Benchmarks trim opening gains in early deals; Metal drags markets

Indian equity benchmarks made optimistic start tracking sharp fall in crude oil prices overnight, which slumped 8 percent to drift below $100 a barrel for the first time since May. But, soon markets trimmed most of their gains and are trading flat with positive bias in early deals due to weakness in Asian peers. Initially, markets sentiments got some support as foreign institutional investors (FIIs) turned net buyers for the first time since May 30, buying shares worth Rs 1,295.84 crore on July 5, as per provisional data available on the NSE. Though, some cautiousness came in amid concerns about steep hikes in COVID-era interest rates globally and their impact on economic growth. Traders took note of report that Union food and consumer affairs minister Piyush Goyal has asked states to encourage farmers to increase sowing area for paddy and wheat as higher domestic production will boost India’s exports. Meanwhile, domestic 14.2 kg LPG cylinder's prices were increased by Rs 50 with effect from today in a move that will see the rate in Delhi go up to Rs 1,053.

Global cues remained lackluster with all the Asian markets are trading lower following the mixed cues overnight from Wall Street, dragged by weakness in materials and energy stocks as commodities prices tumbled on the prospects of looming recession hurting demand. The surge in COVID-19 infections in China also hurt market sentiment as it reignited worries about potential lockdowns. Back home, edible oil industry stocks were in focus as the food ministry called a meeting with edible oil industry bodies and manufacturers to discuss reduction in the retail prices of cooking oils amid a fall in global prices. In stock specific developments, Satia Industries rose as it bags new order worth Rs 105 crore. However, SpiceJet hits 52-week low post seventh technical glitch in 17 days.

The BSE Sensex is currently trading at 53201.22, up by 66.87 points or 0.13% after trading in a range of 53170.70 and 53505.93. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.18%, while Small cap index was down by 0.37%.

The top gaining sectoral indices on the BSE were Auto up by 0.84%, Bankex up by 0.58%, Consumer discretionary up by 0.48%, Capital Goods up by 0.19%, FMCG up by 0.15%, while Metal down by 2.82%, Energy down by 1.12%, Basic Materials down by 0.98%, Oil & Gas down by 0.95%, PSU down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.87%, Asian Paints up by 1.82%, Bajaj Finserv up by 1.09%, Mahindra & Mahindra up by 1.02% and Axis Bank up by 1.00%. On the flip side, Tata Steel down by 2.42%, NTPC down by 1.24%, Reliance Industries down by 1.03%, Power Grid down by 0.89% and TCS down by 0.28% were the top losers.

Meanwhile, pitching for the simplification of Goods and Services Tax (GST) structure, the Confederation of Indian Industry’s (CII’s) President Sanjiv Bajaj has suggested that electricity as well as fuel should be brought under the GST ambit as that will help make the industry more competitive. He also suggested that the number of tax slabs under the GST should be brought down to three. Further, he said there is justification for keeping sin and luxury goods in the highest slab.

The president of the industry body said ‘we believe there is (scope for) simplification to probably three slabs. Now that five years have gone and there is experience over there, is what makes sense and that is something that should be deliberated upon’. Besides the exempted category, GST is levied at 5 per cent, 12 per cent, 18 per cent and 28 per cent. There are separate tax rates for gold and precious and semi-precious stones.

On rupee movement against the US dollar, Bajaj said strong forex reserves helped the Reserve Bank of India (RBI) to intervene when required to at least check volatility. He said ‘we believe that eventually the rupee must find its own level and that is a reflection of our own competitiveness but the volatility is what needs to be moderated as RBI has been trying to do’. About high inflation, he said the government has already taken a number of actions to reduce inflation on the ground. He also exuded confidence that the country would witness ‘solid growth’ gradually coming back.

The CNX Nifty is currently trading at 15816.85, up by 6.00 points or 0.04% after trading in a range of 15814.05 and 15905.00. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.04%, Bajaj Finance up by 1.96%, Asian Paints up by 1.87%, Hero MotoCorp up by 1.09% and Mahindra & Mahindra up by 1.02%. On the flip side, Hindalco down by 4.91%, ONGC down by 4.59%, Tata Steel down by 2.42%, Coal India down by 2.16% and JSW Steel down by 1.80% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 289.67 points or 1.10% to 26,133.80, Straits Times fell 3.82 points or 0.12% to 3,100.29, Hang Seng plunged 314.64 points or 1.44% to 21,538.43, Taiwan Weighted dropped 233.36 points or 1.63% to 14,115.84, KOSPI edged down by 23.32 points or 1.00% to 2,318.46, Jakarta Composite lost 88.32 points or 1.32% to 6,614.95 and Shanghai Composite was down by 45.50 points or 1.34% to 3,358.53.