Markets continue to trade firmly in green; positive start of European equities aid

Local equities continue to hold firm in green with gains of around half a percent, which has taken Sensex and Nifty above psychologically crucial 26,700 and 7,950 levels respectively. Hopes of additional reforms after government announced important fuel reforms to deregulate diesel prices and a hike in natural gas prices recently, mainly is driving the markets higher. Additionally, markets have also taken a heart from Finance Minister Arun Jaitley’s statement that the constitution amendment bill to implement the long pending Goods and Services Tax (GST) would be introduced in the forthcoming winter session of parliament. With the buying activity being broad-based, broader indices outperformed larger counterparts and were trading with gains in the range of 0.75%-0.95%.

On the global front, receiving a positive hand over from Asian counterparts, European equities too have made an impressive start. Meanwhile, Asian shares rose on Wednesday as upbeat results from two US technology bellwethers and hopes of fresh stimulus from the European Central Bank offset concerns about the outlook for the global economy.

Closer home, most of the sectoral indices on BSE were holding in green, with only exceptions of Metal and Realty counters. On the flip side, stocks from Auto, Healthcare and Capital Goods counters were the prominent gainers. Meanwhile, banking shares also were drawing some sense of relief from good earnings of Kotak Mahindra Bank, which has registered 26.09% rise in its net profit at Rs 444.52 crore for the quarter under review, as compared to Rs 352.54 crore for the same quarter in the previous year. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1511:943; while 93 shares remained unchanged.

The BSE Sensex is currently trading at 26723.74, up by 148.09 points or 0.56% after trading in a range of 26712.21 and 26818.33. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.78%, while Small cap index gained 0.92%.

The gaining sectoral indices on the BSE were Auto up by 2.39%, Capital Goods up by 1.62%, Consumer Durables up by 0.96%, TECK up by 0.82%, IT up by 0.76%, while PSU down by 0.68%, Realty down by 0.53%, Metal down by 0.37%, Bankex down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 3.64%, Bajaj Auto up by 3.30%, Tata Motors up by 2.83%, Dr. Reddys Lab up by 2.20% and Maruti Suzuki up by 2.18%. On the flip side, ONGC down by 2.54%, Hindalco down by 1.32%, NTPC down by 0.91%, Coal India down by 0.73% and ICICI Bank down by 0.72% were the top losers.

Meanwhile, with an aim to implement the Goods and Service Tax (GST) soon and to provide impetus to Indian industry, Finance Minister Arun Jailtley has stated that the revised Constitution Amendment Bill to roll out GST would be introduced in the forthcoming Winter Session of Parliament. By adding further, Finance Minister stressed that the first tranche of compensation to States for their revenue loss arising due to phasing out of Central Sales Tax (CST) may also be taken up in the Winter Session.

The Government proposes to implement the GST from April 1, 2016, and the new Finance Commission is also likely to be set up ahead of its schedule to look into the issues related with the new indirect tax regime.

The proposed GST is one of the biggest taxation reforms in India and will replace existing state and federal levies such as excise duty, service tax and value-added tax (VAT) and will integrate State economies and boost overall growth. Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions. The industry is awaiting its introduction, as GST would boost revenues and aid economic growth.

The CNX Nifty is currently trading at 7978.65, up by 50.90 points or 0.64% after trading in a range of 7974.55 and 7999.30. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 4.62%, Hero MotoCorp up by 3.61%, Bajaj Auto up by 3.34%, Tata Motors up by 2.82% and Dr. Reddys Lab up by 2.28%. On the flip side, DLF down by 3.25%, ONGC down by 2.55%, Hindalco down by 1.15%, NTPC down by 1.08% and ICICI Bank down by 1.05% were the top losers. 

Asian markets were trading mostly in green; with KOSPI Index trading higher by 21.69 points or 1.13% to 1,936.97; Straits Times edging up by 21.69 points or 0.68% to 3,202.74; Jakarta Composite advancing by 44.45 points or 0.88% to 5,073.79; Taiwan Weighted gaining by 94.19 points or 1.09% to 8,748.83; Hang Seng surging by 273.39 points or 1.18% to 23,361.97 and Nikkei 225 rallying by 391.49 points or 2.64% to 15,195.77. On the flip side, Shanghai Composite down by 14.88 points or 0.64% to 2,324.78 and  FTSE Bursa Malaysia KLCI down by 6.92 points or 0.38% to 1,796.22 were the only two losers amongst Asian pack.

European markets were trading higher; France’s CAC was up by 8.2 points or 0.2% to 4,089.44; Germany’s DAX inched up 56.95 points or 0.64% to 8,943.91. On the flip side, UK’s FTSE 100 was down by 3.72 points or 0.06% to 6,368.61 was the lone loser amongst Asian pack.