Key indices tumble on profit booking, GST Bill

Mumbai: Profit booking dragged equity markets lower, while investors were in wait and watch mode as GST Bill was tabled in Rajya Sabha on Wednesday. Equities on the domestic bourses succumbed to profit booking as uncertainty over the passage of the GST (Goods and Services Tax) Bill in the Rajya Sabha impacted the trading.
Both the key indices, BSE Sensex and NSE Nifty, were closed in the negative territory as heavy selling pressure was witnessed in automobile, capital goods and consumer durables stocks.

Sensex fell 284.20 points or 1.02 percent to 27,697.51 points. NSE Nifty dropped by 78.05 points or 0.91 percent to 8,544.85 points.

Opened at 28,008.52 points, Sensex recorded a high of 28,015.43 points and a low of 27,690.06 points during the intra-day trade. The BSE market breadth was skewed in favour of the bears with 1,815 declines and 914 advances. Both the indices had ended marginally in the red during the previous trade session on Tuesday, prompted by negative global cues and profit booking.

During the first half of the session, Sensex fell over 300 points on selling in FMCG, realty, power and industrial stocks. Weak Asian cues coupled with a caution prevailing among investors ahead of the GST debate in Rajya Sabha had impacted the investor confidence.

During the first half of the session, Sensex fell over 300 points on selling in FMCG, realty, power and industrial stocks. Weak Asian cues coupled with a caution prevailing among investors ahead of the GST debate in Rajya Sabha had impacted the investor confidence.

The bourses opened on a negative note as investors traded with caution on expectations of approval of the GST bill in the Rajya Sabha later in the day. Investors are hopeful about the bill’s passage after the union cabinet last week approved key changes in the proposed legislation.

The bourses opened on a negative note as investors traded with caution on expectations of approval of the GST bill in the Rajya Sabha later in the day. Investors are hopeful about the bill’s passage after the union cabinet last week approved key changes in the proposed legislation.

The GST bill moved by Finance Minister Arun Jaitley in the Rajya Sabha and it’s expected to sail through with the government scrapping the additional levy of one per cent proposed earlier. Technically called the Constitution (122nd Amendment) Bill, 2014, it has proposed to delete Clause 18 of the original bill that intended to compensate the manufacturing states with one per cent additional duty for a period of two years or more for revenue losses. The pan-India tax reform has been passed by the Lok Sabha, but is stuck in the Rajya Sabha, where the government lacks a majority.

Manish Hathiramani, Proprietary Trader and Technical Analyst at Deen Dayal Investments

Uncertainty of the GST bill will continue to prevail in the markets until a decision is taken by the Rajya Sabha. Due to this uncertainty, there is a severe bout of profit taking that can be seen in the markets. However, bullish spirits continue to maintain in the markets. It’s only if the 8,500 spot Nifty were to break, the markets may face some short-term bearishness.

“Uncertainty of the GST bill will continue to prevail in the markets until a decision is taken by the Rajya Sabha. Due to this uncertainty, there is a severe bout of profit taking that can be seen in the markets. However, bullish spirits continue to maintain in the markets. It’s only if the 8,500 spot Nifty were to break, the markets may face some short-term bearishness,” said Manish Hathiramani, Proprietary Trader and Technical Analyst at Deen Dayal Investments.

Source: IANS