Markets make positive opening amid strong global cues

With positive opening markets have recovered most of their previous session losses, and are now trading with gains of around a quarter percent on sustained buying by fund and retail investors. Traders were getting encouragement on the prospects for goods and services tax (GST) reform as a panel headed by chief economic adviser backed a lower rate and simpler structure that the opposition Congress party had demanded. Further, strong global cues also supported the sentiment after a better than expected U.S. jobs data for the month of November. However, gains remained capped on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 1,745.73 crore on Friday as per provisional data released by the stock exchanges.  On the sectoral front, all the sectoral indices on the BSE, barring FMCG, are trading in fine fettle led by Consumer Durables, Metal, IT and Realty.

On the global front, the US stocks ended higher, as a solid jobs report made the Federal Reserve's case for a December rate hike even stronger.  US total nonfarm payroll employment increased by 211,000 in November, beating market estimates of 200,000, and the unemployment rate was unchanged at five percent. Asian markets were trading in green after Wall Street rallied on Friday.

Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,800 and 25,700 levels respectively. The market breadth on BSE was positive in the ratio of 1367: 451while 70 scrips remained unchanged

The BSE Sensex is currently trading at 25709.83, up by 71.72 points or 0.28% after trading in a range of 25675.38 and 25785.53. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index gained 0.69%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.88%, Metal up by 0.84%, IT up by 0.64%, Realty up by 0.56% and TECK up by 0.56%, while FMCG down by 0.57% was the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.94%, Hindalco up by 1.77%, Vedanta up by 1.47%, Sun Pharma Inds. up by 1.16% and Hero MotoCorp up by 0.99%. On the flip side, NTPC down by 1.76%, ITC down by 1.67%, ONGC down by 1.05%, Dr. Reddys Lab down by 0.65% and Bharti Airtel down by 0.17% were the top losers.

Meanwhile, the committee headed by Arvind Subramanian on goods and services tax (GST) rates has came up with an amicable solution to the ongoing confrontation of the government and the Opposition, and has suggested 17-18 percent GST rate and dropping of the one per cent additional tax on inter-state sales. An executive summary of the report released alongside suggested the rate to be between 16.9-18.9 percent in a tabular form.

The panel suggested a range of 'standard' tax rate of 17-18 percent for bulk of goods and services, while it recommended 12 percent for 'low rate goods' and 40 percent for demerit goods like luxury car, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 percent. The panel opined against providing a 'band of rates' saying it complicates administration of the tax machinery and suggested that evaluation of GST implementation should not be taken over short-term period, but over longer period of time like 1-2 years.Also, the panel recommended early inclusion of alcohol and petroleum products in GST, saying that Bringing alcohol and real estate within the scope of the GST would further the government's objectives of improving governance and reducing black money generation without compromising on states' fiscal autonomy.

The Arvind Subramanian-headed panel, however, opposed inclusion of GST rate in the Constitution. The Congress has been demanding GST rate be included in the Constitution. Subramanian added that once the GST is implemented the indirect tax regime in India would be the best in emerging market economies and high income countries. The government wants the GST Bill to be approved in the current session of Parliament to meet the April 1, 2016, rollout deadline.

The CNX Nifty is currently trading at 7800.65, up by 18.75 points or 0.24% after trading in a range of 7799.95 and 7825.40. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.36%, Tata Steel up by 2.00%, Hindalco up by 1.77%, Vedanta up by 1.31% and Sun Pharma Inds. up by 1.10%. On the flip side, Cairn India down by 2.48%, ITC down by 2.17%, NTPC down by 1.46%, ONGC down by 1.08% and Dr. Reddys Lab down by 0.83% were the top losers.

Asian markets were trading in green, KOSPI Index increased 1.26 points or 0.06% to 1,975.66, FTSE Bursa Malaysia KLCI increased 5.59 points or 0.34% to 1,673.46, Shanghai Composite increased 14.05 points or 0.4% to 3,539.04, Jakarta Composite increased 35.17 points or 0.78% to 4,543.62, Hang Seng increased 78.37 points or 0.35% to 22,314.26, Taiwan Weighted increased 87.51 points or 1.04% to 8,486.11 and Nikkei 225 increased 292.17 points or 1.5% to 19,796.65.