Key benchmark indices maintain the gains in noon trade

Key benchmark indices continued to trade in positive territory in the noon session following positive cues from the global markets, as strong U.S. earnings and rally in oil prices helped spur global risk appetite. Sentiments got some support with Prime Minister Narendra Modi’s statement that India is capable of playing the significant role in providing strength to world economy that is facing slowdown. He said that at a time when world economy was facing slowdown like the one witnessed in 2008, India's economy was strong and was giving strength to world economy. However, some gains were capped as the three-day meeting of the GST Council, chaired by Finance Minister Arun Jaitley, ended without finalising the rates structure after most States objected to a proposal to levy an additional cess on demerit goods.  The GST Council will meet again on November 3-4 to take decision on the Goods and Services Tax rates, which will have four slabs. Depreciation of the rupee value against dollar also weighed on the sentiments. Traders were seen piling up positions in Banking, Metal, Realty, Consumer Durables and PSU stocks, while selling was witnessed in Oil & Gas, FMCG and IT sector stocks. In scrip specific development, Suzlon Energy rose 3 percent after announcing a joint venture with Shanghai-based Unisun Energy Group for developing solar projects in Telangana.

On the global front, Asian markets were trading mostly in green, following a positive lead from Wall Street, with energy firms tracking a surge in oil prices as dealers welcomed a surprise drop in US stockpiles.

The BSE Sensex is currently trading at 28118.73, up by 134.36 points or 0.48% after trading in a range of 28031.57 and 28212.50. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 0.23%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Bankex up by 1.39%, Metal up by 1.33%, Realty up by 1.19%, Consumer Durables up by 1.05% and PSU up by 0.47%, while Oil & Gas down by 0.28%, FMCG down by 0.11% and IT down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.96%, Adani Ports & SEZ up by 3.04%, SBI up by 1.98%, Tata Steel up by 1.26% and HDFC up by 0.96%. On the flip side, Lupin down by 0.50%, ITC down by 0.42%, Hindustan Unilever down by 0.41%, Sun Pharma Inds. down by 0.29% and Wipro down by 0.24% were the top losers.

Meanwhile, the three-day meeting of the GST Council, chaired by Finance Minister Arun Jaitley, ended without finalising the rates structure after most States objected to a proposal to levy an additional cess over and above the Goods and Services Tax on ultra luxury and demerit goods such as big cars, aerated beverages and tobacco products.

The Centre had proposed the cess as a means to finance the compensation it will have to pay States, but number of States objected to the use of GST collections to finance GST and demanded that the Centre fund the compensations out of the Consolidated Fund of India instead of tax revenue mopped up from the GST system. Finance Minister Arun Jaitley later said that the council will meet next on November 3-4 to decide on the GST rates structure, adding that it can be frozen only after deciding whether compensation to States is to be funded out of the rate structure itself or from some special cess or some third source.

The Centre and states, however, did manage to reach a broad agreement on the formula for compensation to loss-incurring states and a cess over the peak rate to fund the compensation. The details of these would be worked out at the next meeting, before tax rates can be fixed.  An informal consensus was also reached at the end of the two-day meeting of the GST Council on a four-slab tax structure of 6, 12, 18 and 26 per cent. The lower tariff will be for essential items and the highest bracket for luxury and sin goods like tobacco, cigarettes and alcohol, but a decision was put off to the next meeting.  The collections from the proposed cess on luxury or demerit supplies over and above the higher tax slab are estimated to be around Rs 50,000 crore, out of which around Rs 26,000 crore will be collected through clean environment cess.

On tax structure, Jaitley said that they cannot under-tax or over-tax to keep rate slabs minimum. The attempt was to fit zero rated items while levying a 6 per cent tax on items that are currently charged 3-9 per cent tax. He further said that they will meet again on November 3-4 to decide on the tax rates.

The CNX Nifty is currently trading at 8696.20, up by 37.10 points or 0.43% after trading in a range of 8685.05 and 8727.00. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 4.06%, Idea Cellular up by 3.67%, Adani Ports & SEZ up by 2.96%, Bharti Infratel up by 2.54% and Hindalco up by 2.48%. On the flip side, HCL Tech. down by 1.76%, Ultratech Cement down by 0.66%, Tata Motors - DVR down by 0.61%, Lupin down by 0.50% and ITC down by 0.46% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.57 points or 0.09% to 1,669.84, Jakarta Composite rose 4.61 points or 0.09% to 5,413.90, Taiwan Weighted increased 33.25 points or 0.36% to 9,317.24, Hang Seng was up by 117.94 points or 0.51% to 23,422.91, Nikkei 225 increased 236.59 points or 1.39% to 17,235.50. On the flip side, Shanghai Composite decreased 0.56 points or 0.02% to 3,084.16 and KOSPI Index was down by 0.34 points or 0.02% to 2,040.60.