Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in early noon session, amid negative signals from other Asian markets. Selling pressure in the telecom and Teck stocks influenced the markets. Besides, broader indices were also trading in red, dragging their larger peers lower during the trade. Sentiments got undermined with private report stating that the Reserve Bank of India is unlikely to vote in favour of overseas sovereign bonds at its meeting with the government. The central bank is concerned that signals by overseas bonds could disrupt local bonds, which are controlled by the RBI.  Selling further crept in as foreign investors pulled out a net amount of Rs 9,197 crore in just seven trading sessions in August due to unconducive domestic and global factors. However, downfall remain limited with Trade Promotion Council of India’s (TPCI) report that exports of Indian goods, which were enjoying benefits under the preferential tariff system GSP, to the US registered a growth of 32 per cent in June. Meanwhile, a private report stated that India could make it mandatory for all imports to carry ‘made in (country)’ tag declaring their place of origin as it looks to tackle large scale dumping and entry of sub-standard goods and give a fillip to local manufacturing. 

On the global front, Asian markets were trading in red as the China has ratcheted up its rhetoric towards Hong Kong's months-long protest movement, warning that violent anti-government demonstrations were the first signs of terrorism and called for the severe punishment of perpetrators. Back on the street, in scrip specific developments, shares of Confidence Petroleum gained on commissioning 13 auto LPG dispensing stations. Besides, SJVN soared on reporting 44% rise in Q1 consolidated net profit.

The BSE Sensex is currently trading at 37433.22, down by 148.69 points or 0.40% after trading in a range of 37321.28 and 37755.16. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.92%, while Small cap index was down by 0.18%.

The only gaining sectoral indices on the BSE were Energy up by 7.41%, Oil & Gas up by 2.91%, and Healthcare was up by 0.02%, while Telecom down by 4.38%, TECK down by 1.96%, Auto down by 1.82%, IT down by 1.69% and Power was down by 1.55% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 10.79%, Sun Pharma up by 3.40%, Tata Motors up by 2.34%, Tata Motors - DVR up by 2.24% and Power Grid Corporation was up by 0.97%. On the flip side, Bharti Airtel down by 5.94%, NTPC down by 5.05%, Mahindra & Mahindra down by 4.06%, Maruti Suzuki down by 3.13% and Infosys was down by 2.80% were the top losers.

Meanwhile, the government may announce steps to eliminate friction points in the economy for ensuring easy availability of funds to productive sectors and accelerate overall growth momentum. However, the strategy being worked out does not include proposal for reduction of Goods and Services Tax (GST) rates as the government believes that taxes are already lower than in the past.

The government has fixed 7 percent GDP growth target for 2019-20 and data points of the first quarter are in line with that direction. Despite being an election period, GST collection jumped 9 percent in the first quarter while direct taxes surged by 12.9 percent, close to the growth in the same period last fiscal. Corporate tax collection has also remained stable during the quarter, with a growth rate of 13.3 percent. As far as GST revenue collection is concerned, the average mop-up has been over Rs 1 lakh crore during the quarter despite slowdown in industrial activities. The GST collections in April, 2019 jumped to its highest level of Rs 1.13 lakh crore since its roll out in 2017.

Gross GST collections stood at Rs 1.02 lakh crore in July, marginally up from the previous month. The July 2019 mop-up was, however, 5.8 percent higher than the Rs 96,483 crore collected in the same month last year. There is still a lot of scope for improvement in GST collections as more than six months are left for the fiscal to end. There is going to be thrust on improvement in compliance and collection efficiency by making tax process simple and predictable. With various initiatives being undertaken by the government, it is not difficult to attain the growth targets set in the Budget.

The CNX Nifty is currently trading at 11068.85, down by 40.80 points or 0.37% after trading in a range of 11041.40 and 11145.90. There were 16 stocks advancing against 34 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Indiabulls Housing up by 11.16%, Reliance Industries up by 10.58%, GAIL India up by 3.47%, Sun Pharma up by 3.16% and Tata Motors was up by 2.29%. On the flip side, Bharti Airtel down by 5.82%, NTPC down by 5.00%, Mahindra & Mahindra down by 3.82%, Maruti Suzuki down by 3.19% and Infosys was down by 2.94% were the top losers.

All Asian Markets were trading in red; Nikkei 225 slipped 236.51 points or 1.14% to 20,448.31, KOSPI fell 14.35 points or 0.74% to 1,927.94, Taiwan Weighted dropped 86.84 points or 0.83% to 10,385.52, Jakarta Composite lost 29.40 points or 0.47% to 6,221.20, Hang Seng decreased 451.18 points or 1.75% to 25,373.54, Shanghai Composite declined 20.68 points or 0.73% to 2,794.31 and Straits Times was down by 24.89 points or 0.79% to 3,144.05.