Benchmarks magnify gains; Nifty above 8400 mark

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels on sustained buying by foreign funds and retail investors amid expectations of positive retail inflation data for October and IIP numbers for September, to be released after trading hours today. Sentiment on the street improved as Prime Minister Narendra Modi invited Malaysian companies to come to India in a big way, saying there are a ‘lot of opportunities’ for them since he is giving high importance to the ambitious 'Make in India' campaign. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 458.04 crore on November 11, 2014. At present, Sensex and Nifty were trading above the crucial 28,100 and 8,400 levels respectively, with gains of over 0.60%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over half a percentage point. On the sectoral front, stocks from Auto, Banking and Infrastructure counters were supporting the markets’ uptrend, while those from Power and Metal counters were adding to the underlying cautious undertone. Meanwhile, Rate-sensitive stocks have gained on hopes of a rate cut by RBI in its December monetary policy update following a fall in inflation numbers.

In scrip specific development, shares of Bayer CropScience have surged after reporting a strong 51% year-on-year growth in net profit at Rs 176 crore for the quarter ended September 30, 2014. On the other hand, shares of Power Grid Corporation declined after reporting 3.06% fall in its net profit at Rs 1201.27 crore for the quarter ended September 30, 2014 as compared to Rs 1239.2 crore for the same quarter in the previous year.

On global front, Asian markets were trading mixed as Tokyo extended a rally after the dollar broke 116 yen for the first time in seven years, while speculation swirls that Japan may put off another unpopular sales tax hike. Back home, Indian rupee recovered slightly by 2 paise to 61.53 against the Greenback in early trade on increased selling of the US dollar by exporters and banks. Besides, the US dollar's weakness against other currencies in international markets and a higher opening in the domestic equity market supported the Indian currency. The market breadth on BSE was positive, out of 2464 stocks traded, 1448 stocks advanced, while 936 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28102.89 up by 192.83 points or 0.69% after trading in a range of 28114.03 and 27958.64. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index gained 0.65%.

The gaining sectoral indices on the BSE were Auto up by 1.56%, Bankex up by 0.93%, INFRA up by 0.66%, FMCG up by 0.62% and Realty up by 0.49% while, Power down by 0.33% and Metal down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.73%, Tata Motors up by 2.66%, HDFC up by 1.48%, Hero MotoCorp up by 1.41% and Axis Bank up by 1.32%. On the flip side, Tata Steel down by 0.83%, Tata Power down by 0.64%, NTPC down by 0.38%, Hindustan Unilever down by 0.19% and Larsen & Toubro down by 0.19% were the top losers.

Meanwhile, Finance Minister Arun Jaitley’s plan to introduce Goods and Services Tax (GST) Constitutional Amendment Bill in the winter session of Parliament, may hit a road block with persisting differences between Centre and states over some key provisions. The empowered committee of state FMs after its meeting has insisted that threshold turnover for levying GST be retained at Rs 10 lakh and petroleum be kept out of the purview of the new tax regime. However, the committee expressed hope that the GST could be rolled out by April 1, 2016, notwithstanding the hitches.

The states had in August decided that the threshold be fixed at Rs 10 lakh and had informed that to the Centre. But Abdul Rahim Rather, chairman of Empowered Committee said that the Centre had written to him suggesting that the threshold annual turnover for levying GST should be increased to Rs 25 lakh from Rs 10 lakh. Rather said that finally the Committee took a decision that they will go by the decision that is already taken that is Rs 10 lakh. The Empowered Committee also reviewed the revenue neutral rate for the GST, comprising C-GST and S-GST, as suggested by a GST sub-committee, which had suggested S-GST rate at 13.91 percent and C-GST rate at 12.77 percent.

As regards the items exempted from the purview of GST, the Empowered Committee suggested that they should be mentioned in the Constitutional Amendment Bill. States want that petroleum, alcohol and tobacco should be kept out of the purview of GST.

The GST whose rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime, which will subsume indirect taxes like excise duty and service tax at the central level and VAT on the states front, besides local levies. The Centre is planning to provide Rs 13,000 crore on account of CST compensation to states for dues till March 2010 and is likely to seek Parliament approval for the same in the ensuing Winter session beginning November 24. The GST Constitutional Amendment Bill was introduced in the Lok Sabha in 2011, had already lapsed and the government is required to come up with a fresh bill.

The CNX Nifty is currently trading at 8,403.80 up by 41.15 points or 0.49% after trading in a range of 8,407.35 and 8,377.95. There were 33 stocks advancing against 17 declining on the index.

The top gainers on Nifty were Tata Motors up by 2.84%, Bajaj Auto up by 2.71%, Ambuja Cement up by 1.78%, Axis Bank up by 1.45% and Hero MotoCorp up by 1.35%. On the flip side, Jindal Steel & Power down by 2.64%, Power Grid down by 2.24%, NMDC down by 1.46%, Tata Steel down by 1.02% and HCL Tech down by 0.85% were the top losers.

Asian markets were trading mixed; Nikkei 225 soared 1.31%, Hang Seng increased by 0.11%, KOSPI Index spurted 0.45% and Jakarta Composite was up by 0.54%. On the flip side, Straits Times dropped 0.15%, Shanghai Composite tumbled by 0.30%, FTSE Bursa Malaysia KLCI declined by 0.24% and Taiwan Weighted was down by 1.49%.