Sensex, Nifty remain under grip of bears

Indian equity benchmarks remained under a grip of bears in late morning session, with both Sensex and Nifty trading in deep red, on the back of weak cues from other Asian markets. Domestic sentiments remained negative, as foreign portfolio investors (FPIs) pulled out as much as Rs 17,537 crore from the Indian markets in just three trading sessions of March as investors' sentiment got dented by the uncertainty triggered by the Russia-Ukraine conflict and rising crude oil prices. Adding more worries, Jayanth R Varma, who is a member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), has said the Russia-Ukraine conflict is likely to have adverse effects on both economic growth as well as inflation and policy makers must remain alert and ready to respond rapidly to the emerging situation. Varma said inflation is higher than target, though it is within the tolerance band. Meanwhile, NSE said that the blue-chip NSE Nifty 50 index and Nifty's bank index were intermittently not getting broadcasted. The Exchange is working on resolving the issue and shall keep the members informed.

On the global front, Asian markets were trading in red, even after China's exports grew more than expected in January to February period. The figures from the General Administration of Customs revealed that exports increased 16.3 percent on a yearly basis, bigger than the expected growth of 15.0 percent. At the same time, imports advanced 15.5 percent, but slower than forecast of +16.5 percent.

The BSE Sensex is currently trading at 53140.74, down by 1193.07 points or 2.20% after trading in a range of 52542.64 and 53172.51. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.01%, while Small cap index was down by 1.79%.

The top gaining sectoral indices on the BSE were Metal up by 1.40%, Telecom up by 1.04%, TECK up by 0.44% and IT up by 0.33%, while Realty down by 4.25%, Bankex down by 3.99%, Auto down by 3.60%, Capital Goods down by 2.90% and Industrials down by 2.71% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.52%, HCL Tech. up by 1.26%, Infosys up by 0.85%, Tata Steel up by 0.49% and Wipro up by 0.26%. On the flip side, Axis Bank down by 5.61%, Maruti Suzuki down by 5.47%, Indusind Bank down by 5.42%, Bajaj Finserv down by 5.07% and Mahindra & Mahindra down by 4.75% were the top losers.

Meanwhile, the Goods and Services Tax (GST) Council in its next meeting may look at raising the lowest tax slab to 8 per cent, from 5 per cent, and prune the exemption list in the GST regime as it looks to increase revenues and do away with states' dependence on Centre for compensation. A panel of state finance ministers is likely to submit its report by this month end to the Council suggesting various steps to raise revenue, including hiking the lowest slab and rationalising the slab. Currently, GST is a four-tier structure attracting a tax rate of 5, 12, 18 and 28 per cent.  

Essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. This cess collection is used to compensate states for the revenue loss due to GST rollout. The GoM is likely to propose raising the 5 per cent slab to 8 per cent, which may yield an additional Rs 1.50 lakh crore annual revenues. As per calculations, 1 per cent increase in the lowest slab, which mainly include packaged food items, results in a revenue gain of Rs 50,000 crore annually.

As part of rationalisation, the GoM is also looking at a 3-tier GST structure, with rates at 8, 18 and 28 per cent. If the proposal comes through, all the goods and services which are currently taxed at 12 per cent, will move to 18 per cent slab. Besides, the GoM would also propose reducing the number of items which are exempted from GST. Currently, unpackaged and unbranded food and dairy items are exempted from GST.

The CNX Nifty is currently trading at 15935.95, down by 309.40 points or 1.90% after trading in a range of 15741.55 and 15937.20. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.95%, ONGC up by 3.87%, Bharti Airtel up by 2.72%, UPL up by 2.03% and Coal India up by 1.49%. On the flip side, Axis Bank down by 5.38%, Maruti Suzuki down by 5.34%, Indusind Bank down by 5.32%, Bajaj Finserv down by 5.13% and Tata Motors down by 4.85% were the top losers.

Asian markets were trading in red; Hang Seng decreased 747.80 points or 3.41% to 21,157.49, Nikkei 225 slipped 686.30 points or 2.64% to 25,299.17, Taiwan Weighted dropped 524.18 points or 2.96% to 17,212.34, KOSPI fell 53.54 points or 1.97% to 2,659.89, Shanghai Composite declined 52.22 points or 1.51% to 3,395.43, Straits Times trembled 20.35 points or 0.63% to 3,206.43 and Jakarta Composite lost 55.54 points or 0.8% to 6,872.79.