Benchmarks continue to trade in green in noon session

Indian benchmark indices continue to trade in fine fettle in noon session on emergence of buying by funds and retail investors. Investors’ sentiments remained optimistic, triggered by the report indicating India’s Services sector activity gathered pace in October, driven by sharper increase in new business orders amid strong demand and improved market conditions. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector companies on a monthly basis, stood at 54.5 in October as against 52.0 in September. However, the upside is capped due to selling among oil shares and weak global cues. Investors also remained cautious with the report that S&P Global Ratings has ruled out an upgrade for India over the next two years even as it affirmed the stable outlook on the country’s ‘BBB-’ long-term and ‘A-3’ short-term sovereign credit ratings. The global rating agency has stuck to its rating, saying it would need to see more efforts to lower the country’s net general government debt level to below 60% of gross domestic product. The ratings agency expressed concerns that government could delay subsidy cuts, while noting the country’s banking sector would likely need capital infusions of about $45 billion by 2019, or 2% of the country’s GDP, to meet global Basel III capital norms.

On the global front, Asian markets were trading mostly lower on Thursday, spooked by concerns over the outcome of next week's U.S. presidential election. Tensions were aggravated by the reports that some agents at the FBI had wanted to press ahead with an investigation of the Clinton Foundation, but senior officials at the agency and at the Justice Department did not think much of the evidence. Markets favor a Clinton victory as she is seen maintaining the status quo, while Trump’s policies are less clear and the uncertainty rocks markets.

Back home, stocks from Metal, Capital Goods and Auto counters were supporting the markets’ uptrend, while those from Oil & Gas, PSU and IT counters were adding to the underlying cautious undertone. In scrip specific development, Strides Shasun has gained after the company announced that Mylan agreed to settle regulatory and general claims on Agila transaction. Furthermore, Shree Pushkar Chemicals & Fertilisers has rallied to its record high of Rs 196, after the company started commercial production of Sulphate of Potash (SOP) around end September 2016.

The market breadth remained optimistic as there were 1663 shares on the gaining side against 955 shares on the losing side, while 121 shares remained unchanged.

The BSE Sensex is currently trading at 27568.18, up by 40.96 points or 0.15% after trading in a range of 27446.31 and 27600.74. 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 0.18%, while Small cap index up by 0.46%.

The top gaining sectoral indices on the BSE were Metal up by 1.20%, Capital Goods up by 0.83%, Auto up by 0.48%, FMCG up by 0.41% and Consumer Durables up by 0.38%, while Oil & Gas down by 0.64%, PSU down by 0.31%, IT down by 0.18% and Power down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.86%, Larsen & Toubro up by 1.13%, TCS up by 0.70%, ITC up by 0.67% and Maruti Suzuki up by 0.65%. On the flip side, ONGC down by 2.45%, Asian Paints down by 1.04%, NTPC down by 0.86%, Sun Pharma down by 0.69% and Infosys down by 0.68% were the top losers.

Meanwhile, Goods and Service Tax (GST) council which has to decide on tax rate including the levy of cess and sort out the vexed issue of jurisdiction over assesses, is all set to meet on November 3. The crucial 2-day meeting of the GST Council will be chaired by the Union Finance Minister Arun Jaitley.  

Another important issue to be discussed at the meeting is the dual control of service tax assesses. Further, the meeting will have to sort out the issues regarding tax rate to enable Parliament to approve the Central GST (CGST) and Integrated GST (IGST) legislations in the winter session beginning November 16 and pave way for roll out of the new tax regime from April next year.

At the meeting, the Central government is likely to press its proposal for 4-tier tax structure of 8, 12, 18 and 26 per cent, which will mostly apply to FMCG and consumer durables. Under this structure, the items which are currently taxed between 3-9 per cent will fall in the 6 per cent bracket and those in 9-15 per cent range will come under 12 per cent rate. Moreover, the products which are currently taxed between 15-21 per cent will attract 18 per cent levy, while those above 21 per cent will be taxed at the peak rate of 26 per cent. The Centre has also planned to levy additional cess on demerit goods like tobacco, aerated drinks and polluting items to create Rs 50,000 crore fund to compensate the states for revenue loss.

The CNX Nifty is currently trading at 8530.75, up by 16.75 points or 0.20% after trading in a range of 8489.60 and 8537.65. There were 33 stocks advancing against 17 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Hindalco up by 5.21%, Bharti Infratel up by 3.03%, Idea Cellular up by 2.02%, Hero MotoCorp up by 1.76% and BHEL up by 1.72%. On the flip side, ONGC down by 2.49%, BPCL down by 1.33%, Asian Paints down by 1.08%, NTPC down by 1.05% and Grasim Industries down by 0.77% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 0.79%, Hang Seng slipped 0.3%, Jakarta Composite shed 0.38% and FTSE Bursa Malaysia KLCI was down by 0.28%. On the flip side, KOSPI Index increased 0.42% and Shanghai Composite increased 1.11%.