Local equities continue weak trade in morning deals

Local equity benchmarks magnified losses to continue its weak trade in the morning session hovering near the lowest point of the day on account of selling in frontline counters. A level of pressure was seen on frontline stocks, especially Yes Bank, Tata Motors and Sun Pharma. Traders remained cautions with former chief economic advisor Kaushik Basu’s statement that distress in some sectors of the economy has slowed India’s GDP growth, the consequences of which could be ‘far reaching’. He said distress has been ‘very much visible in the agriculture sector’ as the ‘condition of farmers is bad’. The country’s economy grew at 7.1 per cent in July-September, the lowest in three quarters. Investors ignored a private report that a group of state finance ministers might recommend raising the turnover threshold for the goods and services tax (GST) from the current Rs 20 lakh to Rs 75 lakh, in a move that would give lakhs of micro and small enterprises the option to be outside the ambit of GST. Besides, a report also stated that Indian officials will hold bilateral meetings with a few countries, including China and some ASEAN members, to iron out issues hindering negotiations of Regional Comprehensive Economic Partnership (RCEP) mega trade deal.

On the global front, Asian markets were trading in red, after President Donald Trump said that there was ‘nothing new’ in efforts to end the partial government shutdown over a US-Mexico border wall. Back home, Autoline Industries zooms on entering into MOU with Poddar Habitat. Besides, V-Mart Retail surged on opening new fashion store in Uttar Pradesh.

The BSE Sensex is currently trading at 35079.18, down by 390.97 points or 1.10% after trading in a range of 35010.82 and 35443.99. There were 31 stocks declining on the index, while there were no gainers.

The broader indices were trading in red; the BSE Mid cap index slipped 1.50%, while Small cap index was down by 1.59%.

The top losing sectoral indices on the BSE were Realty down by 1.91%, IT down by 1.52%, Healthcare down by 1.45%, Capital Goods down by 1.36% and Basic Materials was down by 1.35%, while there were no gainers on the BSE.

The top losers on the Sensex were Yes Bank down by 3.43%, Sun Pharma down by 2.53%, Tata Motors down by 2.23%, Bajaj Finance down by 2.14% and Tata Motors - DVR was down by 2.08%, while there were no gainers on the BSE.

Meanwhile, after cuts in the goods and services tax (GST) rates in last week, Finance Minister and GST Council Chairman Arun Jaitley has raised hopes of further pruning the peak rate (28%) and merging the 12% and 18% slabs. Though, the single standard rate will take some time after GST revenues see a ‘significant’ rise’.  He added that the 28% slab is now a dying slab.  At present, 28 items, including luxury and sin goods, auto parts, dishwashers, air conditioners (ACs), and cement remain in the highest slab.

He said the next priority will be to transfer cement to a lower slab. He underlined ‘with the GST transformation completed, we are close to completing the first set of rates of rationalisation, i.e. phasing out the 28 per cent slab except in luxury and sin goods’.

Among the items under the 28 % rate, the ones used by the mass population are cement and auto parts. The rates on these items were not cut in the last meeting on account of revenue implications of Rs 330 billion. While the cement cut will hit the exchequer by Rs 130 billion, auto parts will have a bearing of Rs 200 billion of revenues.

The CNX Nifty is currently trading at 10558.90, down by 104.60 points or 0.98% after trading in a range of 10534.55 and 10635.45. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.22%, Adani Ports & SEZ up by 1.34%, HPCL up by 1.10%, Indian Oil Corporation up by 0.85% and Hero MotoCorp was up by 0.53%. On the flip side, Yes Bank down by 3.48%, Indiabulls Housing Finance down by 2.78%, Sun Pharma down by 2.60%, Tata Motors down by 2.26% and IndusInd Bank was down by 2.07% were the top losers.

All Asian markets were trading in red, Nikkei 225 slipped 182.85 points or 0.95% to 18,972.89, Taiwan Weighted dropped 26.95 points or 0.28% to 9,500.14, KOSPI fell 37.66 points or 1.83% to 2,017.35, Shanghai Composite declined 5.95 points or 0.24% to 2,498.87, Straits Times trembled 43.01 points or 1.41% to 3,008.05 and Jakarta Composite was down by 32.92 points or 0.53% to 6,130.68.