Benchmarks extend gains; Nifty surpasses 7,650 mark

Indian equity markets added gains and are now trading with gains of over half a percent in the late afternoon session on account of buying in frontline blue chip counters. Sentiments got some support with report that indirect tax collection jumped 34.3 percent to Rs 438,291 crore during the first eight months of current financial year. Besides, appreciation in Indian rupee too aided sentiments. The Indian currency was trading higher by 6 paise at 66.77 per dollar at this point of time as compared to its previous close of 66.83. Meanwhile, shares of shipping companies were trading higher after the union cabinet gave nod to the proposal for introducing steps to encourage shipbuilding and ship repair industry in India under the ‘Make in India’ initiative. Real estate companies were trading higher after the union cabinet has approved 20 major amendments to the real estate regulatory bill that seeks to protect home buyers as well as help investments in the real estate industry grow.

On the global front, Asian stock markets were mostly trading lower on Thursday after Wall Street fell for a third day and New Zealand's central bank signaled it had finished cutting interest rates. Furthermore, Oil prices rose marginally after the US government's Energy Information Administration said crude supply in the country declined by 3.6 million barrels. Back on street, stocks from Oil & Gas, Realty and Metal counters were supporting the markets’ uptrend, while those from Auto counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Havells India have rallied on reports that the company has sold Sylvania Malta and Havells Exim Hong Kong to Shanghai Feilo Acoustics for Rs 1,340 crore. Furthermore, Infosys has surged after the company has made an investment of $4 million in CloudEndure, a startup that provides cloud migration and cloud-based disaster recovery software.

The market breadth on BSE was positive, out of 2688 stocks traded, 1633 stocks advanced, while 869 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25226.48, up by 190.43 points or 0.76% after trading in a range of 25034.14 and 25259.06. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.71%, Realty up by 1.40%, Metal up by 1.24%, IT up by 0.93% and TECK up by 0.86%, while Auto down by 0.16% was the only losing index on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.24%, GAIL India up by 2.79%, Hindalco up by 2.51%, HDFC up by 2.32% and NTPC up by 2.23%. On the flip side, Mahindra & Mahindra down by 1.74%, Lupin down by 1.31%, SBI down by 0.73%, Sun Pharma down by 0.63% and BHEL down by 0.56% were the top losers.

Meanwhile, the committee headed by Chief Economic Advisor (CEA) Arvind Subramanian has listed various risk factors in the implementation of Goods and Service Tax (GST) bill. These factors include revenue shortfall and re-emergence of trust deficit between the Centre and the states.

The report stated that one risk of setting a revenue neutral rate (RNR) that is low is the re-emergence of a trust deficit between the Centre and the States as happened in relation to compensation for lost CST revenues after the global financial crisis. The committee has suggested a low RNR of 15 per cent which could translate into bulk of the goods being taxed at 17-18 per cent, with a low rate of 12 per cent on merit goods and high rate of 40 per cent on demerit or sin goods.

Besides, it has observed that revenue shortfall could result in a 'double whammy' for Centre as it would also affect the fiscal deficit and might delay compensation to the states, resulting in trust deficit.  The report said that the revenue shortfall could be overcome by raising taxes on non-GST products like petroleum, alcohol and tobacco. Further, the Centre may also relax the deficit targets, adding that a moderately higher fiscal deficit due to a low GST will benefit consumers, especially poorer ones.

The CNX Nifty is currently trading at 7670.55, up by 58.05 points or 0.76% after trading in a range of 7610.00 and 7677.60. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.25%, GAIL India up by 2.87%, Hindalco up by 2.51%, HDFC up by 2.48% and NTPC up by 2.27%. On the flip side, Mahindra & Mahindra down by 1.69%, Lupin down by 1.25%, Bank of Baroda down by 1.09%, Yes Bank down by 0.87% and Maruti Suzuki down by 0.78% were the top losers.

Asian markets were trading mostly in red terrain; Nikkei 225 was down by 1.32%, Hang Seng down by 0.45%, Taiwan Weighted down by 0.16%, FTSE Bursa Malaysia KLCI down by 0.41%, Shanghai Composite down by 0.49% and Jakarta Composite was down by 0.41%. On the flip side, KOSPI Index was up by 0.2%.

All the major European markets were trading in red; Germany’s DAX was down by 0.49%, France’s CAC down by 0.55% and UK’s FTSE 100 was down by 0.4%.