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Sensex Continues Downtrend; Metal Stocks Top Losers
Mon, 13 Nov 01:30 pm

After opening the day flat, Share markets in India witnessed selling pressure and are presently trading in red. Sectoral indices are trading on a mixed note, with stocks in the IT sector and stocks in the auto sector witnessing maximum buying interest. While stocks in the metal sector are leading the losses.

The BSE Sensex is trading down by 140 points (down 0.4%) and the NSE Nifty is trading down by 58 points (down 0.6%). Meanwhile, the BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.1%. The rupee is trading at 64.84 to the US$.

In news from the Goods and Service Tax (GST) space. GST collections are showing fresh momentum and are seen to close the revenue gap according to the latest numbers.

Average shortfall in GST revenue collected by states narrowed to 24% in September and further to 17.6% in October from a high of 28.4% in August, supporting the optimism of state finance ministers that revenues will stabilize further in coming months.

GST, aimed at creating a common nationwide market by scrapping a web of local taxes, has seen a series of tweaks since it was implemented on 1 July, with the most comprehensive changes announced after a GST Council meeting on 10 November when it cut taxes on as many as 200 items to ease the burden on businesses, relaxed penalties and made it easier for small businesses to comply.

The changes are expected to cost the Union and state governments Rs 200 billion a year.

But even before the latest tax cuts were announced, the combined central and state GST revenues, including cess, recovered from the blip seen in August.

In October, the combined GST revenue was Rs 951 billion, up more than 2% from the preceding month.

State GST receipts rebounded with a growth of over 44% in September from the previous month and increased further by 8.5% in October to Rs 356 billion.

The indirect tax reform held the promise of widening the tax base and make taxation more transparent but the sophisticated IT-driven processing of returns envisaged in GST has made compliance tough for many small businesses, which prompted the GST Council to continue some pre-GST era schemes for exporters and suspend the rigorous matching of invoices from suppliers and buyers till the end of the current fiscal year.

GST's Impact on Aam Aadmi's Spending


As we have saying, GST is a much-needed economic reform. It should eventually expand India's narrow tax base and increase government revenues.

That said, every coin has two sides. GST is no exception. It will have its fair share of chaos in the coming months.

After studying these and other finer aspects of GST, our colleague Vivek Kaul, has penned his views on what could go right and wrong. Get a balanced perspective on the entire GST saga from Vivek. The report is titled The Good, the Sad and the Terrible (GST). Claim your own copy of his special report now.

As we have been saying, GST is a much-needed economic reform. It should eventually expand India's narrow tax base and increase government revenues. But only growth will determine how well the Indian economy has adapted to GST.

Our colleague Vivek Kaul, has studied the finer aspects of the GST and predicted what could go right and wrong.

Download his special report - The Good, the Sad and the Terrible (GST).

Moving on to news from stocks in the telecom sector. Idea Celluar share price is in focus today after Vodafone India Ltd and Idea Cellular on said that they have separately agreed to sell their standalone tower businesses to ATC Telecom Infrastructure Pvt. Ltd for about $1.2 billion.

The two operators have about 20,000 towers.

Vodafone and Idea are in the process of merging operations to create the largest mobile operator in the country. While Idea Cellular would get Rs 40 billion, Vodafone would get Rs 38.5 billion if the tower deal goes through prior to their merger.

The sale of the company's standalone business will be achieved through the sale of the entire shareholding of ICISL (Idea Cellular Infrastructure Services Ltd) by the company comprising 60,000 equity shares of Rs10 each to the purchaser.

Earlier this year, Vodafone India and Idea had agreed to merge their operations to create the country's largest telecom operator worth of more than $23 billion with a 35 per cent market share.

The combined entity of Vodafone India and Idea Cellular, which are currently India's number 2 and 3, respectively, would dislodge Bharti Airtel to counter the price war in the world's second-largest telecom market.

At the time of writing, Idea Cellular share price was trading down by 2.3%

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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