Markets settle near 3-week low; ITC tanks nearly 7%

Markets closed lower for the fourth session closing near three-week low with ITC contributing the most to the decline after Arvind Subramanian-led GST panel suggested that tobacco products including cigarettes will see a 40% tax.

The taxation is over 25% value added tax (VAT) already charged on current products. Meanwhile, energy majors ONGC and RIL cracked 1.5% each after OPEC decided to keep the output targets unchanged.

The Sensex lost 108 points to end at 25,530 and the Nifty shed 17 to close at 7,765.

The broader markets are, however, outperforming their larger peers with BSE Midcap index ended flat with negative bias and BSE Smallcap index climbed 0.2%.

"The higher than expected US non-farm payroll has strengthened the possibility for the Fed rate hike in the coming FOMC meet on Dec 16th and 17th.

But this has negatively impacted the buying behavior of domestic investors led by volatility in INR.

Besides, the recommendations from the CEA for a standard GST rate in the range of 17-18% and to eliminate all taxes on inter-state trade are very positive to the market.

However, the headwinds from the global market hinder the rally in the market,' said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.

STOCKS IN FOCUS

Drug maker, Sun Pharma continued its Friday’s rally and climbed nearly 3% after the company announced that one of its subsidiaries has received final approval from the US FDA for its ANDA for generic version of Gleevec, Imatinib Mesylate tablets 100mg and 400mg.

Meanwhile, shares of logistics companies saw an uptrend as they would directly benefit if the GST bill gets cleared in the ongoing winter session of the Parliament.

Aegis Logistics, Blue Dart, and Gati surged between 0.5-2%.

Also, metal stocks settled higher as stock specific action continued. Tata Steel jumped 1.5% as the company is believed to nearing a deal to sell-off one of its UK steel plants, according to media reports. Hindalco gained 0.5% after the company planned to sell its sole copper mine to focus on its smelting business in India.

Further, financials witnessed an uptick on buying interest at attractive valuations.

Axis Bank, HDFC twins and ICICI Bank advanced between 0.1-0.6%. Another sector which saw an upward march was the realty sector after Godrej Properties announced that it has received a good response for the Mumbai project.

Sobha, Godrej Properties, Prestige Estates Projects, DB Realty, Housing Development and Infrastructure (HDIL), National Buildings Construction Corporation (NBCC) soared between 0.5-6%. On the flip side, sell-off was seen among all the cigarette makers.

Godfrey Phillip, VST industries and ITC slipped between 2-7%. Oil and Gas exploration majors ONGC and RIL dropped nearly 1.5% after OPEC decided to keep the output targets unchanged. Another notable loser in today’s session was Coal India losing 2.5% as the company is likely to miss output target for 2015-16 by 10 likely to miss output target for 2015-16 by 10 mt. Meanwhile, the auto stocks closed lower as investors booked profits at higher levels. Maruti Suzuki, Tata Motors, Hero Motocorp and Bajaj Auto lost between 0.5-1%.

GLOBAL MARKETS

Asian share markets closed higher on Monday on the back of firm US jobs report that suggested the world's biggest economy is in a condition to handle the anticipated first interest rate hike in almost a decade. Folowing the tandem, Europ[ean stocks are also witnessing an upsurge.

Meanwhile, oil prices tumbled to their lowest since 2009 after the Organization of the Petroleum Exporting Countries (OPEC) decided to keep production high despite depressed demand.