Sensex, Nifty remain lower in late morning deals

Indian equity benchmarks remained lower during late morning deals, with both Sensex and Nifty trading in red terrain, despite positive cues from other Asian markets. Domestic sentiments remained negative, as Former RBI Governor D Subbarao has expressed concerns over ‘extreme unevenness’ in economic recovery and ‘sharpening inequalities’ between upper-income segments and lower-income households in the country, cautioning that the trend will hit growth prospects going forward. Terming the uneven recovery ‘morally wrong and politically corrosive’ he said liquidity in the domestic market and foreign fund inflows are leading to soaring prices of stocks and other assets despite disruptions due to the Covid pandemic.

However, downside remained capped, after Moody's Investors Service said that India's and Brazil's first-quarter 2021 real GDP data show a strong rebound in both economies following a contraction last year of 4.4 per cent in Brazil and 7.1 per cent in India. Brazil's first-quarter GDP expanded 1.2 per cent from the previous quarter and 2.3 per cent from first-quarter 2020. India's first-quarter GDP rose 1.5 per cent quarter on quarter and year on year.

On the global front, Asian markets were trading mostly in green, after Malaysia's industrial production accelerated in April. The data from the Department of Statistics showed that industrial production rose 50.1 percent year-on-year in April, following a 9.3 percent increase in March. The growth in production was mainly driven by a rise in production of manufacturing industry, mining and quarrying, and electricity.

The BSE Sensex is currently trading at 52222.35, down by 252.41 points or 0.48% after trading in a range of 51936.31 and 52542.66. There were 7 stocks advancing against 22 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.22%, while Small cap index was down by 0.46%.

The top gaining sectoral indices on the BSE were IT up by 0.26%, TECK up by 0.13%, Metal up by 0.02% and Oil & Gas up by 0.01%, while Power down by 2.50%, Industrials down by 2.20%, Realty down by 1.72%, Utilities down by 1.62% and Bankex down by 1.19% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.49%, ONGC up by 1.30%, Infosys up by 0.70%, Dr. Reddy’s Lab up by 0.42% and Reliance Industries up by 0.20%. On the flip side, SBI down by 1.56%, Kotak Mahindra Bank down by 1.53%, ICICI Bank down by 1.44%, HDFC down by 1.28% and Maruti Suzuki down by 1.24% were the top losers.

Meanwhile, the Goods and Services Tax (GST) Council, at its ‘single-agenda’ meeting, has slashed tax rate on COVID-19 drugs such as Remdesivir and Tocilizumab as well as on medical oxygen and oxygen concentrators but ignored demands for reduction in taxes on vaccines. A 5 per cent GST levy on vaccines will continue which will allow manufacturers to get benefit of settling taxes paid on inputs. Finance Minister Nirmala Sitharaman explained that the 5 per cent levy will not put any additional burden on common man as the government was procuring all vaccines and giving them to citizens for free. The reduced tax rates were based on a recommendation of a group of ministers, headed by Meghalaya Deputy Chief Minister Conrad Sangma, and would remain effective till September 30, 2021.

GST rate on Covid vaccines was retained at 5 per cent as the Council felt that majority of the vaccine procurement was being done by the Centre and given free to people. Sitharaman said ‘Central government is purchasing 75 per cent and is paying GST also. But the impact of this GST on people will be nil since people would be getting vaccines free of cost at government hospitals. Centre is purchasing and it is given free to people’.

GST on Tocilizumab and Amphotericin B is slashed to nil from 5 per cent, the rate on Remdesivir and anticoagulants like Heparin is lowered from 12 per cent to 5 per cent. GST rate on ambulance has been cut to 12 per cent from 28 per cent. Tax on medical grade oxygen, oxygen concentrator (including personal imports), ventilators, BiPAP machines and high flow nasal cannula (HFNC) devices has been cut to 5 per cent from 12 per cent. Also, tax on Covid testing kits, pulse oximeter (including personal imports) has been brought down to 5 per cent from 12 per cent. Hand sanitisers, temperature check equipment, gas/electric furnaces for crematoriums too will attract lower 5 per cent tax, compared to 18 per cent earlier.

The CNX Nifty is currently trading at 15715.15, down by 84.20 points or 0.53% after trading in a range of 15606.50 and 15791.90. There were 12 stocks advancing against 37 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Bajaj Finance up by 1.77%, ONGC up by 1.17%, Divis Lab up by 0.85%, Tata Steel up by 0.78% and Infosys up by 0.64%. On the flip side, Adani Ports & SEZ down by 13.40%, Coal India down by 1.75%, SBI down by 1.55%, Kotak Mahindra Bank down by 1.47% and ICICI Bank down by 1.45% were the top losers.

Asian markets were trading mostly in green; KOSPI rose 1.82 points or 0.06% to 3,251.14, Nikkei 225 surged 173.87 points or 0.6% to 29,122.60 and Jakarta Composite soared 5.64 points or 0.09% to 6,101.14.  On the flip side, Straits Times trembled 1.99 points or 0.06% to 3,155.98.