HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Local equities pare early gains to turn red
Dec-06-2019

Local equity benchmarks pared all their early gains and entered into negative trajectory with frontline gauges breaching their crucial 12,050 (Nifty) and 40,800 (Sensex) levels. Realty, PSU and Consumer Durables counters witnessed notable losses, while Telecom, Energy and Healthcare sectors edged higher. Traders turned concerned with Reserve Bank of India’s consumer confidence survey (CCS) which highlighted that a further drop in consumer confidence in November as households remained pessimistic about jobs and the general economic situation. Meanwhile, expressing disappointment at the RBI’s decision to keep interest rates unchanged, industry body FICCI stated that there is a need for continued action on the policy rate front to boost growth, which further disappointed market sentiments. However, traders took note of Commerce and Industry Minister Piyush Goyal’s statement that the target of Rs 5 lakh crore business through government’s e-marketplace GeM is achievable in less than five years given the huge amount of procurement done via the platform.

 On the global turf, Asian markets were trading mostly in green, after a senior Chinese official said negotiations for a phase-one trade deal with the US are progressing. Back home, Finance Minister Nirmala Sitharman said that the lower 15% tax rate for new manufacturing companies will not apply to computer software development, mining and printing of books. On the sectoral front ,aviation industry stock were in focus, as International Air Transport Association (IATA) stated that India's domestic air passenger volume -- measured in revenue passenger kilometres (RPKs), increased by 3.6 percent in October 2019 but the expansion was slower as compared to the year-ago period.

The BSE Sensex is currently trading at 40765.78, down by 13.81 points or 0.03% after trading in a range of 40763.97 and 40952.13. There were 14 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.16%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Telecom up by 0.86%, Healthcare up by 0.29%, Basic Materials up by 0.24%, Energy up by 0.21% and Metal was up by 0.17%, while Realty down by 1.13%, PSU down by 0.69%, Consumer Durables down by 0.52%, Auto down by 0.43% and Capital Goods was down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.76%, Tata Steel up by 1.39%, Kotak Mahindra Bank up by 0.90%, HCL Tech up by 0.68% and HDFC Bank was up by 0.65%. On the flip side, Yes Bank down by 5.15%, SBI down by 1.43%, ONGC down by 1.09%, Mahindra & Mahindra down by 0.81% and HDFC was down by 0.73% were the top losers.

Meanwhile, with an aim to reduce multiplicity of taxes and improve the business climate, Oil Minister Dharmendra Pradhan has expressed hoped that Finance Minister Nirmala Sitharaman will signal the inclusion of aviation turbine fuel (ATF) and natural gas under the ambit of Goods and Services Tax (GST). Finance Minister is scheduled to present the Union Budget for 2020-21 fiscal on February 1. When the Goods and Services Tax (GST) was introduced on July 1, 2017 amalgamating 17 central and state levies, five commodities namely crude oil, natural gas, petrol, diesel, and ATF were kept out of its purview given the revenue dependence of state governments on this sector.

Including ATF and natural gas will not just help companies set off tax that they paid on input, but will also bring about uniformity in taxation on the fuels in the country. Including natural gas in GST is said to be one of the biggest drivers of not just consumption but will also incentivize producers to spend more on finding and producing more gas as well as incentivize importers to bring in more LNG. ATF makes up for almost half of the cost of an airline and rates vary from state to state depending on local VAT. A uniform GST would also push the usage of environment-friendly natural gas, whose share in the energy basket the government wants to increase to 15% by 2030 from current 6.2%.

Pradhan has been making a case for the GST Council - the highest decision-making body of the new indirect tax regime - to take a decision in favour of these two fuels at the earliest. Under the existing structure, both natural gas and ATF attract the Centre's excise duty and a state's value-added tax (VAT). Both these and all other levies will get subsumed under GST if they are brought under its ambit. The decision on their inclusion depends on the financial position of states as revenues from these five petroleum products constitute a substantial chunk of state government finances.

The CNX Nifty is currently trading at 12016.20, down by 2.20 points or 0.02% after trading in a range of 12011.10 and 12057.05. There were 23 stocks advancing against 26 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Bharti Infratel up by 4.76%, Dr. Reddys Lab up by 1.96%, Asian Paints up by 1.81%, Tata Steel up by 1.20% and Kotak Mahindra Bank was up by 0.98%. On the flip side, Yes Bank down by 5.31%, Zee Entertainment down by 1.90%, SBI down by 1.46%, ONGC down by 1.28% and GAIL India was down by 0.99% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 176.86 points or 0.67% to 26,393.90, Nikkei 225 surged 64.24 points or 0.28% to 23,364.33, KOSPI rose 18.17 points or 0.88% to 2,078.91, Jakarta Composite soared 10.82 points or 0.18% to 6,162.94, Straits Times advanced 1.22 points or 0.04% to 3,175.41 and Shanghai Composite was up by 0.43 points or 0.01% to 2,899.90. On the other side, Taiwan Weighted was down by 5.54 points or 0.05% to 11,589.11.
  RELATED NEWS >>
Most Viewed >>
April 24 , 2024
Investing in passive funds? Keep it simple and
April 22 , 2024
Investment bankers to receive hefty bonuses as
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
April 23 , 2024
Why Mirae Asset MF is cautioning its ETF inves
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.