Benchmarks continue to trade in green in noon session

Indian bourses continued to trade in green in noon session on buying by funds and retail investors in select stocks. Sentiments got some support with CBEC Chairman Najib Shah’s statement that the GST Council may in future decide to reduce the tax slabs under the Goods and Services Tax (GST) regime after analyzing the revenue garnered and the compensation payouts to states. He said that any change in tax slab is possible after assessing the revenues and the effect of exemptions and deductions given in the new tax regime and analyzing it with the expenditure. Some support also came with the reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 698.86 crore on December 08, 2016. However, gains remained capped as trading sentiments around the region came under pressure after the ECB said it would reduce its monthly asset purchases to EUR 60 billion from April, from the current level of EUR 80 billion. Meanwhile, Oil marketing companies slipped after the government announced 0.75% discount on digital purchases of petrol and diesel from state owned outlets, while Auto stocks declined after the report that the total vehicle sales across categories has seen a decline of 5.48% at 15.63 lakh units during the month of November 2016.

On the global front, Asian stock markets were trading mostly in red on Friday, as investors turned jittery after the European Central Bank (ECB) trimmed the size of its asset purchase programme and also extended till end 2017. South Korea's benchmark slipped as lawmakers prepared to vote on whether or not to impeach President Park Geun-hye. Though, Japanese stocks rose to their highest level in a year, supported by Wall Street gains and solid buying of exporters on the back of a weaker yen. US stock indices climbed again on Thursday and set fresh record highs as Wall Street.

Back home, stocks from FMCG, IT and Consumer Durables counters were supporting the markets’ uptrend, while those from Metal, Auto and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Puravankara Projects surged after the company reported a 56% year on year (YoY) increase in consolidated net profit at Rs 42.12 crore for the quarter ending September 2016, mainly due to lower material & contract cost and land cost. On the other hand, NLC India declined after the company reported 13.62% fall in its net profit at Rs 300.42 crore for the quarter ended September 30, 2016 as compared to Rs 347.79 crore for the same quarter in the previous year. 

The market breadth remained optimistic as there were 1385 shares on the gaining side against 872 shares on the losing side, while 136 shares remained unchanged.

The BSE Sensex is currently trading at 26757.86, up by 63.58 points or 0.24% after trading in a range of 26707.81 and 26803.26. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.59%.

The top gaining sectoral indices on the BSE were FMCG up by 0.97%, IT up by 0.93%, TECK up by 0.73%, Consumer Durables up by 0.62% and Realty up by 0.61%, while Metal down by 0.44%, Auto down by 0.31% and Capital Goods down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.53%, ONGC up by 1.44%, Infosys up by 1.29%, SBI up by 1.29% and Tata Motors up by 1.05%. On the flip side, Bajaj Auto down by 1.64%, Coal India down by 1.35%, HDFC down by 1.25%, Hero MotoCorp down by 0.99% and Mahindra & Mahindra down by 0.68% were the top losers.

Meanwhile, amid industry’s demand of lowering of proposed GST rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent post the demonetization, Central Board of Excise and Customs (CBEC) Chairman Najib Shah has said that in future the GST Council may reduce the tax slabs under the new tax regime. He noted that reduction in tax slab is possible after assessing the revenues, the effect of exemptions and deductions given in the GST regime, and analysing it with the expenditure.
The CBEC chairman said that the officers committee has already started work on which goods is to be placed in which tax bracket and the final call would be taken by the GST Body. He said that the central government has committed to compensating the states for five years. Now it is a huge burden which the central government has cast upon itself.

Shah further said that the Council has to take into consideration the range of products under new tax regime and the political compulsion of every state while taxing them. He also said that the underlying theme is GST will increase revenues and the need for compensation perhaps will be lesser.

He added that at the last meeting, the Council agreed on a four-slab structure of 5, 12, 18 and 28 per cent along with a cess on luxury and ‘sin’ goods such as tobacco. He said that the Centre and the states have collected Rs 8 lakh crore from indirect taxes, minus customs duty, and the same level of revenue had to be collected in the GST regime.

The CNX Nifty is currently trading at 8258.90, up by 12.05 points or 0.15% after trading in a range of 8241.95 and 8271.90. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were ITC up by 2.53%, Zee Entertainment up by 1.99%, Tech Mahindra up by 1.70%, Bank of Baroda up by 1.58% and SBI up by 1.39%. On the flip side, Bharti Infratel down by 2.58%, Bajaj Auto down by 1.82%, HDFC down by 1.46%, Coal India down by 1.46% and Bosch down by 1.40% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 0.44%, Jakarta Composite slipped 0.27%, KOSPI Index declined 0.31% and FTSE Bursa Malaysia KLCI was down by 0.26%. On the flip side, Taiwan Weighted rose 0.18%, Shanghai Composite increased 0.75% and Nikkei 225 was up by 1.19%.