Sensex, Nifty remain lower in late morning deals

Indian equity benchmarks remained lower in late morning session, with both Sensex and Nifty trading in red with notable losses. Negative cues from other Asian markets impacted sentiments over the street. Traders got cautious, after State Bank of India's research division said that driven by several global and domestic factors, inflation may remain elevated in the coming months. Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI, said that faster-than-anticipated and robust recovery in some advanced countries is likely to exert upward pressure on international commodity prices, including crude oil. Besides, Global forecasting firm Oxford Economics has said retail inflation spike in May might cause the RBI to revisit its focus on growth risks, adding that a rate hike is still unlikely this year. It stated that the underlying dynamics of the May inflation print augur caution and the recovery remains on uncertain ground and with fiscal support in retreat, the RBI will likely be hesitant to remove policy accommodation anytime soon.

On the global front, Asian markets were trading mostly in red, even after the overall value of core machine orders in Japan advanced a seasonally adjusted 0.6 percent on month in April, the Cabinet Office said on Wednesday - standing at 802.9 billion yen. That missed expectations for an increase of 2.7 percent and was down from 3.7 percent in March. On a yearly basis, core machine orders gained 6.5 percent - again missing expectations for 8.0 percent following the 0.2 percent contraction in the previous month.

The BSE Sensex is currently trading at 52549.80, down by 223.25 points or 0.42% after trading in a range of 52498.48 and 52816.31. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.50%, while Small cap index was down by 0.49%.

The only gaining sectoral indices on the BSE were Oil & Gas up by 0.26% and FMCG up by 0.26%, while Metal down by 2.22%, Power down by 1.62%, Utilities down by 1.36%, Basic Materials down by 1.09% and Energy down by 1.00% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.28%, Bajaj Finserv up by 0.98%, ITC up by 0.60%, Nestle up by 0.60% and Mahindra & Mahindra up by 0.47%. On the flip side, Power Grid down by 2.20%, Reliance Industries down by 1.16%, HCL Tech down by 0.85%, Bharti Airtel down by 0.84% and Maruti Suzuki down by 0.80% were the top losers.

Meanwhile, the Finance Ministry has notified the concessional rate of Goods and Services Tax (GST) that will be applicable on COVID relief materials till September 30, 2021. Also, a lower GST of 5 per cent will be applicable for work contracts for construction, repair or maintenance of electric furnaces meant for funeral, burial or cremation of the deceased. The earlier tax rate of this service was 12 per cent.

The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, on June 12, had slashed tax rate on COVID drugs such as Remdesivir and Tocilizumab as well as on medical oxygen, oxygen concentrators and other COVID essentials. The Finance Ministry’s Revenue Department on June 14, notified the lower rates for 18 COVID-related supplies, like hand sanitiser, pulse oximeters, BiPAP machine, testing kits, ambulances and temperature check equipment. These concessional rates would be applicable till September 30, 2021.

The Council in its June 12 meeting had decided to reduce GST on COVID-19 drug Tocilizumab and black fungus medicine Amphotericin B to ‘nil’, from 5 per cent. The rate on Remdesivir and Anticoagulants like Heparin is lowered from 12 per cent to 5 per cent. The Council also decided to cut the GST rate on ambulances to 12 per cent from 28 per cent.

Tax on medical-grade oxygen, oxygen concentrators (including personal imports), ventilators, BiPAP machines and high flow nasal cannula (HFNC) devices has been reduced to 5 per cent from 12 per cent. Also, tax on COVID testing kits, pulse oximeters (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 a lower 5 per cent tax, from 18 per cent earlier.

The CNX Nifty is currently trading at 15793.45, down by 75.80 points or 0.48% after trading in a range of 15768.00 and 15880.85. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.32%, Tata Consumer Products up by 1.24%, Bajaj Finserv up by 0.94%, Indian Oil Corp up by 0.91% and ITC up by 0.63%. On the flip side, Adani Ports & SEZ down by 3.80%, Tata Steel down by 2.48%, Hindalco down by 2.34%, Power Grid down by 2.30% and JSW Steel down by 2.13% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 65.18 points or 0.23% to 28,573.35, Taiwan Weighted dropped 76.90 points or 0.44% to 17,294.39, Straits Times trembled 22.20 points or 0.7% to 3,152.67, Shanghai Composite declined 27.45 points or 0.77% to 3,529.11, Jakarta Composite lost 1.11 points or 0.02% to 6,087.93 and Nikkei 225 slipped 146.91 points or 0.5% to 29,294.39. On the flip side, KOSPI rose 20.10 points or 0.62% to 3,278.73.