Weak trade continues on Dalal Street

Indian equity benchmarks continued their weak trade in afternoon deals, as Capital Goods, Utilities, Industrials and Metal stocks retreated, tracking sell-off in the global market. The mood of the markets remained dampened despite easing wholesale price index (WPI) inflation data. India’s annual wholesale price inflation eased to an eight-month low of 3.80% in December, helped by a smaller increase in food and fuel prices. Sentiments remained weak with data showing that India’s industrial output hit a 17-month low of 0.5 per cent in November as compared to 8.1 per cent in October mainly on the back of contraction in manufacturing sector, mining, capital goods and consumer durable goods. The previous low was in June 2017, when IIP growth contracted by 0.3 per cent. Moreover, depreciation in Indian rupee for the second day in a row on account of appreciation of the dollar overseas, also weighed on the sentiments. On the global front, Asian markets were trading in red, as China trade data started trickling in and as investors looked to key corporate earnings later in the week to take the pulse of a cooling global economy.

The BSE Sensex is currently trading at 35729.59, down by 280.25 points or 0.78% after trading in a range of 35691.75 and 36124.94. There were 3 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.73%, while Small cap index was down by 0.57%.

The only gaining sectoral index on the BSE was IT up by 0.02%, while Capital Goods down by 1.79%, Utilities down by 1.38%, Industrials down by 1.28%, Metal down by 1.14% and Auto down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.46%, Infosys up by 2.13% and Sun Pharma up by 0.69%. On the flip side, Larsen & Toubro down by 2.58%, Indusind Bank down by 2.42%, Axis Bank down by 1.67%, Vedanta down by 1.63% and HDFC down by 1.55% were the top losers.

Meanwhile, in order to provide relief and protection to the consumers, the revenue department is likely to mandate composition dealers and service providers to declare their goods and services tax (GST) registration status in invoices to ensure that they do not charge any tax from buyers. The move, once implemented, would check the widespread practice of composition dealers of charging GST from purchasers and not depositing it with the exchequer. The revenue department is also planning to launch a campaign to educate consumers that the dealers opting for composition scheme are not required to charge the GST from purchasers.

Under the GST composition scheme, traders and manufacturers are required to pay only 1 percent GST on goods which otherwise attract a higher levy of either 5, 12 or 18 percent. Such dealers are also not permitted to charge GST from the purchaser. There are over 1.17 crore businesses that have registered under GST and among these, among 20 lakh have opted for the composition scheme. It has come to the notice of the government that a large number of composition dealers are levying GST at higher rates and not depositing it with the government.

To ease the burden of compliance for small businesses, the GST law provides for composition scheme under which traders and manufacturers with an annual turnover of up to Rs 1 crore can pay 1 per cent GST. This threshold will increase to Rs 1.5 crore from April 1. Also, the GST Council, headed by Arun Jaitley and comprising state ministers, in its meeting on January 10 permitted service provider and those dealing in both goods and services with a turnover of Rs 50 lakh to opt for the GST composition scheme.

The CNX Nifty is currently trading at 10701.95, down by 93.00 points or 0.86% after trading in a range of 10692.35 and 10808.00. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.10%, Infosys up by 2.14%, Bharti Infratel up by 1.62%, Sun Pharma up by 0.43% and Indian Oil Corp. up by 0.38%. On the flip side, GAIL India down by 3.78%, Wipro down by 3.01%, Larsen & Toubro down by 2.71%, Indusind Bank down by 2.52% and JSW Steel down by 1.97% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 412.50 points or 1.55% to 26,254.77, KOSPI fell 11.05 points or 0.53% to 2,064.52, Jakarta Composite dropped 55.19 points or 0.87% to 6,306.28, Taiwan Weighted dropped 51.18 points or 0.52% to 9,708.22, Shanghai Composite declined 20.53 points or 0.8% to 2,533.30 and Straits Times trembled 14.66 points or 0.46% to 3,183.99.