Bourses add losses in late afternoon session

The Indian equity benchmarks added more losses in late afternoon session on account of profit booking. However, the broader indices, the BSE Mid cap index and Small cap index scaled new high levels. Traders avoided to take risk ahead of Q1FY25 earnings and key macroeconomic data due next week. Sector wise, defence stocks remained in focus after defence minister Rajnath Singh announced that the country's defence production recorded the highest ever growth in 2023-24. The value of production has reached Rs 1,26,887 crore in 2023-24, which is 16.8 percent higher than the value of production of previous financial year. On the global front, Asian markets were trading mixed as EU tariffs on Chinese imports took effect and China announced the next step in its anti-dumping investigation into European brandy imports. European markets were trading higher as voters in the UK general election delivered a devastating verdict on 14 years of Conservative rule.

The BSE Sensex is currently trading at 79639.44, down by 410.23 points or 0.51% after trading in a range of 79478.96 and 79876.25. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.62%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were PSU up by 1.46%, Industrials up by 1.39%, Capital Goods up by 1.38%, Oil & Gas up by 1.25% and Energy was up by 1.11%, while Consumer Durables down by 0.58%, Bankex down by 0.58%, Telecom down by 0.46%, Realty down by 0.38% and Auto was down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.55%, Hindustan Unilever up by 1.30%, Reliance Industries up by 1.10%, Larsen & Toubro up by 1.08% and ITC up by 0.93%. On the flip side, HDFC Bank down by 4.73%, Titan Company down by 2.22%, Tata Steel down by 1.33%, Mahindra & Mahindra down by 1.32% and Ultratech Cement down by 1.05% were the top losers.

Meanwhile, Former Chief Economic Advisor (CEA) Arvind Subramanian has said that the Centre has sacrificed a large portion of revenue from Goods and Services Tax (GST), up to 1 per cent of Gross domestic product (GDP), every year since the rollout of the new indirect tax regime to fund a 14 per cent compensation guarantee provided to states. He also said that it would not be advisable at this point in time to bring petrol and alcohol under the GST. GST was rolled out on July 1, 2017, subsumed 17 taxes and 13 cesses into a 5-tier structure, thereby, simplifying the tax regime. He further said that the GST is a remarkable reflection of cooperative federalism and a counterexample to the narrative of fiscal centralisation by the Centre in the last decade. 

Former CEA has stated that the GST has worked broadly on expected lines to benefit the poorer states. He said the centre has lost 0.5-1 per cent of GDP in revenue every year in the last seven years and added that bringing the cess into a rationalised rate structure can ensure that compensation may not be necessary in future. He also pointed out that GST revenues have come back to the pre-GST level, despite rate cuts showing that collections have improved and indirect taxation has become a bit more progressive. He added that reforms in the GST structure are deeply necessary but highly unlikely to happen. 

The GST compensation cess was discontinued after fiscal 2021-22. The gross GST collection increased 8 per cent to Rs 1.74 lakh crore in June. GST contributes significantly to state revenues – states receive 100 per cent of SGST collected in that state, approximately 50 per cent of IGST (i.e. on inter-state trade). A significant portion of CGST--42 per cent--is devolved to the states based on the Finance Commission’s recommendations

The CNX Nifty is currently trading at 24223.70, down by 78.45 points or 0.32% after trading in a range of 24168.85 and 24288.85. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.45%, Divi's Lab up by 2.17%, Britannia up by 1.64%, Apollo Hospital up by 1.55% and SBI up by 1.50%. On the flip side, HDFC Bank down by 4.79%, Titan Company down by 2.26%, Tata Steel down by 1.35%, Mahindra & Mahindra down by 1.34% and Ultratech Cement down by 1.03% were the top losers.

Asian markets were trading mixed; Hang Seng declined 228.67 points or 1.28% to 17,799.61, Straits Times fell 27.9 points or 0.82% to 3,411.98, Shanghai Composite weakened 7.64 points or 0.26% to 2,949.93 and Nikkei 225 was down by 1.28 points or 0% to 40,912.37. On the flip side, Jakarta Composite gained 11.73 points or 0.16% to 7,232.62, Taiwan Weighted added 34.06 points or 0.14% to 23,556.59 and KOSPI was up by 37.29 points or 1.3% to 2,862.23.

European markets were trading higher; UK’s FTSE 100 increased 17.34 points or 0.21% to 8,258.60, France’s CAC rose 26.52 points or 0.34% to 7,722.30 and Germany’s DAX was up by 154.58 points or 0.84% to 18,605.06.