Asian indices are pressured today as the dollar firmed overnight and as investors looked ahead to more corporate earnings due during the session. The Shanghai Composite is off 0.04% while the Hang Seng is down 0.51%. The Nikkei 225 is trading lower by 0.42%. US equities traded higher on Thursday as the tech sector was lifted by strong earnings.
Back home, share markets in India have opened the day on a negative note. The BSE Sensex is trading lower by 173 points while the NSE Nifty is trading lower by 24 points. The BSE Mid Cap and BSE Small Cap index both opened the day down by 0.3%.
Barring consumer durables stocks, FMCG stocks and capital goods stocks, all sectoral indices have opened the day in red with healthcare stocks and metal stocks leading the losses. The rupee is trading at 64.12 to the US$.
Food & Tobacco stocks opened the day on a mixed note with Tata Global Beverages and Agro Tech Foods leading the losses. ITC share price gained 1.4% after the company posted a muted 7.4% increase in quarterly net profit from a year earlier as consumption stayed subdued in the run-up to the implementation of the goods and services tax (GST).
The company reported a net profit of Rs 25.6 billion in the quarter ended June compared with Rs 23.9 billion in the same period last year. Revenue rose 4.1% to Rs 138 billion.
Notably, pre-tax profit from cigarettes rose 9% year-on-year to Rs 32.7 billion; revenue from the segment grew 6.6% to Rs 87.7 billion. It is an indication that the operating profit margin expanded, largely on account of price hikes.
The high incidence of taxation on cigarettes was further compounded by the steep increase in taxes announced by the GST Council on 17 July 2017.
The intent of the GST Council behind increasing the compensation cess was to correct an apparent anomaly in cigarette taxation under the new tax regime announced earlier, on account of removal of the cascading effect of Excise Duty which existed in the pre-GST regime.
