Weak trade persists over Dalal Street

Weak trade persisted over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading in red, on the back of negative cues from other Asian markets. Traders got cautious amid reports that a fresh set of 1.25 lakh entities, including government agencies, are currently under probe by the Goods and Services Tax (GST) authorities in the drive to curb fake input tax credit (ITC). These are entities found to have taken supplies from bogus entities identified in the initial two-month drive held by the Central Board of Indirect Taxes and Customs (CBIC) earlier. Besides, Moody's cut credit ratings of several small to mid-sized U.S. banks and said it may downgrade some of the nation's biggest lenders, warning that the sector's credit strength will likely be tested by funding risks and weaker profitability.

Asian markets were trading mostly in red, after the average of household spending in Japan was down 4.2 percent on year in June, coming in at 275,545 yen. That missed expectations for an annual decline of 4.1 percent following the 4.0 percent contraction in May. The average monthly income per household stood at 898,984 yen, down 5.6 percent on year.

The BSE Sensex is currently trading at 65873.57, down by 79.91 points or 0.12% after trading in a range of 65752.63 and 66057.53. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.23%, while Small cap index was up by 0.12%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.64%, Bankex up by 0.42%, Industrials up by 0.17% and Capital Goods up by 0.06%, while Utilities down by 1.15%, Power down by 1.04%, Telecom down by 0.81%, Metal down by 0.76% and Realty down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.38%, Wipro up by 0.99%, Axis Bank up by 0.87%, Titan Company up by 0.79% and Maruti Suzuki up by 0.66%. On the flip side, Power Grid Corporation of India down by 2.42%, Mahindra & Mahindra down by 1.75%, NTPC down by 1.33%, JSW Steel down by 1.25% and Sun Pharma down by 1.20% were the top losers.

Meanwhile, Government think-tank Niti Aayog is looking at tax-related issues, including inverted duty structure in three sectors of engineering, leather, and textiles. The issues are likely to be taken up with higher authorities for their resolution to promote the growth of these sectors.

Industry representatives of leather and engineering sectors said that they have shared a list of GST (Goods and Services Tax) and inverted duty structure-related issues with the Niti Aayog. The leather sector has recommended the reinstatement of basic customs duty on the import of wet blue, crust and finished leathers. The exercise assumes significance as these three sectors are labour-intensive and contribute significantly to the country's merchandise exports.

The leather and footwear industry employs 4.42 million people and its exports stood at $5.26 billion in 2022-23. Engineering exports in the last fiscal aggregated at $107 billion, while the outbound shipments of the textile sector were about $36 billion in that fiscal year.

The CNX Nifty is currently trading at 19574.10, down by 23.20 points or 0.12% after trading in a range of 19533.10 and 19634.40. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.72%, Cipla up by 2.64%, SBI Life Insurance up by 1.74%, Tech Mahindra up by 1.31% and Wipro up by 0.94%. On the flip side, Adani Enterprises down by 2.38%, Power Grid Corporation of India down by 2.32%, Adani Ports and Special Economic Zone down by 2.00%, Mahindra & Mahindra down by 1.86% and Hindalco down by 1.70% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 342.08 points or 1.75% to 19,195.84, Taiwan Weighted lost 118.93 points or 0.7% to 16,877.07, Shanghai Composite weakened 9.63 points or 0.29% to 3,259.20 and KOSPI dropped 6.73 points or 0.26% to 2,573.98, while Jakarta Composite gained 1.77 points or 0.03% to 6,888.14, Straits Times rose 2.69 points or 0.08% to 3,312.56 and Nikkei 225 surged 122.73 points or 0.38% to 32,377.29.