Indian equity benchmarks made negative start on Friday tracking lackluster trade in Asian peers amid concerns over the outlook for interest rates amid the prospect of further policy tightening from the US Fed as part of its commitment to reign in stubborn inflation. Soon, domestic indices extend their losses and are trading lower with cut of around half a percent each in early deals. Investors remained on sidelines and avoid making any long position ahead of weekend and macro-economic data of Index of Industrial production (IIP) or Industrial growth to be out after market hours today. Foreign fund outflows continue to dent the sentiments in the markets. On February 09, Foreign Portfolio Investors were net sellers, offloading shares worth Rs 144.73 crore, according to exchange data. Market participants continue to keep eye on earnings reports for more directional cues in the markets.
Also, the stocks of Adani Group companies were in focus as index provider MSCI Inc has reduced the weightage of four firms in its index after a review. In stock specific developments, Zomato dropped after the company’s fiscal third-quarter net loss widened over five-fold on-year to Rs 343 crore from Rs 66 crore, mainly due to an exceptional gain in the same quarter last year. On the other hand, Life Insurance Corporation (LIC) traded higher as it reported a manifold increase in its net profit in the December quarter (Q3) of financial year 2022-23 (FY23).
The BSE Sensex is currently trading at 60522.55, down by 283.67 points or 0.47% after trading in a range of 60515.46 and 60774.14. There were 8 stocks advancing against 22 stocks declining on the index.
The broader indices were trading mixed; the BSE Mid cap index fell 0.27%, while Small cap index was up by 0.18%.
The top gaining sectoral indices on the BSE were Capital Goods up by 0.57%, Industrials up by 0.54%, Telecom up by 0.37%, PSU up by 0.12%, while Metal down by 1.36%, Utilities down by 1.32%, Power down by 0.94%, Energy down by 0.85%, TECK down by 0.78% were the top losing indices on BSE.
The top gainers on the Sensex were Larsen & Toubro up by 0.72%, Bajaj Finance up by 0.62%, Power Grid up by 0.40%, SBI up by 0.34% and Mahindra & Mahindra up by 0.20%. On the flip side, HCL Technologies down by 2.12%, Tata Steel down by 2.02%, Reliance Industries down by 1.20%, Tata Motors down by 1.04% and Infosys down by 0.96% were the top losers.
Meanwhile, a Pan-India MSME apex body -- Chamber of Small Industries Association (COSIA) has urged the government to revisit the issue of GST on leased land affecting Micro, Small & Medium Enterprises (MSMEs) across the country. COSIA president Sandeep Parekh said that the GST department has put the industry in a state of fear by sending summons and has started an investigation into how many transfers of leased lands have taken place in MIDC (Maharashtra Industrial Development Corporation) area since July 2017.
The department seems to be taking a stand after 5 years that on transfer of leased land from one party to the other comes under the purview of supply of service and hence 18 per cent is leviable on the transaction, though MIDC is exempt. If this really goes through then it will sound a death knell for all the MSMEs that have sold their plots since July 2017 and also future transactions. The initial lease of land from MIDC to the industry is exempt under GST. However, no specific exemption has been granted for further assignment of leasehold rights. This is a huge amount and especially for the MSME this is going to break their back.
This is a PAN-India issue and presently, there are thousands of units in Maharashtra alone, which have not paid GST on the assignment of leasehold rights of such land taken on lease from MIDC on the understanding that the ‘assignment of leasehold rights in land’ is akin to ‘sale of land’ and such transactions fall under Schedule III of the CGST Act on which GST is not payable. All have paid stamp duty as per the sale of land, and also paid the income tax on short-term and long-term gains considering as deemed ownership, and the premium is paid to MIDC for transferring the lease.
The CNX Nifty is currently trading at 17804.55, down by 88.90 points or 0.50% after trading in a range of 17801.00 and 17871.55. There were 12 stocks advancing against 38 stocks declining on the index.
The top gainers on Nifty were Adani Ports & SEZ up by 2.11%, HDFC Life Insurance up by 1.58%, Larsen & Toubro up by 0.68%, Bajaj Finance up by 0.55% and UPL up by 0.49%. On the flip side, Adani Enterprises down by 2.16%, HCL Technologies down by 2.13%, Hindalco down by 2.11%, Tata Steel down by 2.02% and Reliance Industries down by 1.26% were the top losers.
Asian markets are trading mostly in red; Hang Seng declined 387.11 points or 1.79% to 21,237.25, Jakarta Composite plunged 86.34 points or 1.25% to 6,811.03, Taiwan Weighted lost 22.99 points or 0.15% to 15,575.72, Shanghai Composite weakened 19.53 points or 0.6% to 3,250.85, KOSPI dropped 18.04 points or 0.73% to 2,463.48 and Straits Times fell 9.37 points or 0.28% to 3,350.11, while Nikkei 225 was up by 69.97 points or 0.25% to 27,654.32.
