.30%, Metal down by 0.24% and Oil & Gas was down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.86%, Bharti Airtel up by 1.40%, Asian Paints up by 0.93%, Mahindra & Mahindra up by 0.78% and Larsen & Toubro was up by 0.52%. On the flip side, SBI down by 1.52%, Coal India down by 1.20%, Axis Bank down by 1.09%, Sun Pharma down by 0.86% and Tata Steel was down by 0.72% were the top losers.

Meanwhile, expressing optimism over the new indirect tax regime, interim Finance Minister Piyush Goyal has said that lower Good and Services Tax (GST) rates will improve compliance and enhance revenue collection. Allaying concerns over tax collection, he said that tax collection will not come down despite reduction in taxes. Goyal said GST, which came into force from July 01, 2017, on about 400 goods and 68 services were reduced in the last one year. He added that they are empowering 125 crore people of India through Good and Simple Tax.

On the problems faced by the textile sector, the minister said the GST Council has resolved most of the problems of the sector. With the introduction of GST, textile has become cheaper. While moving the bill for consideration, he said the capacity to slash the GST rates on more items would go up as GST revenues and the compliance rate increases and the economy formalises. He also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.

Besides, the Lok Sabha has passed four bills to amend the GST law. The move aims at plugging loopholes in existing laws and reducing the compliance burden for taxpayers. The four bills are the Central GST (Amendment) Bill, Integrated GST (Amendment) Bill, GST (Compensation to States) Amendment Bill and Union Territory GST (Amendment) Bill.

The CNX Nifty is currently trading at 11456.10, down by 14.60 points or 0.13% after trading in a range of 11441.65 and 11478.75. There were 22 stocks advancing against 27 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Eicher Motors up by 3.30%, Yes Bank up by 1.85%, UPL up by 1.49%, Bharti Airtel up by 1.16% and Mahindra & Mahindra was up by 0.88%. On the flip side, SBI down by 1.91%, Grasim Industries down by 1.69%, Axis Bank down by 1.25%, Sun Pharma down by 1.13% and Coal India was down by 1.11% were the top losers.

Asian markets are trading mostly in red; Straits Times declined 40.20 points or 1.22% to 3,286.54, Taiwan Weighted slipped 36.30 points or 0.33% to 10,991.77, KOSPI dropped 18.64 points or 0.82% to 2,285.07, Nikkei 225 lost 114.39 points or 0.51% to 22,484.00, Shanghai Composite tumbled 3.85 points or 0.14% to 2,790.53 and Hang Seng was down by 132.92 points or 0.47% to 28,474.38. On the flip side, Jakarta Composite was up by 32.03 points or 0.53% to 6,097.29.