Weakness persists in markets; Sensex below 38,700 mark

Indian benchmark indices continued to trade in red in afternoon session due to selling in frontline blue chip stocks and weak cues from global markets. The sentiment remained dull with a private survey showing that India's services sector expanded at its slowest pace in seven months in April as some businesses postponed decisions and expansion plans until seeing results of the general election currently under way. The Nikkei/IHS Markit Services Purchasing Managers' Index slipped to 51.0 in April, the lowest since September, down from 52.0 the previous month. Some anxiety was also among the local traders with report that in a first in recent history of tax filings, income tax e-filings in FY2019 have dropped. Income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. On the sectoral front, majority of steel sector stocks were trading in red with data from the World Steel Association showing that India's steel production fell by about 0.3 percent to 27.33 million tonne (MT) during the first quarter of the calendar year 2019. During the January-March 2018 period, the country had produced 27.40 MT of crude steel.

On the flip side, Asian markets were trading in red, as US-China trade concerns resurfaced after US President Donald Trump unexpectedly jacked up pressure on China to reach a trade deal in the midst of negotiations, saying he would hike US tariffs on Chinese goods this week. Back home, the BSE Sensex is currently trading at 38683.84, down by 279.42 points or 0.72% after trading in a range of 38509.79 and 38719.33. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.64%, while Small cap index was down by 0.47%.

The few gaining sectoral indices on the BSE were Telecom up by 0.53%, Oil & Gas up by 0.30% and IT up by 0.04%, while Metal was down by 2.05%, Consumer Durables down by 2.03%, Auto down by 1.27%, Basic Materials down by 1.26% and Consumer Discretionary Goods & Services was down by 0.98% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.10%, Bharti Airtel up by 0.91%, ITC up by 0.69%, Sun Pharma up by 0.46% and ICICI Bank was up by 0.26%. On the flip side, Tata Motors down by 5.01%, Tata Motors - DVR down by 4.63%, Yes Bank down by 3.56%, HDFC down by 2.26% and Indusind Bank was down by 1.80% were the top losers.

Meanwhile, in order to curb Goods and Services Tax (GST) evasion through issue of fake invoices, all invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September. The move would also make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal. The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers' committee has already been set up.

E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill. E-way bill is required for moving goods worth more than Rs 50,000 from one place to another. Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.

Businesses beyond the specified turnover threshold, to be decided later, would be provided a software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice. The e-invoice generation method will be similar to the one being followed for e-way bill on the 'ewaybill.nic.in' portal or payment of GST on the GSTN portal.

The CNX Nifty is currently trading at 11617.35, down by 94.90 points or 0.81% after trading in a range of 11585.10 and 11629.80. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.46%, Bharti Airtel up by 1.01%, TCS up by 1.00%, Tech Mahindra up by 0.69% and Indian Oil Corporation was up by 0.67%. On the flip side, Tata Motors down by 4.89%, Titan down by 4.37%, Yes Bank down by 4.09%, JSW Steel down by 3.56% and Zee Entertainment was down by 2.92% were the top losers.

Asian markets were trading in red; Taiwan Weighted dropped 199.18 points or 1.8% to 10,897.12, Hang Seng decreased 991.94 points or 3.3% to 29,089.61, Shanghai Composite declined 175.81 points or 5.71% to 2,902.53, Straits Times trembled 107.21 points or 3.16% to 3,285.08 and Jakarta Composite was down by 77.31 points or 1.22% to 6,242.15.