Markets make a good start; Nifty reclaims 8200 level

Markets have extended their gains for the sixth day on Friday; major indices after some early hiccups have gained momentum and were trading with good gains of over half a percent in the very first hour of trade. Once again apart from the blue-chips, broader markets too are moving in tandem. Traders were getting some encouragement with the good progress of monsoon in the country, a top Indian Meteorological Department (IMD) official has reportedly said that monsoon is expected to be normal in June boosting sowing of kharif crops but there are concerns about pick up in rainfall in the next month.  Markets were also getting some support with Finance Minister Arun Jaitley’s assurance to the global investors that the Narendra Modi government is making efforts to allay their concerns over expediting reforms, the tax regime and policy stability. The sugar stocks continued buzzing, after Prime Minister Narendra Modi told a group of sugarcane farmers from Uttar Pradesh that his government is working with a vision of making the farmers and the villages self-reliant and prosperous. However there was still some cautiousness on reports that foreign institutional investors (FIIs) were net sellers in the equity segment worth Rs 7.84 billion on BSE, NSE and MCX-SX on June 18, as per provisional data. Back on street, metal, oil & gas and capital goods were powering the markets higher, with non of the indices entering the red yet.

The BSE Sensex is currently trading at 27268.41, up by 152.58 points or 0.56% after trading in a range of 27202.38 and 27304.60. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index gained 0.49%.

The top gaining sectoral indices on the BSE were Metal up by 1.15%, FMCG up by 0.69%, Oil & Gas up by 0.68%, Capital Goods up by 0.66%, IT up by 0.58%.

The top gainers on the Sensex were Hindalco up by 2.04%, HDFC up by 1.95%, Vedanta up by 1.73%, ONGC up by 1.44% and Hero MotoCorp up by 1.09%. On the flip side, Tata Motors down by 1.52%, Cipla down by 0.48%, HDFC Bank down by 0.44%, BHEL down by 0.31% and Hindustan Unilever down by 0.14% were the top losers.

Meanwhile, in its bid to roll out GST from April 1, 2016, the Finance Ministry has set up two committees to suggest tax rates and look into IT preparedness for the new indirect tax regime. A committee headed by Chief Economic Adviser (CEA) Arvind Subramanian has been formed to come up with a revenue neutral rate or a rate at which there will be no revenue losses to states under the proposed GST regime, while a steering committee too has been formed under the co-chairmanship of additional secretary, department of revenue, and member secretary, Empowered Committee of State Finance Ministers.

The Finance Ministry in its statement said that the committee formed under the Finance Ministry's CEA would “recommend possible tax rates under GST that would be consistent with the present level of revenue collection of Centre and states”. While making recommendations, it would take into account expected levels of growth of economy, different levels of compliance and broadening of tax base under Goods and Services Tax (GST).

Steering Committee has members from Revenue Department, Central Board of Excise and Customs, Goods and Services Tax Network (GSTN) and representatives of state governments. It would monitor the progress of IT preparedness of GSTN/CBEC/Tax authorities, finalisation of reports of all the sub-committees on different aspects relating to the mechanics of GST and drafting of CGST, IGST and SGST laws/rules. The Committee would monitor the progress on consultations with various stakeholders like trade and industry and training of officers.

The Constitutional Amendment Bill for rolling out of GST has been referred to a Rajya Sabha Select Committee. GST will subsume most indirect taxes levied by the central and state governments such as excise duty, service tax, VAT and sales tax, the new regime proposes to facilitate a common market across the country, leading to economies of scale and reducing inflation through an efficient supply chain.

The CNX Nifty is currently trading at 8212.55, up by 37.95 points or 0.46% after trading in a range of 8195.65 and 8217.95. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.12%, ONGC up by 1.90%, Vedanta up by 1.85%, HDFC up by 1.66% and Cairn India up by 1.54%. On the flip side, Tata Motors down by 1.58%, Power Grid Corpn down by 0.77%, Cipla down by 0.73%, Hindustan Unilever down by 0.38% and Zee Entertainment down by 0.37% were the top losers.

All the Asian markets except the Chinese market were trading in green; Shanghai Composite was down by 98.04 points or 2.05% to 4,687.32.

On the other hand, Straits Times was up by 5.04 points or 0.15% to 3,305.46, FTSE Bursa Malaysia KLCI increased by 6.19 points or 0.36% to 1,724.31, KOSPI Index added 11.32 points or 0.55% to 2,053.20, Taiwan Weighted was higher by 28.54 points or 0.31% to 9,218.37, Jakarta Composite added 37.92 points or 0.77% to 4,983.42, Nikkei 225 gained by 115.12 points or 0.58% to 20,105.94 and Hang Seng surged by 285.08 points or 1.07% to 26,979.74