Markets turn flat in late morning session

Paring all of their initial gains, Indian benchmarks turned flat in late morning session, as traders opted to book profit at higher levels. Traders remained cautious with report stating that GST benefits are likely to accrue over time rather than immediately, though in the long run the indirect tax regime will boost growth, lower costs and strengthen tax revenues. It added that it expects over time, as the GST council widens the tax net, minimises the tax slabs and lower the standard tax rates, the benefits will be substantial. However, appreciation in Rupee provided some strength to the markets. The rupee edged higher by 5 paise to 66.69 against the US dollar in early trade today on selling of the American currency by exporters and banks amid fresh foreign fund inflows.

Positive cues from Asian counters too supported the sentiments. All the regional peers were trading in green at this point of time with opinion polls showing Hillary Clinton ahead of Donald Trump as Americans prepare to cast their ballots in the US presidential election. Back home, shares of India’s biggest private sector lender ICICI Bank jumped around one and a half percent after the private sector lender reported better-than-expected net profit in the September quarter though its bad loans saw an uptick. However, Shares of Varun Beverages saw a tepid listing on bourses. PepsiCo India’s franchise bottling partner debuted at Rs 430 per share, down over 3 percent from its issue price of Rs 445.

The BSE Sensex is currently trading at 27453.46, down by 5.53 points or 0.02% after trading in a range of 27437.88 and 27600.71. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.21%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Auto up by 0.91%, Industrials up by 0.89%, Metal up by 0.57%, Oil & Gas up by 0.21% and Power was up by 0.10%, while Healthcare down by 0.89%, FMCG down by 0.79%, Realty down by 0.38%, Consumer Durables down by 0.19% and Capital Goods was down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.67%, Bajaj Auto up by 1.13%, ICICI Bank up by 1.04%, Dr. Reddys Lab up by 1.01% and Asian Paints up by 0.71%. On the flip side, Sun Pharma down by 2.24%, ITC down by 1.46%, Maruti Suzuki down by 1.39%, Cipla down by 1.15% and SBI down by 0.99% were the top losers.

Meanwhile, with concern for the tourism sector, the Hotel and Restaurant Association of Western India (HRAWI) has said that the government's four-tier structure of Goods and Services Tax (GST), in which the service sector will be taxed at 18 per cent, will cause the tourism sector a major problem.

HRAWI President Dilip Datwani said that the it was estimated that the lower GST rate of 5 per cent will contribute to a decrease in their Current Account Deficit, increase in the GDP, doubling up of both foreign and domestic travel and also doubling up of tourism induced employment, across each state and nationally. He added that India's tourism competitors in South East Asia (excluding Japan and China) earn among themselves over $150 billion in foreign exchange and attract almost 100 million tourists annually. Further, as per the estimates, a GST rate of 5 per cent will more than double both foreign travel coming to India to 20 million tourists and domestic travel within India to 2.5 billion.

On other hand, HRAWI former President Kamlesh Barot said that they have accepted the 5 per cent tax slab on food, which is a positive outcome of subsumed taxes for hotels and restaurants. However, the 18 per cent levy on services or room revenue in our case, compared to India’s neighboring countries which charge a Tourism tax between 4 to 7 per cent, rules out fair competition. This will have a negative impact, as a foreign tourist planning a trip across Asia may entirely skip India or spend fewer days in India on account of these perceived high room rates. Recently, the GST council has finalized the GST four tier rate structure of 5, 12, 18 and 28 per cent that aims to lower tax incidence on most goods and keep out essential items. In this the service sector will be taxed at 18 per cent.

The CNX Nifty is currently trading at 8499.65, up by 2.60 points or 0.03% after trading in a range of 8489.30 and 8543.15. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 4.79%, Tata Motors - DVR up by 4.41%, BHEL up by 2.66%, Hindalco up by 1.85% and ICICI Bank up by 1.42%. On the flip side, Sun Pharma down by 1.89%, Maruti Suzuki down by 1.37%, ITC down by 1.36%, Aurobindo Pharma down by 1.31% and HCL Tech. down by 1.24% were the top losers.

All the Asian markets were trading in green; KOSPI Index increased 5.9 points or 0.3% to 2,003.48, FTSE Bursa Malaysia KLCI gained 6.48 points or 0.39% to 1,657.07, Nikkei 225 rose 17.47 points or 0.1% to 17,194.68, Shanghai Composite jumped 22.97 points or 0.73% to 3,156.30, Taiwan Weighted advanced 24.56 points or 0.27% to 9,214.40, Jakarta Composite surged 53.95 points or 1% to 5,440.16 and Hang Seng was up by 62.96 points or 0.28% to 22,864.36.