Benchmarks move higher in early deals; Sensex regains 26,400 mark

Indian equity benchmarks are trading in fine fettle in early deals with key gauges trading above their crucial 8,100 (Nifty) and 26,400 (Sensex) levels, on value-buying in recently battered bluechips. Sentiments remained upbeat with Finance Minister Arun Jaitley’s statement after a meeting of Empowered Committee of state FMs on the long awaited indirect tax reform that every state has either supported or accepted the idea of the pan-India Goods and Services Tax (GST) except Tamil Nadu. Appreciation in Indian rupee too aided sentiments. The Indian rupee strengthened against the US dollar in early trade at 67.19 from its previous close of 67.27. Some support also came from Asian markets, which turned positive after a choppy start. However, gains remained capped as participants continue to remain cautious ahead of the two-day FOMC meet that ends today and the BOJ meet later today amid fears that the UK might leave the European Union.

Back home, the market breadth indicating the overall health of the market was strong, with 1231 shares gaining and 451 shares declining, while a total of 89 shares were unchanged. On the sectoral front, shares of public sector oil marketing companies (OMCs) edged higher, as the global crude prices have fallen to their three weeks low. Sugar stocks continue to rally for yet another day on hopes of improving financial health on the back of rising sugar prices.

The BSE Sensex is currently trading at 26463.31, up by 67.60 points or 0.26% after trading in a range of 26446.59 and 26531.90. 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 0.49%, while Small cap index gained 0.64%.

The top gaining sectoral indices on the BSE were Telecom up by 1.26%, Capital Goods up by 0.93%, Utilities up by 0.81%, Power up by 0.72% and Industrials up by 0.67%, while Consumer Durables down by 0.02% was the lone losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.38%, Larsen & Toubro up by 1.03%, GAIL India up by 1.01%, Hero MotoCorp up by 0.96% and BHEL up by 0.91%. On the flip side, ICICI Bank down by 0.92%, Dr. Reddys Lab down by 0.46%, HDFC down by 0.29%, Coal India down by 0.24% and TCS down by 0.22% were the top losers.

Meanwhile, on the first day of two day meeting in Kolkata, the Empowered committee of state finance ministers on Goods and Services Tax Bill (GST) has arrived at an agreement that there would be no constitutional cap on the final GST rate. Finance Ministry Arun Jaitley said that it is left for the judgment of the GST council since there may be need to increase rates at times of a disaster. He also said that “As far as 1 percent additional tax for first 3 years is concerned, I have made it clear that I am flexible on that issue.”

Jaitley further said that there was complete consensus on the issue of GST. However, there was no agreement on what will be the revenue neutral rate under GST and the issue of outlining the dual control mechanism. Both these issues will be discussed at the next meeting of the empowered committee which will be held in July by the Empowered Committee. Jaitley also said that though all the states agreed on the idea of GST, Tamil Nadu has expressed some reservations. 

A cap on rate to be included in the Constitution Amendment Bill, which is stuck in Rajya Sabha, has been one of the main demands of the Congress. As the Congress has given its support to the Bill, thereby easing the way for GST passage, India is moving closer to becoming one big market with GST, the biggest tax reform of the country. The Centre is planning to roll out the indirect tax from the next financial year beginning 1 April 2017.

The CNX Nifty is currently trading at 8127.65, up by 18.80 points or 0.23% after trading in a range of 8123.15 and 8147.60. There were 37 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.23%, Idea Cellular up by 1.75%, Hero MotoCorp up by 1.14%, Larsen & Toubro up by 1.07% and BHEL up by 0.91%. On the flip side, Bharti Infratel down by 1.62%, Eicher Motors down by 0.82%, ICICI Bank down by 0.78%, Dr. Reddys Lab down by 0.56% and Bosch down by 0.51% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 0.76 points or 0.05% to 1,626.87, KOSPI Index gained 0.97 points or 0.05% to 1,973.00, Taiwan Weighted increased 5.41 points or 0.06% to 8,581.53, Shanghai Composite surged 43.59 points or 1.53% to 2,885.78, Nikkei 225 added 50.7 points or 0.32% to 15,909.70 and Hang Seng was up by 92.83 points or 0.46% to 20,480.36. On the flip side, Jakarta Composite was down by 23.73 points or 0.49% to 4,797.86.