Benchmarks trade jubilantly tracking firm global cues

Buoyed by firm global cues, Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Friday, recapturing their crucial 27,900 (Sensex) and 8,600 (Nifty) bastions. Traders took some encouragement with the government setting a target of April 1, 2017 for rollout of the Goods and Services Tax and unveiling a detailed roadmap for its implementation. Finance Minister Arun Jaitley has said the tax rate will be 'optimum' even as there were indications that it may be higher than 18 percent. Some support also came after the India Meteorological Department said that during the week from 28 July to 3 August 2016, rainfall was above long period average (LPA) by 6% over the country as a whole.

Firm global cues too aided domestic sentiments. All the regional counters, barring Chinese Shanghai Composite, were trading in green at this point of time, driven by the Bank of England’s aggressive stimulus measures, but with traders keeping a wary eye on US jobs data due later in the global trading day.

Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 559.49 crore yesterday as per provisional data released by the stock exchanges. On the sectoral front, stocks related to steel sector remained in focus, as the government has decided to extend the Minimum Import Price (MIP) regime on 66 items for a period of two months. Following this, the MIP regime introduced for a six-month period in February 2016 and was due to end on August 5, will now be applicable on these items till October 4, 2016. The textile sector too was trading higher despite reports that India's handloom export has declined by 30% within a year after a gradual rise for several years.

The BSE Sensex is currently trading at 27956.86, up by 242.49 points or 0.87% after trading in a range of 27795.74 and 27966.47. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.77%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Metal up by 1.78%, Capital Goods up by 1.48%, Bankex up by 1.40%, Power up by 1.33% and PSU up by 1.27%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 2.41%, Axis Bank up by 2.13%, SBI up by 2.11%, Tata Steel up by 1.83% and Larsen & Toubro up by 1.55%. On the flip side, Infosys down by 0.30% and Sun Pharma down by 0.23% were the top losers.

Meanwhile, after getting the Rajya Sabha approval the efforts are being made to roll out Goods and Services Tax (GST) from April 1, 2017 and the government has said that it will not impact on inflation even if the rate is kept at 20 percent. Finance Secretary Ashok Lavasa said that all efforts will be made with cooperation of every one to meet the deadline of April, 2017 and there is no such threat. States and the Centre will take a call on rates that will take into account all issues, including the concern related to inflation.

The Finance Secretary said the GST regime would bring more compliance, which would mean more transactions falling into the tax net. Further he said that it will bring more efficiency and better prospects for growth. Besides, Chief Economic Advisor Subramanian said that even if the GST rate is 18-20 percent, there would be no average impact on inflation. Whereas, the Constitutional Amendment Bill did not have the GST rate and the GST Council, which will have representation from both the Centre and states, will now work out a rate. The subsequent legislations Central GST (CGST) and Integrated GST (IGST) are likely to come up for discussions in the next Winter session of Parliament, would mention the GST rate.

The Rajya Sabha has approved the GST bill to replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world's biggest single market. Earlier a panel headed by Subramanian had suggested 17-18 per cent 'standard' rate for bulk of goods and services, while recommending 12 per cent for 'low rate goods' and 40 per cent for demerit goods like luxury car, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 per cent.

The CNX Nifty is currently trading at 8624.05, up by 72.95 points or 0.85% after trading in a range of 8590.15 and 8629.25. There were 47 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.51%, Hindalco up by 2.77%, ICICI Bank up by 2.52%, SBI up by 2.11% and Tata Steel up by 1.87%. On the flip side, Bosch down by 0.43%, Infosys down by 0.26%, Sun Pharma down by 0.12% and Bharti Infratel down by 0.04% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 3.71 points or 0.22% to 1,659.00, KOSPI Index increased 13.48 points or 0.67% to 2,013.51, Nikkei 225 gained 35.58 points or 0.22% to 16,290.47, Jakarta Composite jumped 38.86 points or 0.72% to 5,412.72, Taiwan Weighted added 57.31 points or 0.64% to 9,082.02 and Hang Seng was up by 321.31 points or 1.47% to 22,153.54. On the flip side, Shanghai Composite was down by 3.04 points or 0.1% to 2,979.38.