Benchmarks end higher on penultimate day of F&O series expiry

The penultimate day of September series futures and options (F&O) contract expiry turned out to be a good session for the Indian frontline equity indices as they managed to settle with gains of around quarter percent after three successive disappointing sessions. Sentiments remained optimistic for most part of the session as Finance Minister Arun Jaitley showed the confidence that the government will meet the April 2017 target to implement the Goods and Services Tax as state finance ministers cooperate to make the single tax reform a reality soon. A strong rebound in European shares amid recovery in global crude oil prices further bolstered trading sentiments. Adding the cheer among the investors, the latest edition of the Global Competitiveness Index of World Economic Forum (WEF) indicated that India is the second most competitive BRICS economy and will grow faster than China this year. The report showed India’s competitiveness improved the fastest in 2015-16, jumping 16 places to rank 39th among 138 countries on the index. However, the report also indicated that huge bad loans, lack of infrastructure and stagnating performance on technological readiness are among the major drags on India's global competitiveness. Investors are anxiously awaiting the monetary policy review on October 4, the first to be held under RBI Governor Urjit Patel and the first to be decided by a six-member panel. Furthermore, Asian Development Bank retained its projections for India's economic growth at 7.4% for the current financial year, 0.2 percentage points lower than what was clocked in 2015-16.

Meanwhile, banking stocks edged higher on expectation of 25 bps rate cut by RBI in October review, while good buying was also observed in selected sugar stocks on expectation price rises as sugar production is estimated at 23.5 million metric tone in 2016-17 season, down 6.5% year on year. Moreover, oil marketing companies like ONGC, HPCL and BPCL gained traction on sharp plunge in crude oil prices.

On the global front, Asian equity markets ended mostly lower on Wednesday, with Japanese shares selling off amid a relatively stronger yen. Chinese stocks weakened despite strength in property shares, with thin trading indicating investors' reluctance to participate days ahead of the week-long National Day holiday that starts on October 1. Though, Hong Kong shares were little changed as sentiment cooled following the previous day's robust gain that partly stemmed from perceptions that Democrat Hillary Clinton put in the stronger performance in the first US presidential debate. Meanwhile, European stocks rose in early trade as investor sentiment were buoyed by higher oil prices and a rally in the banking sector.

Back home, after getting a positive start, the local benchmarks traded in tight range above neutral line throughout morning trade, as investors were buying select blue-chip stocks ahead of the September month F&O expiry tomorrow. Second half of the session saw the key gauges capitalize on the momentum and spurt to session’s highest levels in afternoon session. Though, a mild profit booking in dying hour of trade ensured that the key indices shut shops off the intraday highs. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by around half a percent to settle around the crucial 8,750 support level, while Bombay Stock Exchange’s sensitive Index-Sensex accumulated over sixty points and closed above the psychological 28,250 mark. Moreover, broader markets managed a better close than the larger peers as the BSE’s midcap and smallcap indices settled with gains of 0.91% and 1.04% respectively.

The market breadth remained in the favour of Advances, as there were 1641 shares on the gaining side against 1007 shares on the losing side, while 227 shares remain unchanged.

Finally, the BSE Sensex surged by 69.11 points or 0.24% to 28292.81, while the CNX Nifty gained 38.75 points or 0.45% to 8,745.15. 

The BSE Sensex touched a high and a low 28378.56 and 28198.30, respectively. There were 20 stocks advancing against 10 stocks declining on the index. The broader indices ended in green; the BSE Mid cap index rose 0.91%, while Small cap index was up by 1.04%. 

The top gaining sectoral indices on the BSE were Metal up by 1.92%, Realty up by 1.42%, Auto up by 1.24%, PSU up by 1.11% and Capital Goods up by 1.02%, while IT down by 0.26% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 3.25%, Bharti Airtel up by 2.42%, Adani Ports &Special up by 2.27%, SBI up by 1.83% and ONGC up by 1.66%. On the flip side, Reliance Industries down by 1.87%, Coal India down by 0.99%, Hindustan Unilever down by 0.97%, Sun Pharma down by 0.53% and Cipla down by 0.35% were the top losers.

Meanwhile, moving ahead to ensure a timely roll out of the goods and services tax (GST), the Central Board of Excise and Customs (CBEC) has released two more draft rules and their formats on GST returns and refunds. The draft rules mandate taxpayers to file monthly tax returns and specifying procedure for claiming refunds of taxes, interest and fees. Monthly returns are for output supply, input supply and summary accounts and would cover state GST, integrated GST (IGST) and central GST (CGST).

As per the rules for refund, every registered taxable person will be required to furnish a monthly return in specified form (GSTR-3). There is also a provision for electronic furnishing of annual return by every registered taxable person and composition supplier. Also, every taxable person whose aggregate turnover during a financial year exceeds Rs 1 crore, will be required to submit annually a duly certified audited statement. There is also a provision for electronic furnishing of annual return by every registered taxable person and composition supplier.

As regards the refunds, the rules specified the procedure for claiming refund of any tax, interest, penalty, fees or any other amount under GST. The rules also provide for grant of provisional 80 per cent refund to notified exporters and refund to certain persons.  It further specified that in respect of supplies made to an SEZ unit/developer, or supplies regarded as deemed exports, application will have to be filed by said SEZ unit/developer or recipient of deemed export supplies. Earlier, the CBEC had unveiled three sets of draft rules and formats relating to registration, invoice and payments.

The CNX Nifty traded in a range of 8,893.35 and 8,837.80. There were 39 stocks advancing against 12 decliners on the index.

The top gainers on Nifty were Eicher Motors up by 5.55%, Hindalco up by 4.93%, Idea Cellular up by 3.90%, Tata Steel up by 3.60% and Zee Entertainment up by 3.49%. On the flip side, Reliance Industries down by 1.94%, Tech Mahindra down by 1.60%, Coal India down by 1.28%, Hindustan Unilever down by 1% and Sun Pharma down by 0.62% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 45.25 points or 0.66% to 6,852.92, Germany’s DAX increased 88.24 points or 0.85% to 10,449.72 and France’s CAC increased 33.16 points or 0.75% to 4,431.84.

Asian equity markets ended mostly lower on Wednesday as the Japanese yen fluctuated and oil prices turned flat after steep losses overnight on doubts over potential OPEC deal. Japan's Nikkei share average fell, pressured by the yen's recent strength as well as ex-dividend share price adjustments. Meanwhile, Chinese stocks weakened despite strength in property shares, with thin trading indicating investors' reluctance to participate days ahead of the week-long National Day holiday that starts on October 1. Though, Hong Kong shares were little changed as sentiment cooled following the previous day's robust gain that partly stemmed from perceptions that Democrat Hillary Clinton put in the stronger performance in the first US presidential debate. The Taiwan financial markets remains closed due to typhoon.