Benchmark indices opened lower tracking weakness among the Asian peers and losses in Wall Street after US Federal Reserve Chair Janet Yellen warned of high share valuations, adding to anxiety about future interest rates. The US government will unveil US non-farm payrolls data for April 2015 tomorrow and this is likely to provide clues on the probability of a rate increase by the US Federal Reserve.
Persistent selling by foreign funds amid continued concerns over retrospective taxation, tax on subsidies and geo-political tensions in the Middle-East also dampened sentiment.
The rupee is quoting at 63.78, the lowest level in the year 2015 owing to losses in equities, with foreign investors pulling out of the markets.
At 9.15 AM, the 30-share Sensex is down 130 points at 26,587 while 50-share Nifty has shed 47 points to quote at 8,049 mark.
The top losers on the Sensex are NTPC, Hindalco, Tata Motors, Cipla and Bharti Airtel are down between 1-2%.
Meanwhile, the Lok Sabha yesterday, 6 May 2015, passed the Constitution Amendment Bill in respect of goods and services tax (GST). GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
Among corporate earnings, Hero MotoCorp, Piramal Enterprises, United Bank of India, Titan, Sintex Industries and BASF India will announce their quarter ended 31 March 2015 earnings today.
Benchmark indices plunged by over 2% on Wednesday, with the Sensex breaking its crucial psychological level of 27,000 and the Nifty slipping below its crucial 200-DMA mark, amid a global bond rout.
GLOBAL MARKET
Asian stocks fell on Thursday, taking the lead from losses on Wall Street, while a rise in euro zone debt yields amid a global bond rout kept the euro hovering at a two-month peak versus the dollar.
As European deflation fears have ebbed, a seeming reversal of trades linked to the European Central Bank's big quantitative easing has resulted in a sell-off in core European bonds and equities this week, rattling investors across asset classes.
The Shanghai Composite Index SSEC was down 1.8%, extending its losses so far this week to 6.4%. The index is up an impressive 28 percent so far this year on views that Chinese policy easing would shore up equities. The steep gains, however, have triggered expectations of a sharp correction.
Tokyo's Nikkei lost 1.1% on its first trading day of the week. The Japanese financial markets were closed from Monday to Wednesday for public holidays.
The U.S. stocks ended weaker on Wednesday after U.S. Federal Reserve Chair Janet Yellen warned of high share valuations, adding to anxiety about future interest rates.
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