Markets Slump for Fourth Day; ITC Plunges 7% on GST Worries

Cigarette stocks tanked on the CEA suggestion of a 40% tax on tobacco products under the GST regime.

Markets slump after initial buoyancy on hopes of clearance of the GST Bill. (Photo: Reuters)

Domestic equity indices trade in a range of 300 points on Monday after initial buoyancy over expectation of clearance to the GST Bill and strong US jobs data dissipated quickly.

Investors are eagerly looking forward to the passage of the GST Bill after a panel headed by chief economic adviser Arvind Subramanian recommended a revenue neutral rate of 17-18 per cent.

US’ total non-farm payroll employment increased by 211,000 in November, while the unemployment rate remained unchanged at 5 per cent, the Bureau of Labor Statistics said on Friday. The data, which was better than most forecasts, put to rest all lingering doubts over whether the US Fed will hike rate after almost a decade of easy money policy.

The BSE Sensex slipped 108 points, or 0.42 per cent, to close the day at 25,530, while the Nifty ended 16 points, or 0.21 per cent, lower at 7,765. ITC and CIL were the top losers in the BSE benchmark.

Cigarette stocks tanked on the CEA suggestion of a 40 per cent sin tax on tobacco products under the GST regime.

The broader market outdid the benchmark indices, with the BSE midcap index ending with just 0.10 per cent loss while the smallcap index rose 0.16 per cent. Among the sectoral indices, BSE FMCG was the top laggard, down 2.43 per cent. ITC and Godfrey Phillips were the top contributors to the losses seen in the index.

European markets opened with smart gains. The German DAX rose 1.4 per cent while the French CAC40 traded 1.2 per cent higher. The pan-European Euro Stoxx 50 rose 1.3 per cent while Britain’s FTSE100 gained 0.6 per cent.

Most Asian markets traded higher after strong US jobs data strengthened expectations of a Fed rate hike later this month. Japan’s Nikkei closed one per cent higher while the South Korean Kospi was down 0.54 per cent at close. Hong Kong’s Hang Seng index traded with 0.36 per cent gain. China’s Shanghai Composite ended with mild gains of 0.34 per cent.