Benchmarks trim gains; trade continues in green

After a smart up move in opening trades, Indian equity markets pared some gains and are currently moving in a narrow range. The BSE benchmark moved up 52 points, while NSE benchmark was up by 22 points as market participants indulged in widening their bets on positive global cues after oil exporting nations agreed to cut crude production. Besides, covering-up of short positions ahead of today’s expiry of September series in the derivatives segment too gave domestic equities a push. Sentiments got some support with Finance Minister Arun Jaitley’s statement, who reacting to 32-point jump on World Economic Forum’s Global Competitiveness Index in two years, has said that it shows India has covered a long distance and is well on its way to emerge as a major player in global economy. Though caution prevailed in markets with domestic investors and foreign funds anxiously awaiting the next week’s RBI monetary policy, the first under the new RBI Governor, Urjit Patel and the first to be decided by the six-member panel. Also, the RBI Deputy Governor SS Mundra said that Banks may have to set aside more money as buffer against bad loans (non-performing assets) as recoveries are becoming difficult and resolutions few and far between. Meanwhile, shares of liquor companies rallied after the government of Kerala has decided not to shut down liquor outlets on Gandhi Jayanti.

On the global front, energy companies led a rally in Asian markets as investors welcomed news that OPEC nations planned to cut oil production for the first time in eight years in an effort to reduce a global glut. Overnight, oil prices surged 5.3%, their biggest gain in more than five months. Gains in Japanese stocks were also supported by a weaker yen against the dollar, with the Japanese currency down 0.5%. In China, the Shanghai Composite rose as liquidity flows in the market were watched ahead of a major holiday period next week. Downward pressure on China’s trade is growing due to various destabilizing factors. Overnight, US markets ended higher despite fluctuation through the day, supported by gains in crude prices.

Back home, stocks from Oil & Gas, Consumer Durables and Auto counters were supporting the markets’ uptrend, while those from FMCG counters were adding to the underlying cautious undertone. In scrip specific development, Cubex Tubings has jumped after the company has received contract from ‘ORPIC’ for supply of tubes for approximate value of $3.622 million amounting Rs 23.50 crore. Moreover, Arrow Greentech has gained after the company received one more United States Patent and Trademark Office (USPTO) Patent grant titled ‘Self Destructive Irreversible Security Packaging Film’ from the United States Patent Office on September 27, 2016.

The market breadth remained optimistic as there were 1380 shares on the gaining side against 993 shares on the losing side, while 174 shares remained unchanged.

The BSE Sensex is currently trading at 28345.35, up by 52.54 points or 0.19% after trading in a range of 28325.12 and 28475.57. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20%, while Small cap index up by 0.55%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.03%, Consumer Durables up by 0.66%, Auto up by 0.60%, Realty up by 0.58% and PSU up by 0.56%, while FMCG down by 0.23% was the sole losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.99%, Mahindra & Mahindra up by 1.57%, Reliance Industries up by 1.40%, Power Grid up by 1.40% and ONGC up by 1.03%. On the flip side, ICICI Bank down by 1.42%, Hindustan Unilever down by 0.81%, ITC down by 0.77%, Bharti Airtel down by 0.53% and Axis Bank down by 0.46% were the top losers.

Meanwhile, in order to help the roll-out of the goods and services tax (GST), the Cabinet Committee on Economic Affairs (CCEA) has cleared IT project Saksham, a new indirect tax network for systems integration of the Central Board of Excise and Customs (CBEC). The total project cost is estimated around Rs 2,256 crore, which will be incurred over seven years and the upgrade of the IT systems will be carried out while keeping the existing taxpayer services running.

The government has stated that the project would facilitate extension of the Indian Customs Single Window Interface for Facilitating Trade (SWIFT) and other taxpayer initiatives under ‘Digital India’ and ease of doing business of the CBEC. The implementation strategy for the project will be to ensure readiness of CBEC's IT framework by April, 1, 2017, when GST is to be introduced.

Project Saksham will help in implementation of GST, extension of the Indian Customs Single Window Interface for Facilitating Trade (SWIFT) and other taxpayer-friendly initiatives under Digital India and Ease of Doing Business of CBEC. All taxpayers/importers/exporters/dealers under various indirect tax laws administered by CBEC-presently about 36 lakh- are likely to go up to over 65 lakh after introduction of GST. CBEC's IT structure needs to integrate with the Goods and Services Tax Network (GSTN) for processing of registration, payment and returns data sent to CBEC as well as act as a front-end for other modules like audit, appeal and investigation.

The CNX Nifty is currently trading at 8767.40, up by 22.25 points or 0.25% after trading in a range of 8759.20 and 8800.65. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.09%, Eicher Motors up by 1.88%,, GAIL India up by 1.84%, Mahindra & Mahindra up by 1.83% and Bharti Infratel up by 1.63%. On the flip side, ICICI Bank down by 1.40%, Aurobindo Pharma down by 1.25%, BHEL down by 0.76%, Hindalco down by 0.76% and Hindustan Unilever down by 0.76% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 0.29%, Shanghai Composite gained 0.46%, KOSPI Index increased 0.75%, Jakarta Composite jumped 0.78%, Taiwan Weighted surged 0.83%, Hang Seng added 0.13% and Nikkei 225 was up by 1.64%.