Market Live: Sensex, Nifty open flat after GST Council meet; Sun Pharma leads

10:16 am Gold Update: Gold held steady after hitting its highest in over six weeks earlier today, buoyed by disappointing US jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States.

US job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent.

10:06 am Buzzing: Jewellery stocks witnessed a surge following the government’s announcements of GST rates on gold.

Titan Company, PC Jeweller, Tribhovandas Bhimji Zaveri and Gitanjali Gems rallied 5-8 percent.

The GST Council on Saturday announced that the rate on gold and gold jewellery would be at 3 percent. Having said that, the import duty of 10 percent stays, which will be over and above the 3 percent.

“The government’s decision to apply 3 percent GST on gold is an encouraging step in the current context to stabilise the industry and address the concerns of the millions employed in the industry,” Somasundaram PR, Managing Director, World Gold Council India told news agency PTI.

10:00 am Market Check: Equity benchmarks continued to consolidate in morning trade as investors awaited RBI monetary policy due on Tuesday.

Experts largely expect the central bank to maintain status quo in tomorrow’s policy meeting despite subdued inflation. The RBI will watch out for more economic data and progress of monsoon before deciding further rate cut.

The 30-share BSE Sensex was down 23.98 points at 31,249.31 and the 50-share NSE Nifty rose 6.05 points to 9,659.55 while the broader markets outperformed.

The BSE Midcap and Smallcap indices gained half a percent each on positive market breadth. About two shares advanced for every share falling on the exchange.

9:53 am FM interview: Even as the government scurries to tackle the problem of bad loans, Finance Minister Arun Jaitley stressed that reviving banking sector and investment in private sector top his priority list. The Reserve Bank of India (RBI) and banks are working on a list of defaulters and will put out the list soon, he said.

“My next big target is banks and private sector investment… that is the bull’s eye,” Jaitley told CNBC-TV18 in an exclusive interview. The list of companies to be selected in the first instance for invoking insolvency code is almost ready, he added. “RBI should put out the details soon.”

9:38 am Rupee update: The Indian rupee was trading at 64.33 against the US dollar on Monday, up 10 paise or 0.16 percent from Friday’s closing level.

Pramit Brahmbhatt of Veracity says weak US economic data will be the reason for rupee to strengthen.

The rupee will breach 64.20 a dollar and will head towards 64, he feels. Trading range for the day will be 64-64.50, he said.

The dollar nursed losses, coming close to a seven-month low against a currency basket plumbed after disappointing US employment data prompted investors to pare back their expectations of future US Federal Reserve rate hikes.

9:30 am FII view: Sanjay Mookim of Bank of America Merrill Lynch says the GST council has finalised rates for several previously undecided categories.

More critically, the government has reiterated its intention to stick to the July 1 deadline. A deferral now seems likely only if technology at the government’s end were to be delayed, he feels.

According to him, the GST transition is likely to create cash flow/margin volatility for many companies over the next few quarters. As much of the equity rally seems driven by falling cost of equity, this uncertainty could hurt, he feels.

He stays cautious near term. December-end Sensex target of 30,000 implies little upside, he said, adding he prefers financials.

Also read – Nifty gave positive returns in 6 out of last 10 years in June; on track to hit Mount 10000

9:15 am Market Check: Equity benchmarks started off the week on flat note after the GST Council meet, with the Nifty holding 9650 level.

The 30-share BSE Sensex was down 17.08 points at 31,256.21 and the 50-share NSE Nifty rose 3.50 points to 9,657. About 576 shares advanced against 222 declining shares on the BSE.
Sun Pharma, Cipla, BHEL, Adani Ports, Hero Motocorp, Bharti Infratel, IOC, Indiabulls Housing and Aurobindo Pharma were early gainers while ITC, Lupin, Coal India, Wipro, HDFC and Dr Reddy’s Labs were under pressure.