India : Sensex falls 284 pts on profit booking ahead of GST vote

Equity benchmarks extended losses for the fourth consecutive session Wednesday on profit booking ahead of the voting for the Goods & Services Tax (GST) Bill that introduced for discussion in the Rajya Sabha. Weak global cues also caused selling pressure.The 30-share BSE Sensex was down 284.20 points or 1.02 percent at 27697.51 and the 50-share NSE Nifty fell 78.05 points or 0.91 percent to 8544.85.

The broader markets also felt the pinch as the BSE Midcap index lost 1.5 percent and Smallcap 1.1 percent on weak breadth. About two shares declined for every share rising on the Bombay Stock Exchange.

ITC lost 3 percent on fears of higher GST rate on cigarettes that contributed 60 percent to total revenue of the company. Tata Motors shed 3 percent despite 47 percent year-on-year growth in US sales for July.

BHEL, Reliance Industries, HDFC, L&T, TCS, ICICI Bank and Maruti Suzuki were down 1-4 percent while Asian Paints, Sun Pharma, Cipla and Coal India gained 1-2 percent.

HCL Technologies surged 3 percent after stellar performance in June quarter. Profit and revenue grew by 6 percent sequentially. The IT services provider expects FY17 constant currency revenue growth at 12-14 percent and EBIT margin 19.5-20.5 percent.

Majority of experts feel the market has already factored in the likely clearance to the GST Bill by Rajya Sabha members as majority of opposition parties supported the Bill. Hence, they expect some correction in the near term as the Sensex surged 22 percent since February 29 on more than Rs 47,000 crore worth of shares buying by FIIs since March.

Vinod Nair of Geojit BNP Paribas Financial Services said if GST is passed with a favorable tax rate then the market will get a positive momentum.

However, a sustainable recovery will depend upon the actual upgrade in corporate earnings through the implementation of the bill, Nair feels.

Market veteran Vallabh Bhanshali of Enam Securities said he would be more bullish on India once the Bill is implemented. Over the longer term, it is sure to be a GDP and Budget booster, he believes.

After the Finance Minister Arun Jaitley introduced GST Bill for discussion in the Rajay Sabha, every leader of opposition parties said it should be brought before the Parliament as the Finance Bill and not a Money Bill.

Former FM and Congress party leader P Chidambaram, who supported the Constitutional Amendment Bill, said the standard rate for GST should be 18 percent which will be non-inflationary and will plug leakages while the Kerala FM said the rate should be more than 18 percent. Janata Dal-United leader Sharad Yadav also supported the Bill, saying the corruption will reduce post GST implementation.