Markets trade near high points of the day; Realty stocks surge

Markets have strengthened further in the early noon trade and the benchmark indices are trading near the high points of the day, on account of buying in frontline blue-chip stocks. Domestic investors even went ahead to overlook the gloomy Asian market opening which fell, as investors waited for clarity on further easing steps and where key policy rates are headed when the European Central Bank meets later in the day. Though the indices briefly showed some signs of easing in early trades but soon gathered support around their crucial 8900 (Nifty) and 28,900 (Sensex) levels. Sentiments got some support with Finance Minister Arun Jaitley’s statement that the government is 'running against time' for the implementation of GST, but added that he would certainly like to give it a try. He said the new GST, once implemented, would have a transformational impact by creating a common market in the country, while also acting as a transfer mechanism that would aid poorer states. Adding the optimism among investors, Economic Affairs Secretary Shaktikanta Das has said that implementation of GST will bring small and medium enterprises (SMEs) into the national value chain and committed many more reforms. Meanwhile, Metal and mining stocks jumped as Chinese trade data topped forecasts and imports recorded their first annual rise since late 2014. Stocks related to aviation sector gained traction in early trade as the domestic air travel surged with 26.2 per cent traffic growth in July, while globally domestic travel demand climbed 3.8 per cent in July, compared to the same month last year. However, IT and TECk stocks succumbed to heavy selling pressure as TCS has given a cautious outlook for the coming quarters, stating that clients are holding back on discretionary spending.

On the global front, Asian markets trading mostly in red on Thursday as investors stayed cautious ahead of the release of European Central Bank's monetary policy decision later in the day. The ECB is expected to leave interest rates unchanged, but may announce an extension of its quantitative easing program.  However, market participants got some comfort after China reported unexpectedly strong trade and Wall Street’s Nasdaq index hit a record-high close. China's imports rose 1.5% year-on-year in August, the first rise in 22 months and beating expectations in a positive sign for the world's second-largest economy.

Back home, stocks from Realty, Metal and Auto counters were supporting the markets’ uptrend, while those from IT and Teck counters were adding to the underlying cautious undertone. In scrip specific development, Alstom T&D India has declined after the company reported net loss of Rs 197.41 crore in Q1 June 2016 compared with net profit of Rs 10.15 crore in Q1 June 2015. On the other hand, Technofab Engineering jumped after the company bagged two new orders from Power Grid Corporation of India (PGCIL), amounting to Rs 227 crore.

The market breadth remained optimistic as there were 1513 shares on the gaining side against 830 shares on the losing side, while 159 shares remained unchanged.

The BSE Sensex is currently trading at 28991.20, up by 64.84 points or 0.22% after trading in a range of 28854.56 and 28996.71. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index up by 0.73%.

The top gaining sectoral indices on the BSE were Realty up by 1.54%, Metal up by 1.37%, Auto up by 0.80%, Capital Goods up by 0.77% and Oil & Gas up by 0.74%, while IT down by 2.90% and TECK down by 2.15% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.24%, Bajaj Auto up by 3.50%, Hero MotoCorp up by 3.33%, ONGC up by 2.35% and Maruti Suzuki up by 1.68%. On the flip side, TCS down by 5.84%, Infosys down by 2.27%, Wipro down by 1.89%, Tata Motors down by 1.21% and GAIL India down by 1.07% were the top losers.

Meanwhile, terming the implementation of Goods and Services Tax (GST) a top priority, Finance Minister Arun Jaitley has expressed his confidence that the tax rates will probably stabilize once the indirect taxation regime is put in place. He further said that implementation of GST from 1st April next year is very stiff target and they are running against time but they want to give a try. He added that the challenges for the government are to put public sector bank on track and continue to operationalise stalled infrastructure projects to further boost economic activity.

Finance Minister said that “We have kept a very stiff target and the reason is that there is a great national aspiration in support of a reform that GST is, and state after state within a period of 20-25 days have kept on ratifying it because they stand to benefit the most.'

Jaitley said the procedural formalities of collecting proceedings of all the states and sending it to the President for ratification is on. Once the assent is granted by President Pranab Mukherjee, the constitution amendment bill will have to be notified. Further he said that after notification and constitution of the GST Council there are obviously some pending issues, which the council will have to resolve. The constitution amendment bill for GST has received Parliament’s nod last month and has been ratified by more than 50% of the states.

The CNX Nifty is currently trading at 8933.70, up by 15.75 points or 0.18% after trading in a range of 8896.00 and 8936.70. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.28%, Bajaj Auto up by 3.65%, Hero MotoCorp up by 3.41%, Grasim Industries up by 3.04% and ONGC up by 2.35%. On the flip side, TCS down by 5.61%, Yes Bank down by 2.80%, BHEL down by 2.60%, Tech Mahindra down by 2.35% and Infosys down by 2.21% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 0.28%, Jakarta Composite slipped 0.12%, KOSPI Index shed 0.1%, Shanghai Composite fell 0.03% and FTSE Bursa Malaysia KLCI was down by 0.04%. On the flip side, Taiwan Weighted rose 0.04% and Hang Seng was up by 0.48%.