Bourses give up gains

Indian equity benchmarks gave up their gains in late afternoon session, with Sensex and Nifty losing around 100 and 50 points, respectively, on account of weak opening in European markets. In line with the larger peers, the broader markets were also remained under pressure during late noon deals. Trading sentiments got hampered with S&P Global Ratings’ latest report stating that goods and Services Tax (GST) regime in India is not likely to reduce the deficits of state governments significantly, amid large and growing expenditure mandates for the social sector as well as capital spending. Some concerns also came with a private report stating that the weak volume growth reported by consumer staple companies in Q4, FY19 underlines the slowdown seen in housing over the past five to six years and automobiles over the past year. The next government may have its task cut out to revive flagging economic growth.

On the global front, European markets were trading in red, as Eurozone private sector grew to the slowest pace in three months in April, due to the weaker performance in both manufacturing and services sectors. The final data from IHS Markit's purchasing managers' survey showed that the final Eurozone Composite Purchasing Managers' Index, or PMI, fell to a three-month low of 51.5 in April from 51.6 in March. The flash reading was 51.3. However, Asian markets were trading in green, even though Indonesia's economy grew at a slower pace in the first quarter of the year amid weaker exports and investment. The preliminary data from the statistical bureau showed that Gross domestic product grew 5.07 percent year-on-year following a 5.18 percent expansion in the previous three months.

The BSE Sensex is currently trading at 38501.40, down by 98.94 points or 0.26% after trading in a range of 38475.06 and 38835.54. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.45%, while Small cap index was down by 0.40%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.78%, Capital Goods up by 0.54%, IT up by 0.32%, Power up by 0.17% and Utilities up by 0.09%, while Energy down by 1.60%, Telecom down by 1.37%, Oil & Gas down by 1.12%, Realty down by 0.90% and Bankex down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.58%, Hindustan Unilever up by 1.51%, Larsen & Toubro up by 1.44%, Infosys up by 0.81% and HDFC up by 0.70%. On the flip side, Tata Motors down by 2.67%, Tata Motors - DVR down by 2.61%, ICICI Bank down by 2.23%, Reliance Industries down by 2.16% and Asian Paints down by 1.96% were the top losers.

Meanwhile, pointing factors like large and growing expenditure mandates for the social sector as well as capital spending, credit rating agency, S&P Global Ratings in its latest report titled ‘Public Finance System Overview: Indian States’ has said that goods and Services Tax (GST) regime in India may not to reduce the deficits of state governments significantly.

As per the report, the institutional framework for Indian states is evolving, but there is structural deficits due to persistent revenue expenditure mismatch. The rating agency termed GST as major overhaul of tax structure, noting that it will help to widen the tax base and improve revenues of state governments. But, S&P expects states will continue to run large deficits because a significant part of this imbalance is from the expenditure side.

Besides, the report said that policy implementation remains sub-par in India, highlighting another significant development in recent years i.e. the adoption of an amended Fiscal Responsibility Management (FRBM) Act, which forms the fiscal framework, in March 2018. It further said that the government will use fiscal deficit as the key operational target, but added that the FRBM committee lacks the authority to mandate its core recommendations.

The CNX Nifty is currently trading at 11555.10, down by 43.15 points or 0.37% after trading in a range of 11548.75 and 11657.05. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.89%, Larsen & Toubro up by 1.37%, Power Grid up by 1.31%, Titan Company up by 1.21% and Hindalco up by 1.18%. On the flip side, Zee Entertainment down by 4.58%, BPCL down by 2.63%, Tata Motors down by 2.50%, ICICI Bank down by 2.44% and Reliance Industries down by 2.20% were the top losers.

Asian markets are trading mostly in green; Straits Times rose 31.08 points or 0.94% to 3,321.70, Hang Seng gained 124.83 points or 0.43% to 29,334.65, Taiwan Weighted jumped 90.02 points or 0.83% to 10,987.14, Jakarta Composite added 49.73 points or 0.79% to 6,306.08 and Shanghai Composite was up by 22.30 points or 0.77% to 2,928.76. On the flip side, Nikkei 225 tumbled 335.01 points or 1.51% to 21,923.72 and KOSPI was down by 19.33 points or 0.88% to 2,176.99.

All European markets were trading in red; UK’s FTSE 100 slipped 54.16 points or 0.73% to 7,326.48, France’s CAC fell 28.34 points or 0.52% to 5,455.18 and Germany’s DAX was down by 46.25 points or 0.38% to 12,240.63.