Benchmarks continue firm trade in late afternoon session

Indian equity markets continued their firm trade in the late afternoon session on the back of buying in frontline blue chip counters amid firm cues from global counterparts. Sentiment remained upbeat with the private report stating that corporate earnings growth in India is expected to recover this financial year and outpace its regional peers, but is likely to trail real economic growth in the near-term. Some support also came 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. On the sectoral front, metal stocks gained traction with the report that the government is working on a new steel policy in a bid to steer the over $100 billion industry out of the rut and ensure that the growth is evenly spread across all the related sectors. In scrip specific development, Yes Bank gained over a percent after the bank reported net profit of Rs 801.54 crore, up 31.31 crore, against Rs 610.41 crore in the corresponding quarter a year ago.

On the global front, European stocks were trading mostly in green on Thursday, as strong U.S. earnings and rallying oil prices helped improve investors' appetite for risk.

The BSE Sensex is currently trading at 28120.47, up by 136.10 points or 0.49% after trading in a range of 28031.57 and 28212.50. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Metal up by 1.47%, Bankex up by 1.32%, Realty up by 1.11%, Consumer Durables up by 0.97%, Capital Goods up by 0.45%, while Oil & Gas down by 0.28%, IT down by 0.16%, FMCG down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 4.32%, Adani Ports &Special up by 2.91%, SBI up by 1.77%, HDFC up by 1.18% and Tata Steel up by 0.99%. On the flip side, HDFC Bank down by 0.46%, Sun Pharma down by 0.46%, ITC down by 0.40%, Infosys down by 0.39% and Lupin down by 0.35% 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 8695.35, up by 36.25 points or 0.42% after trading in a range of 8678.30 and 8727.00. There were 31 stocks advancing against 19 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were ICICI Bank up by 4.30%, Idea Cellular up by 3.08%, Adani Ports &Special up by 2.93%, Hindalco up by 2.88% and Bharti Infratel up by 2.29%. On the flip side, HCL Tech. down by 1.85%, BPCL down by 0.85%, Ultratech Cement down by 0.66%, HDFC Bank down by 0.48% and Sun Pharma down by 0.46% were the top losers.

Asian market were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.08 points or 0.12% to 1,670.35, Taiwan Weighted rose 33.25 points or 0.36% to 9,317.24, Hang Seng was up by 69.43 points or 0.3% to 23,374.40 and Nikkei 225 surged 236.59 points or 1.39% to 17,235.50. On the other hand, Jakarta Composite decreased 7.2 points or 0.13% to 5,402.09, KOSPI Index dropped 0.34 points or 0.02% to 2,040.60 and Shanghai Composite was down by 0.26 points or 0.01% to 3,084.46.

European markets were trading mostly in green; France’s CAC increased 2.45 points or 0.05% to 4,522.75 and Germany’s DAX was up by 18.3 points or 0.17% to 10,663.98. On the flip side, UK’s FTSE 100 decreased 10.32 points or 0.15% to 7,011.60.