Benchmarks continue firm trade; Capital Goods, Auto lead

Indian equity markets continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments got support on World Bank’s report that India has figured in top five emerging economies for highest investment commitments despite a drop in investment commitments of $6.2 billion last year. Traders were seen piling position in Capital Goods, Auto and Oil & Gas stocks. Hectic buying activity was witnessed in sugar companies stocks after the Cabinet Committee on Economic Affairs (CCEA) approved an interest-free loan package worth Rs 6,000 crore for the debt-laden industry. In scrip specific development, Motherson Sumi Systems was trading firm after the board of directors of the company at its meeting recommended the issue of Bonus Shares in the ratio of one bonus shares against the two existing shares subject to the approval of the shareholders. Surana Solar was trading in green a day after the billionaire investor Rakesh Jhunjunwala bought shares in the company.

On the global front, the Asian markets were trading mixed while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,100 and 26,700 levels respectively. The market breadth on BSE was positive in the ratio of 1614:852 while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 26767.58, up by 286.33 points or 1.08% after trading in a range of 26493.29 and 26814.45. There were 28 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.06%, while Small cap index up by 1.08%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.86%, Auto up by 1.42%, Oil & Gas up by 1.34%, Power up by 1.19% and Consumer Durables up by 1.14%

The top gainers on the Sensex were BHEL up by 3.67%, Reliance Industries up by 2.64%, Tata Power up by 2.63%, Larsen & Toubro up by 2.17% and Bajaj Auto up by 2.06%. On the flip side, Hindustan Unilever down by 0.21% were the top losers.

Meanwhile, rating agency Crisil in its latest report has stated that the implementation of Goods & services tax (GST) will help reduce logistics costs for companies by up to 30 percent over 3-4 years due to savings in warehousing cost and elimination of check-posts.

Crisil has stated that once the CST (Central sales tax) is phased out, optimisation of warehouses and inventories will accrue in savings on logistics, while the elimination of check posts will also help deliver savings as goods move faster. It added that manufacturers of non-bulk goods spend about 5-8 per cent of sales on logistics. GST will save warehousing costs of 1-1.5 per cent of sales over the next three-four years. On the same time elimination of check-post delays will yield additional savings of 0.4-0.8 per cent, thus taking overall savings to 1.5-2 per cent of sales.

The assessment of the agency showed the consumer durables sector to be the biggest beneficiary of GST, potentially saving 30% of logistics costs from current levels of 7-8% of sales. The sector has the most number of warehouses set up solely to avoid paying CST and hence offers maximum scope for consolidation.

The rating agency though raised concern over the government’s proposal of allowing states to levy an additional tax of 1 per cent on supply of goods in lieu of CST for two years, saying that this is against the core principle of GST, and will defer full benefits of the rollout.

The CNX Nifty is currently trading at 8104.55, up by 82.15 points or 1.02% after trading in a range of 8023.80 and 8116.10. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 6.24%, BHEL up by 3.65%, Reliance Industries up by 2.74%, Tata Power up by 2.49% and HCL Tech up by 2.40%.

On the flip side, NMDC down by 0.86%, Ambuja Cement down by 0.66%, Lupin down by 0.57%, BPCL down by 0.51% and Idea Cellular down by 0.42% were the top losers.

The Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 7.53 points or 0.44% to 1,736.58, Straits Times increased 30.92 points or 0.94% to 3,326.05, Jakarta Composite increased 37.23 points or 0.76% to 4,937.11 and Taiwan Weighted increased 106.63 points or 1.16% to 9,298.50.

On the other hand, Hang Seng decreased 301.88 points or 1.12% to 26,687.64, Nikkei 225 decreased 49.94 points or 0.25% to 20,046.36, KOSPI Index decreased 12.71 points or 0.62% to 2,051.32 and Shanghai Composite decreased 7.5 points or 0.15% to 5,106.04.

The European markets were trading in green; France’s CAC increased 0.13 points to 4,850.35, Germany’s DAX increased 2.54 points or 0.02% to 11,003.83 and UK’s FTSE 100 increased 8.72 points or 0.13% to 6,762.52.