Indian equity markets commenced the week on a sluggish note as the benchmarks showcased an unenthusiastic performance on Monday and settled with moderate cuts of over quarter percent. Marketmen turned cautious over the Centre's future reform policies in view of appointment of Yogi Adityanath as the Chief Minister of the country's most populous state. The MP from Gorakhpur, who lacks administrative experience, was unanimously elected the BJP legislature party leader at a meeting of the newly elected MLAs, in a move that took many by surprise. Sentiments remained subdued with a report that the all India Consumer Sentiments Index, measured by the BSE and CMIE, has hit a one-year low at 92.25 compared to 99.65 a year ago. This comes even as the wholesale price index based inflation jumped up to a 39-month high of 6.55%. However, losses remained capped with the report that the Cabinet approved four bills to implement a planned Goods and Services Tax (GST) bills, paving the way for Prime Minister Narendra Modi to implement the landmark tax reform from July. The four bills are likely to be taken up by Parliament this week and a separate state GST bill in state assemblies later. Some support also came with the report that the implementation of GST is likely to be fiscally neutral and its impact on inflation is expected to be less than 20 basis points. Further, India has begun the process of dismantling some of the last remaining controls in the foreign direct investment (FDI) framework. The department of economic affairs (DEA) has floated a draft Cabinet note for inter-ministerial consultation to scrap the Foreign Investment Promotion Board (FIPB), in line with a plan announced by finance minister Arun Jaitley in his February 1 budget.
On the global front, Asian markets ended mixed on Monday as oil extended losses on supply concerns and the G20 finance ministers meeting in Germany during the weekend failed to agree on a commitment to keep global trade free and open. Further, Chinese stocks edged higher, as gains among energy stocks offset declines in the realty sector. China's property market picked pace in February despite the government announcing a raft of measures to temper speculative demand, data showed on Saturday. Meanwhile, European stock markets declined in early trade, as investors prepare for key inflation and private sector activity data later in the week.
Back home, the benchmark got off to a sedate opening tracking the dismal leads prevailing in Asian markets following Wall Street's declines and the G20's decision to drop a pledge to avoid trade protectionism. Thereafter, the indices traded in tight range below neutral line with moderate losses for most part of the session. Finally, the NSE's 50-share broadly followed index Nifty, took a cut of over quarter percent to settle below the crucial 9,150 support level, while Bombay Stock Exchange's Sensitive Index, Sensex slipped by over hundred points and closed above the psychological 29,500 mark. The market breadth on the BSE was pessimistic, as there were 1354 shares on the gaining side against 1443 shares on the losing side, while 226 shares remained unchanged.
Finally, the BSE Sensex declined 130.25 points or 0.44% to 29518.74, while the CNX Nifty was down by 33.20 points or 0.36% to 9,126.85.
The BSE Sensex touched a high and a low of 29699.48 and 29482.40, respectively and there were 15 stocks on gainers side as against 15 stocks on the losers side on the index.
The broader indices made a positive closing; the BSE Mid cap index gained 0.17%, while Small cap index was up by 0.30%.
The top gaining sectoral indices on the BSE were Consumer Durables up by 1.03%, Healthcare up by 0.44%, Consumer Disc up by 0.26%, Realty up by 0.25% and PSU up by 0.23%, while IT down by 1.36%, TECK down by 1.23%, Telecom down by 1.11%, Energy down by 0.75% and Oil & Gas down by 0.52% were the top losing indices on BSE.
The top gainers on the Sensex were NTPC up by 0.87%, Bharti Airtel up by 0.76%, Coal India up by 0.76%, HDFC Bank up by 0.63% and Lupin up by 0.62%. On the flip side, Axis Bank down by 2.41%, ICICI Bank down by 1.99%, Infosys down by 1.87%, TCS down by 1.82% and Wipro down by 1.59% were the top losers.
Meanwhile, in order to implement the country’s biggest tax regime from July 2017, the Union Cabinet is likely to take up the approval of four supporting legislations—the Compensation Law, the central GST (CGST), integrated GST (IGST) and Union Territory GST (UTGST) on March 20, which will then be introduced in Parliament.
In the previous two meetings, the GST council had given approval to the four legislations as also the State-GST (S-GST) bill. While the S-GST has to be passed by each of the state legislative assemblies, the other four laws have to be approved by Parliament. Once approved, levy of GST will get legal backing. The government is hoping the C-GST, I-GST, UT-GST and the GST Compensation laws will be approved in the current session of Parliament and state legislatures will soon clear the S-GST bills so that the GST regime can be implemented from July 1.
After the roll out of new indirect tax regime, a composite GST will be levied on sale of goods or rendering of services and the revenue would be split between Centre and states in almost equal proportion. This is because central taxes like excise and service tax and state levies like VAT will be subsumed in the GST. While the CGST will give powers to the Centre to levy GST on goods and services after Union levies like excise and service tax are subsumed, the IGST is to be levied on inter-state supplies. Moreover, the SGST will allow states to levy the tax after VAT and other state levies are subsumed in the GST and the UTGST will also go to Parliament for approval.
The CNX Nifty traded in a range of 9,167.60 and 9,116.30. There were 23 stocks in green as against 28 stocks in red on the index.
The top gainers on Nifty were Aurobindo Pharma up by 2.54%, Grasim Industries up by 2.16%, BHEL up by 1.69%, Eicher Motors up by 1.46% and Coal India up by 1.04%. On the flip side, Idea Cellular down by 10.08%, Axis Bank down by 2.83%, TCS down by 1.97%, Infosys down by 1.92% and ICICI Bank down by 1.92% were the top losers.
The European markets were trading in red; UK’s FTSE 100 decreased 17 points or 0.23% to 7,407.96, Germany’s DAX decreased 34.72 points or 0.29% to 12,060.52 and France’s CAC decreased 19.52 points or 0.39% to 5,009.72.
Asian equity markets ended mixed on Monday following Wall Street's decline and the G20's decision to drop a pledge to avoid trade protectionism, while the Federal Reserve's less hawkish-than-expected comments continued to weigh on the dollar. Chinese stocks bucked the weak trend to close higher, as gains among energy stocks offset declines in the realty sector. China's property market picked pace in February despite the government announcing a raft of measures to temper speculative demand, data showed on Saturday. Japanese markets were closed for the Vernal Equinox holiday.
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