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Indian equity benchmarks gave up intra-day gains to close marginally lower on Tuesday on emergence of fag-end selling in IT, TECK and Banking stocks and weak opening in European stock markets. Domestic markets had started strong by extending yesterday’s gains, as traders got encouragement with Crisil Ratings’ report that non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs) are likely to see revival in their profitability in the current fiscal, helped by the flexibility to set lending rates under the new regulatory framework for MFIs and lower credit cost.
Key gauges extended gains in afternoon deals, as India's dominant services industry expanded at the fastest pace in over eleven years in June amid strong demand but stubborn inflation remains a concern as prices charged rose at the sharpest rate in almost five years. The S&P Global India Services Purchasing Managers' Index rose to 59.2 in June from 58.9 in May, its highest since April 2011. However, benchmark indices made a U-turn in the final hour to end in red as concerns about steep hikes in COVID-era interest rates and their impact on global growth kept investors cautious globally.
Nifty futures opened at 15880.00 points against the previous close of 15836.95 and opened at a low of 15752.50 points. Nifty Future closed with an average movement of 262.10 points and a decline of around 70.95 points and 15766.00 points...!!
On the NSE, the midcap 100 index will decline 0.27% and smallcap 100 index is closing decline 0.07%. Speaking of various sectoral indices, the NSE saw gains in only Metal and Pharma stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, August gold opened at Rs.52199, fell from a high of Rs.52279 points to a low of Rs.52086 with a rise of 37 points, a trend of around Rs.52159 and July Silver opened at Rs. 58798, fell from a high of Rs.58978 points to a low of Rs.58055, with a decline of 394 points, a trend of around Rs.58094.
Meanwhile, Revenue Secretary Tarun Bajaj has said that the rate rationalisation exercise of the GST Council is a result of introspection of GST, and policymakers do not have a ‘fetish’ to raise the tax rates to the revenue-neutral level of 15.5 per cent. He said the government intends to continue with the top GST slab of 28 per cent for luxury and sin goods. But, he said the government is open to discussing narrowing down the three slabs of 5, 12 and 18 per cent into two. On the industry demand for bringing petroleum products under GST net, he said since fuel constitutes a larger part of their revenues, both the Centre and states have some apprehension.
Bajaj said ‘we will have to wait for some time. Of the 5, 12, 18 and 28 per cent, we would have to continue with 28 per cent because in a developing economy, in an economy with so much of income disparity, there would be some luxury and sin items that would and should attract a higher rate of taxation. But, whether on 5, 12 and 18 (per cent), we can bring down to 2 rates to start with and then see how the country grows and whether there is a capacity to bring it to one rate or not is something to be seen. It is a very difficult challenge.’
Technically, the important key resistances are placed in Nifty future are at 15808 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 15888 - 15909 levels. Immediate support is placed at 15676 – 15606 levels.
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