MODERATE LOSSES

Indian frontline indices continued trading on an unexciting note for yet another session. After witnessing high volatility in the early trades the benchmarks remained sluggish throughout the session thereafter and traded in a narrow range, lacking any significant upside triggers. Investors turned apprehensive over the global economic growth prospects in light of the current sovereign debt crisis looming across the western nations right from Europe to the US. Mounting apprehensions over US sovereign debt troubles after Standard & Poor's put the economy on creditwatch negative, which marked the second credit warning to the US in past two days kept investors on the sidelines. European benchmarks receded once again, dragged by bank stocks as marketmen feared that financial sector stress tests may throw up some unwanted surprises to add to the region's debt crisis. Back home, the better than expected first quarterly earnings announcement by Tata Consultancy Services, India's largest software services exporter along with strong growth of around 30% recorded in indirect tax collections in the April-June quarter, lifted market sentiments in the early session. However, nervy investors started to take profits sooner than later as they lacked conviction to pile up long positions amid the burgeoning global uncertainties. Investors kept a close eye on the progress of monsoon rains as well which is critical to India's agrarian economy. Reports that India's monsoon slipped into the red in the first two week of July with the country receiving 3% deficient rains since its start in June, limited the upside chances of the local indices. However, the oil marketing PSUs like HPCL and BPCL along with Airline stocks like Kingfisher, Jet Airways and Spicejet garnered some traction in the session as the international crude oil prices plunged overnight on fading hopes of Fed extending its bond buying programme. In the meantime, the RBI released India's services exports numbers for the month of May which increased by 3.2% while imports of services increased by 2.8% in the month.
Back on street, the benchmark which touched the highest point in early trading hours, drifted to the lowest levels of the session in no time. The indices found some support around the 5,550 and 18,500 levels as selling pressure got arrested but the key gauges failed to add strength to claw back into the green terrain throughout the session thereafter. The choppy session saw the benchmarks snapping their two session uptrend and settling with moderate losses. The NSE's 50-share broadly followed index Nifty, shed one third of a percent and closed below the crucial 5,600 support level while Bombay Stock Exchange's Sensitive Index, Sensex slipped by over fifty points and closed above the psychological 18,550 mark. The broader markets too traded on an unimpressive note and closed in a flat trajectory, still managing to outperform their larger peers. On the sectoral front, it was the Metal counter which languished at the bottom of the table with 0.85% losses as global commodities witnessed a broad based selloff after Fed Chairman dimmed hopes of further stimulus for US economy. The rate sensitive pockets like Auto, Realty and Bankex too remained under pressure on expectations of possible rate hike by RBI later this month. On the other hand, the IT pack went home with moderate gains because TCS' strong quarterly earnings announcement encouraged investors to bet on other IT stocks. The markets consolidated on weaker volumes compared to Thursday while the markets breadth remained negative as there were 1384 shares on the gaining side against 1472 shares on the losing side while 135 shares remained unchanged.
Finally, the BSE Sensex slipped by 56.28 points or 0.30% to settle at 18,561.92, while the S&P CNX Nifty lost 18.70 points or 0.33% to close at 5,581.10.
The BSE Sensex touched a high and a low of 19,619.65 and 18,513.22, respectively. The BSE Mid cap index was down by 0.11% and Small cap index was up by 0.08%.
The top gainers on the Sensex were TCS up 2.03%, Mahindra & Mahindra up 0.83%, Reliance up 0.74%, Wipro up 0.74% and HDFC Bank up 0.61%.
On the flip side, Tata Motors down 2.61%, Sterlite Inds down 2.01%, ONGC down 1.94%, Cipla down 1.58% and Tata Power down 1.33% were the top losers on the index.
The top gainers on the BSE sectoral space were IT up 0.37%, Power up 0.04%, TECk up 0.02% and Capital goods (CG) up 0.01%, While Metal down 0.85%, Auto down 0.59%, Realty down 0.54%, PSU down 0.53% and FMCG down 0.42% was the top losers on the BSE sectoral space.
Meanwhile, despite softening industrial production for the first quarter of 2011-12, the indirect tax collection for the first quarter April-June 2011 showed robust growth of Rs 96,000 crore, which is 30% more than last year's Rs 73,626 crore for the same period. On the other hand, the collections from Customs in first quarter have risen by 34% to Rs 38,168 crore as against Rs 28,490 crore last year. This surge in tax collection shows the increase in economic activities of the country.
Collections from excise duties and service tax have also shown robust growth, excise duties increased by 25% to Rs 37,253 crore and service tax rose by 34% to Rs 20,376 crore. The overall growth required to meet the indirect tax budget estimates is 15%. During the first quarter of 2011-12, the gross direct tax collections increased by 24% at Rs 1,04,136 crore against Rs 84,041 crore last year.
With the jump in the indirect tax collection government is hoping to make up for the losses incurred due to the removal of customs and excise duties on crude oil and petroleum product. In June, government had removed 5% custom duty on crude and same on diesel and petrol. The loss estimated by the finance ministry for nine months of this fiscal is pegged at Rs 37,000 crore of which the Central share is likely to be about Rs 23,000 crore.
The jump in tax collection is on the government's expectations. Earlier, finance minister has expressed his confidence on meeting the budget targets of both direct and indirect tax collection. Finance ministry has  also asked the Central Board of Excise and Customs (CBSC) to make up for the revenue loss occurred due to the removal of customs and excise duties on petroleum products through extra collection revenue collection from services sector which contributes 60% of county's GDP, but has only 20% share in indirect tax collection.
The Directorate General of Central Excise Intelligence (DGCEI), CBEC revenue intelligence arm, has filed cases against some big corporate tax evaders. During first quarter of 2011, the DGCEI has booked 80 cases against many of these big corporate houses and slapped a tax penalty demand of Rs 1,650 crore. 
The S&P CNX Nifty touched high and low of 5,631.70 and 5,562.75, respectively.
The top gainers of the Nifty were TCS up 2.04%, HCL Tech up 1.18%, Powergrid up 1.10%, M&M up 1.08% and BPCL up 0.97%.
On the flip side, Tata Motors down 3.11%, RPower down 2.44%, Sesa Goa down 2.36%, GAIL down 2.34% and ONGC down by 1.89% were the top losers on the index.

The European markets were trading in red. France's CAC 40 lost 0.44%, Britain's FTSE 100 declined by 0.10% and Germany's DAX down by 0.34%.

Asian equity indices finished the day's trade on mixed note on the last trading day of the week as investors remained cautious following a weak lead from Wall Street. The Nikkei rose about 0.40 percent, buoyed by European investors scooping up cyclical shares, but was capped by the top of the narrow range it has traded in for most of the week, with the majority of big players on the sidelines ahead of bank stress tests in Europe, while Hong Kong fell 0.30 percent in the trade on concerns that US lawmakers will not be able to agree a deficit-cutting budget that will help avoid a debt default by Washington.