Benchmarks continue to trade in green in late morning session

Indian bourses continued to trade in green in late morning session on selective buying by funds and retail investors amid firm Asian cues. Sentiments got some support with the government stating that to boost manufacturing sector, it intends to develop industrial corridors and smart cities for providing infrastructure based on modern technology with high-speed communication. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 277.92 crore on December 30, 2014. Moreover, the government has sent out a positive signal to international business community by amending the Arbitration Act to make it mandatory for a judge presiding over commercial disputes to settle cases within nine months. However, some investors remained cautious as the finance ministry has decided not to extend excise duty cuts on automobiles and consumer durables beyond December 31, in order to meet the Budget target of bringing fiscal deficit down to 4.1% of GDP.

On global front, Asian markets mostly rose with investors, looking for fresh triggers, largely refraining from making significant moves. Overnight US stocks fell, after the Standard & Poor’s 500 Index closed on Tuesday at a record for the 53rd time this year, as technology and utility companies sank the most in 18 months. Back home, Indian rupee strengthened by 9 paise to 63.29 against the US dollar in early trade on selling of the American currency by exporters.

On the sectoral front, stocks from Power, Infrastructure and Capital Goods counters were supporting the markets’ uptrend, while those from Auto counters were adding to the underlying cautious undertone. In scrip specific development, Shares of KEC International have gained after new orders worth Rs 1,412 crore in its Transmission & Distribution and Cables businesses. On the other hand, shares of Wockhardt have slipped after voluntarily recalling certain lots of drugs in the US, according to the US Food and Drug Administration (USFDA). The market breadth on BSE was positive, out of 2246 stocks traded, 1343 stocks advanced, while 793 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27447.31 up by 205.53 points or 0.75% after trading in a range of 27507.25 and 27266.49. All the 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index gained 0.63%.

The gaining sectoral indices on the BSE were Power up by 1.05%, Infrastructure up by 1.00%, Capital Goods up by 0.70%, Metal up by 0.45% and PSU up by 0.41%, while Auto down by 0.40% was the losing index on BSE.

The top gainers on the Sensex were BHEL up by 1.82%, Dr. Reddys Lab up by 1.46%, GAIL India up by 1.27%, Hindalco up by 1.22% and Tata Power up by 0.98%. On the flip side, Mahindra & Mahindra down by 1.85%, Bajaj Auto down by 0.80%, HDFC Bank down by 0.43%, Maruti Suzuki down by 0.43% and Hero MotoCorp down by 0.33% were the top losers.

Meanwhile, with states like West Bengal and Tamil Nadu still voicing their concerns over GST implementation, the government has provided 1-year grace period to implement the provision of Goods and Services Tax (GST) after introduction of the new indirect tax regime from April 2016. However, the government has cleared that one-year grace period is only a transitory provision to remove any inconsistency arising from the commencement of the provisions of the Act and all states will have to finally implement it.

The government aims to roll out the goods and services tax (GST) from April 1, 2016. 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 GST rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime. Meanwhile, some states in the country are still opposed the introduction of the GST Bill. Gujarat has proposed that 1% additional tax that manufacturing states can charge on inter-state trade for two years after GST roll out should not be withdrawn. West Bengal is also raised demand for full one time payment of Central Sales Tax (CST) compensation and as well the losses likely to accrue due to abolition of entry tax.

According to the GST Constitutional Amendment Bill, liquor has been completely kept out of the GST, while, petroleum products like petrol and diesel will be part of the new regime from a date to be decided by the GST Council having two-third of its members from states. Also the states where goods originate can levy 1% additional tax over GST to make up for any revenue loss for the first two years. Furthermore, Centre will pay 100% compensation in the first three years, 75% in the fourth year and 50% in the fifth year to the states on account of any possible loss of revenue following implementation of the GST.

The CNX Nifty is currently trading at 8270.55 up by 22.30 points or 0.27% after trading in a range of 8280.05 and 8243.75. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.90%, Indusind Bank up by 1.68%, Cairn India up by 1.49%, Dr. Reddys Lab up by 1.33% and Hindalco up by 1.15%. On the flip side,Mahindra & Mahindra down by 1.84%, BPCL down by 1.00%, HCL Tech. down by 0.96%, Bajaj Auto down by 0.78% and Jindal Steel & Power down by 0.59% were the top losers.

The Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI increased 0.01%, Shanghai Composite added 0.71%, Taiwan Weighted up by 0.08% and Hang Seng was up by 0.44%. On the flip side, Straits Times down by 0.03%.