Weak trade persists in afternoon deals

Weak trade continued on the street in late afternoon session, with Sensex and Nifty losing more than 150 and 50 points, respectively, tracking weak opening of European markets. Domestic sentiments were under pressure, with Fitch Ratings' latest report that its outlook on the Indian banking sector is likely to remain negative until the banks address their weak core capital positions against mounting bad loans and poor financial performance. Separately, bad loans in the education sector have shown a rising trend in the past three financial years with NPAs nearing 9% of the outstanding by March 2018. Traders took note of GSTN CEO’s statement that the IT backbone of the Goods and Services Tax (GST) was not given enough time to prepare a system to the satisfaction of the GSTN which led to the glitches in the implementation of the new tax regime.

The street failed to take any sense of relief a report that the Monsoon session of Parliament, which ended on August 10, 2018, was the most productive’ for Lok Sabha since 2000. According to the data report, 20 bills were introduced during the session and 12 were passed. India’s firm industrial output data also failed to support the markets. India’s industrial production measured by Index of Industrial Production (IIP) picked up space and accelerated to 7% in the month of June 2018, on the back of strong growth in manufacturing and capital goods sector. On the sectoral front, pharma stocks were higher, aided by Pharmexcil’s (a body under Union Commerce Ministry) report that pharmaceutical exports from the country are expected to cross $19 billion in worth during the current fiscal despite muted growth in the North American markets.

On the global front, European markets were trading in red, as Concerns over global trade and the banking crisis in Turkey weighed on sentiment. Besides, the European Central Bank raised concerns over the impact of a weak lira on European banks. The street paid no heed towards a report that UK economic growth doubled in the second quarter driven by stronger growth in both services and construction sectors. The first quarterly estimate from the Office for National Statistics showed that Gross domestic product rose 0.4%, faster than the 0.2% expansion seen in the first quarter. Asian markets were also trading in red. Back home, in scrip specific development, Hester Biosciences gained after the company received an approval for issuance of equity shares, and/or equity linked securities and/or securities convertible into equity shares through Qualified Institutional Placement (QIP) or preferential allotment for an amount not exceeding Rs 100 crore.

The BSE Sensex is currently trading at 37698.05, down by 171.18 points or 0.45% after trading in a range of 37559.26 and 37799.54. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.48%, while Small cap index was down by 0.48%.

The top gaining sectoral indices on the BSE were IT up by 1.10%, TECK up by 0.71%, Healthcare up by 0.50%, Consumer Durables up by 0.47% and FMCG up by 0.34%, while PSU down by 1.14%, Bankex down by 1.07%, Oil & Gas down by 1.02%, Energy down by 0.99% and Realty down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.74%, Sun Pharma up by 1.56%, Mahindra & Mahindra up by 1.52%, Infosys up by 1.50% and Wipro up by 0.88%. On the flip side, Vedanta down by 3.71%, SBI down by 2.71%, Yes Bank down by 2.43%, Tata Motors - DVR down by 2.43% and HDFC down by 1.47% were the top losers.

Meanwhile, the Union government has paid total Rs 52,077 crore as Goods and Services Tax (GST) compensation to the States/UTs during the period from July, 2017 to May, 2018, for the reported revenue deficit on account of implementation of GST.

As per the Ministry of Finance, States/UTs have been paid GST Compensation of Rs 48178 crore for the period of July 2017 to March, 2018 and Rs 3899 crore for the period of April-May, 2018. It also listed the States/UTs which has received GST Compensation during April- May, 2018 such as Bihar (received Rs 325 crore), Chhattisgarh (Rs 257 crore), Goa (Rs 28 crore), Gujarat (Rs 174 crore), Himachal Pradesh (Rs 225  Crore) , J & K (Rs 147 crore), Jharkhand (Rs 76 crore), Karnataka (Rs 792 crore), Kerala(Rs 67 crore), Madhya Pradesh (Rs 130 crore), Odisha (Rs 282 crore), Puducherry (Rs 79 crore), Punjab (Rs 944 crore), Rajasthan (Rs 106 crore), Tripura (Rs 2 crore) and Uttarakhand (received Rs 265 crore).

As per provisions in Section 7 of the GST (Compensation to States) Act, 2017 loss of revenue to the States on account of implementation of Goods and Services Tax shall be payable during transition period and compensation payable to a State shall be provisionally calculated and released at the end of every two months during transition period of 5 years.

The CNX Nifty is currently trading at 11371.45, down by 58.05 points or 0.51% after trading in a range of 11340.30 and 11406.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 3.91%, Tech Mahindra up by 2.19%, Grasim Industries up by 1.98%, Sun Pharma up by 1.74% and Coal India up by 1.74%. On the flip side, Indiabulls Housing Finance down by 3.91%, Vedanta down by 3.76%, BPCL down by 3.44%, HPCL down by 2.87% and SBI down by 2.71% were the top losers.

All Asian markets were trading in red; Straits Times decreased 34.97 points or 1.08% to 3,249.81, Nikkei 225 fell 440.65 points or 2.02% to 21,857.43, Jakarta Composite plunged 212.41 points or 3.62% to 5,864.76, Taiwan Weighted lost 234.76 points or 2.18% to 10,748.92, Hang Seng dipped 430.05 points or 1.54% to 27,936.57, KOSPI declined 34.34 points or 1.53% to 2,248.45 and Shanghai Composite was down by 9.06 points or 0.33% to 2,786.25.

All European markets were trading in red; UK’s FTSE 100 decreased 36.89 points or 0.48% to 7,630.12, France’s CAC fell 11.44 points or 0.21% to 5,403.24 and Germany’s DAX was down by 60.09 points or 0.49% to 12,364.26.