Benchmarks trim gains in late afternoon deal

The Indian equity benchmarks trimmed some of their gains and started trading near neutral line in late afternoon session, following weak global cues. Sentiment on the street weakened as Income Tax Department’s statement that the actual gross direct tax collection during 2019-20 fiscal dipped by 4.92% to Rs 12.33 trillion on account on reduction in corporate tax rate, increased standard deduction and personal I-T exemption limit. Traders paid no heed Reserve Bank of India’s (RBI) latest data showing that the bank credit rose by 6.25 percent to Rs 102.23 lakh crore, while deposits grew by 10.64 percent to Rs 138.30 lakh crore in the fortnight ended May 22, 2020. In the fortnight ended May 24, 2019, deposits were at Rs 124.99 lakh crore and advances stood at Rs 96.21 lakh crore. Sector wise, Power stocks remained in focus with CRISIL Ratings’ report that power distribution utilities' debt will hit an all-time high of Rs 4.5 lakh crore by the end of the ongoing financial year.

On the global front, European markets were trading lower as the dollar weakened and U.S. equity futures fluctuated as investors mulled how much further to take the global rally in risk assets. Back home, in scrip specific development, Hero MotoCorp gained on launching Integrated Online Sales Platform - eSHOP and Hindustan Unilever surged on focusing on e-commerce, modern trade channels.

The BSE Sensex is currently trading at 34346.09, up by 58.85 points or 0.17% after trading in a range of 34303.81 and 34927.80. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.06%, while Small cap index was up by 1.00%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.91%, PSU up by 2.01%, IT up by 1.65%, TECK up by 1.27% and Energy was up by 0.81%, while Healthcare down by 0.76%, Basic Materials down by 0.48%, Consumer Discretionary down by 0.24%, Auto down by 0.17% and Power was down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 6.11%, Axis Bank up by 5.39%, ONGC up by 4.37%, Bajaj Finance up by 4.07% and Titan Company up by 2.87%. On the flip side, HDFC Bank down by 2.16%, Nestle down by 1.53%, Tata Steel down by 1.30%, Kotak Mahindra Bank down by 1.22% and Ultratech Cement down by 1.21% were the top losers.

Meanwhile, in order to promote 'Make in India' initiative and make the country self-reliant, the government has modified public procurement norms to give maximum preference to companies whose goods and services have 50 per cent or more local content. The revised Public Procurement (Preference to Make in India), Order 2017, has introduced a concept of Class-I, II and non-local suppliers, based on which they will get preference in government purchases of goods and services.

According to the new rules, Class-I local suppliers will get the most preference in all government purchases because their domestic value addition is 50 per cent or more. They will be followed by Class-II suppliers, whose value addition range is more than 20 per cent but less than 50 per cent. Companies with less than 20 per cent of domestic content in their goods or services will not able to participate in most of the government tenders and they are categorized as ‘non-local suppliers’.

Besides, for purchases of goods/services with an estimated value of less than Rs 200 crore, global tender enquiry will not be issued except with the approval of the competent authority as designated by the Department of Expenditure. Earlier, only local suppliers were allowed to bid for procurement orders worth less than Rs 50 lakh.

The CNX Nifty is currently trading at 10162.00, up by 19.85 points or 0.20% after trading in a range of 10149.10 and 10328.50. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 6.95%, BPCL up by 6.57%, Indusind Bank up by 6.19%, Axis Bank up by 5.45% and Indian Oil Corp. up by 4.53%. On the flip side, Zee Entertainment down by 4.90%, Shree Cement down by 3.19%, Cipla down by 2.32%, HDFC Bank down by 2.00% and Eicher Motors down by 1.90% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 27.83 points or 0.43% to 6,456.47, France’s CAC decreased 41.74 points or 0.8% to 5,156.05 and Germany’s DAX was down by 120.71 points or 0.94% to 12,726.97.