Markets trade at day's low; Nifty below 11,500 mark

Extending their early losses, the local equity markets continued weak trade and were now trading at day’s low points in afternoon session, on negative global cues, widening current account deficit as rupee continued its fall to hit a fresh record low. Sentiment on the street further weakened with the State Bank of India’s (SBI) report that with the currency losing more than 11% to the dollar this year, India will have to shell out an extra Rs 68,500 crore when repaying short-term debt in the coming months. Some cautiousness also crept in with a report that total liabilities of the government increased to Rs 79.8 lakh crore at end-June 2018 from Rs 77.98 lakh crore at end-March 2018. Public debt accounted for 89.3% of total outstanding liabilities at end-June 2018 with internal debt accounting for 83.0% share. Nearly 24.9% of the outstanding dated securities had a residual maturity of less than five years. On the sectoral front, insurance sector remained in limelight after Assocham-APAS study stated that the Indian insurance industry is expected to grow to $280 billion by 2019-20 aided by the government's flagship Ayushman Bharat and increasing awareness about need for protection.

On the global front, Asian markets were trading mostly in red, on growing fears of an all-out trade war between the world's top two economies. Back home, the BSE Sensex is currently trading at 38004.69, down by 385.13 points or 1.00% after trading in a range of 37970.18 and 38354.52. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.16%, while Small cap index was down by 0.75%.

The only gaining sectoral indices on the BSE were IT up by 0.21% and TECK up by 0.03%, while FMCG down by 1.58%, Basic Materials down by 1.33%, Consumer Durables down by 1.32%, Metal down by 1.30% and Realty down by 1.27% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 0.73%, NTPC up by 0.62%, Axis Bank up by 0.36%, Adani Ports &SEZ up by 0.29% and Infosys up by 0.14%. On the flip side, Indusind Bank down by 2.44%, Sun Pharma down by 2.34%, Vedanta down by 2.14%, SBI down by 2.12% and Kotak Mahindra Bank down by 2.05% were the top losers.

Meanwhile, concerned by almost fourfold rise in the goods and services tax (GST) compensation to States for June-July, the Finance Ministry is making a strategy to shore up GST revenues and working with states to identify issues hindering their collections. There has been a spike in the bi-monthly GST compensation paid to the states by the Centre. The Centre paid Rs 149.3 billion to compensate states for revenue loss incurred in June and July, a nearly four-fold jump compared to Rs 38.99 billion paid for the months of April and May.

The amount of compensation to be paid to each state varies every month and there is no set pattern. The reason for increased compensation also varied from state to state. For instance, in one of the cases, a state saw a huge outgo on account of VAT refund following a court verdict. One of the options being considered is stepping up anti-evasion measures with a focus on top 30 taxpayers, but added that the Centre will ensure that the fix to the problem will not be intrusive on businesses. Data analytics will be put to use to examine the profile of top 30 taxpayers to study their tax payment pre and post GST implementation.

The Finance Ministry has targeted monthly GST collections to be Rs 1 trillion for this fiscal, but the actual mop up has fallen short of the target month after month. The only exception was the month of April in which the numbers exceeded Rs 1 trillion. The collections stood at Rs 940.16 billion in May, Rs 956.1 billion in June, Rs 96.48 billion in July and Rs 93.96 billion in August. The Centre had agreed to compensate the states for revenue loss on account of GST implementation for a period of five years.

The CNX Nifty is currently trading at 11458.00, down by 131.10 points or 1.13% after trading in a range of 11453.85 and 11573.00. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 1.44%, NTPC up by 0.77%, Wipro up by 0.62%, Axis Bank up by 0.57% and Lupin up by 0.48%. On the flip side, Bajaj Finance down by 3.13%, Ultratech Cement down by 2.97%, Indiabulls Housing Finance down by 2.90%, Bajaj Finserv down by 2.81% and BPCL down by 2.80% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 17.86 points or 0.57% to 3,116.53, Taiwan Weighted shed 121.19 points or 1.13% to 10,725.80, Hang Seng dropped 487.06 points or 1.84% to 26,486.41, Shanghai Composite fell 33.69 points or 1.26% to 2,668.61 and Jakarta Composite was down by 28.54 points or 0.49% to 5,822.93.

On the flip side, KOSPI increased 7.08 points or 0.31% to 2,288.66 and Nikkei 225 was up by 66.03 points or 0.3% to 22,373.09.