Benchmarks continue firm trade in late morning session

After getting a gap-up start, benchmark equity indices continue to trade in fine fettle in late morning deals on emergence of buying by funds and retail investors in frontline blue chip counters. Sentiments got boost with Finance Minister Arun Jaitley exuding confidence in getting the GST Bill passed in the upcoming monsoon session. Jaitley has said that he has spoken to the chief ministers of all states, including those ruled by the UPA and the Congress, and they are a “strong supporter” of the idea. Some support also came with positive global cues and exit poll results showing the BJP winning Assam assembly elections with a resounding mandate. The actual results would be declared on May 19, 2016. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 79.84 crore on May 16, 2014. Led by a spurt in food prices, inflation based on wholesale prices accelerated in April for the first time in 18 months, reinforcing the likelihood that the Reserve Bank of India (RBI) will hold interest rates steady next month. WPI rose 0.34% last month, compared with -0.85% in March. The increase in WPI inflation follows a similar acceleration in retail inflation, which quickened to 5.39% in April from 4.83% in March. Meanwhile, corporate earnings will continue to be in focus, with state-run Syndicate Bank and United Bank of India set to report their Q4 numbers today. Until now, March quarter earnings have been better than expectations, with the exception of the some banking stocks, which continue to struggle because of rising bad loans (NPA).

On the global front, Asian markets trading mostly in green on Tuesday following the overnight rally on Wall Street and higher commodity prices. Japanese shares climbed as the yen nursed last session’s retreat against the dollar, with US crude holding around six-month high and continued gains in industrial metals bolstering investors’ appetite for risk.  Meanwhile, US stocks rose sharply overnight as oil prices hit a fresh 2016 high after a bullish report from Goldman Sachs and Apple shares climbed on news that billionaire investor Warren Buffett took a stake of about $1 billion in the technology giant. Oil prices surged on Monday on back of global supply outages and long-time bear Goldman Sachs taking a more positive view on the market.

Back home, barring Power index which declined 0.16%, all the other indices were in the positive, with Oil & Gas, Realty and Capital Goods indices being significant losers. Further, Financial shares have rebounded in today’s trade after witnessing steep fall yesterday, while oil marketing companies (OMCs) were trading firm after increasing prices of petrol by 83 paise per liter and dieael rates by Rs 1.26 per liter in order to align the domestic rates of the automobile fuels with global prices. In scrip specific development, shares of JK Tyre & Industries have gained after the company reported a jump of 10.20% in its consolidated net profit at Rs 116.77 crore for the quarter ended March 31, 2016 as compared to Rs 105.96 crore for the corresponding quarter in the FY15. Moreover, Piramal Enterprises has rallied after the company reported a robust 89% year on year rise in its consolidated net profit at Rs 180 crore for the fourth quarter ended March 31, 2016.

The market breadth on BSE was positive, out of 2137 stocks traded, 1220 stocks advanced, while 787 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25801.24, up by 148.01 points or 0.58% after trading in a range of 25741.19 and 25830.06. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.41%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.64%, Realty up by 1.45%, Capital Goods up by 1.18%, Consumer Durables up by 1.18% and IT up by 0.63%, while Power down by 0.16% was the only losing index on BSE.

The top gainers on the Sensex were ONGC up by 3.01%, Axis Bank up by 2.57%, GAIL India up by 2.36%, HDFC up by 2.08% and Hero MotoCorp up by 1.52%. On the flip side, NTPC down by 1.71%, Hindustan Unilever down by 1.41%, Bharti Airtel down by 1.00%, SBI down by 0.62% and Adani Ports &Special down by 0.51% were the top losers.

Meanwhile, expressing his confidence on the passage of the Goods and Services Tax (GST) in the upcoming monsoon session, Finance Minister Arun Jaitley has said that the all United Progressive Alliance (UPA) constituents  along with other regional parties like DMK and NCP, are in support of the tax legislation and are urging for its implementation.

Stating that it will be very difficult for Congress to take a opposing view, Jaitley said that Parliamentary vote is the only way forward if there was no agreement and added that the Congress should have had the vision to support it more aggressively because they could claim the original authorship of the idea.' He added that except the 1 percent additional tax proposed on inter-state sales, the bill is the same as had been introduced by the UPA and therefore one has to analyze these afterthoughts.

The Minister said the number count of all those that are supporting the GST shows mixed voices, expect AIADMK, every other regional party has strong interest in passing the legislation because it helps their States. He has spoken to all the chief ministers and even Congress-ruled states are supporting the GST, which seeks to simplify indirect taxation system by clubbing different taxes.

The GST Bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of firm resistance by the Congress, the largest party in the House. The Congress is opposing the Bill in the current form, demanding that a cap on GST rate be included in the Constitution Amendment Bill. The other two changes sought are removal of one per cent additional tax on inter-State transfer of goods and a Supreme Court judge-headed dispute resolution panel.

The CNX Nifty is currently trading at 7903.35, up by 42.60 points or 0.54% after trading in a range of 7889.20 and 7914.10. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.11%, Axis Bank up by 2.76%, GAIL India up by 2.56%, BPCL up by 2.41% and HCL Tech up by 2.31%. On the flip side, NTPC down by 1.43%, Hindustan Unilever down by 1.34%, Aurobindo Pharma down by 0.85%, Eicher Motors down by 0.75% and Tata Motors - DVR down by 0.73% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI was up by 0.67%, Taiwan Weighted up by 0.91%, KOSPI Index up by 0.02%, Hang Seng up by 0.25% and Nikkei 225 up by 0.75%. On the flip side, Shanghai Composite was down by 0.31% and Jakarta Composite was down by 0.11%.