Key benchmark indices pared losses in morning trade as buying emerged at lower levels. At 10:17 IST, the barometer index, the S&P BSE Sensex, was down 201.42 points or 0.63% at 31,873.36. The Nifty 50 index was down 42.65 points or 0.43% at 9,873.30. The Sensex was trading below the psychologically important 32,000 mark.
Heavy selling in index heavyweight ITC dragged the Sensex lower. Selling in index pivotal Reliance Industries (RIL) also put pressure on the Sensex. Gains in Infosys and HDFC supported the Sensex at lower levels.
The Sensex fell 448.34 points, or 1.40% at the day's low of 31,626.44 in early trade, its lowest level since 10 July 2017. The index fell 163.17 points, or 0.51% at the day's high of 31,911.61 in morning trade. The Nifty fell 123.90 points, or 1.25% at the day's low of 9,792.05 in early trade, its lowest level since 12 July 2017. The index fell 30.60 points, or 0.31% at the day's high of 9,885.35 in morning trade.
Among secondary barometers, the BSE Mid-Cap index was up 0.20%. The BSE Small-Cap index was up 0.19%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, turned positive from negative. On BSE, 1041 shares rose and 992 shares fell. A total of 102 shares were unchanged.
Cigarette stocks tumbled after the Goods and Services Tax (GST) Council yesterday, 17 July 2017, increased the compensation cess on cigarettes by 48.50 paise to 79.20 paise per stick with effect from 18 July 2017.
Cigarette major ITC was down 12.25% at Rs 285.85. The stock hit a high of Rs 293.20 and low of Rs 276.90 so far during the day.
Among other cigarette makers, Godfrey Phillips India (down 4.78%) and VST Industries (down 4.51%), edged lower.
While the peak Goods and Services Tax (GST) rate of 28% stays and so does 5% ad valorem cess on top of it on the cigarettes, the fixed cess has been hiked between Rs 485 and Rs 792 per thousand sticks. The increase in cess is expected to help the government raise around Rs 5000 crore of additional tax revenue, reports suggested.
Index pivotal Reliance Industries (RIL) was down 1.46% at Rs 1,528.70. The stock hit a high of Rs 1,551.50 and low of Rs 1,526.80 so far during the day.
IT major Infosys was up 1.06% at Rs 995.80. The stock hit a high of Rs 1,004.30 and low of Rs 982 so far during the day.
Housing finance major HDFC was up 0.39% at Rs 1,658.20. The stock hit a high of Rs 1,675.95 and low of Rs 1,653 so far during the day.
Metal shares were mixed. Hindustan Copper (up 2.09%), Vedanta (up 0.61%), Steel Authority of India (up 0.49%), National Aluminium Company (up 0.36%), Tata Steel (up 0.32%), Hindustan Zinc (up 0.05%) and JSW Steel (up 0.05%), edged higher. Hindalco Industries (down 0.05%), NMDC (down 0.13%), Jindal Steel & Power (down 0.42%) and Bhushan Steel (down 1.01%), edged lower.
Meanwhile, copper price edged higher in the global commodities markets. High Grade Copper for September 2017 delivery was currently up 0.07% at $2.726 per pound on the COMEX.
State Bank of India (SBI) rose 0.89% to Rs 295.40 after the state-run bank said its insurance arm has filed a draft red herring prospectus with the market regulator Sebi for an initial public offer. The announcement was made after market hours yesterday, 17 July 2017.
SBI announced that its subsidiary, SBI Life Insurance Company, has filed a draft red herring prospectus with the Sebi for an initial public offer of up to 12 crore equity shares of face value of Rs 10 each, representing up to 12% of its paid up equity share capital for cash, through an offer for sale (OFS) by State Bank of India and BNP Paribas Cardif S.A of up to 8 crore equity shares (representing 8% of the paid up share capital) and up to 4 crore equity shares (representing 4% of the paid up share capital), respectively. The offer includes a proposed reservation of up to 1.20 crore equity shares for State Bank shareholders and a reservation of up to 20 lakh equity shares for eligible employees as part of the offer.
Overseas, Asian shares edged lower on growing expectations that the Federal Reserve will take a more cautious approach to raising interest rates.
US market ended little changed yesterday, 17 July 2017, as investors braced for a flood of second-quarter earnings reports later this week. The Dow Jones Industrial Average declined 8.02 points to close at 21,629.72. The S&P 500 declined 0.13 points to close at 2,459.14. The Nasdaq Composite Index rose 1.97 points to close at 6,314.43.
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