Benchmarks make gap-up opening; Sensex regains 26,800 mark

Supported by firm global cues, Indian equity benchmarks have made a gap-up opening and are trading with traction in early deals on Thursday, with frontline gauges recapturing their crucial 26,800 (Sensex) and 8,250 (Nifty) levels. Traders took some encouragement with report that Foreign Direct Investment (FDI) in India increased by 27% at $27.82 billion during the April-October period of the current fiscal as against $21.87 billion in the same period last fiscal. The FDI numbers indicates that the government has been able to create a suitable climate in which the foreign investors feel confident that interest is protected.  Appreciation in Indian currency too aided sentiments with Rupee appreciating 16 paise to 67.89 against the dollar on increased selling of dollar by exporters and banks.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time buoyed by further gains on Wall Street and an overnight bounce in oil prices that bolstered energy shares. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. The market breadth remained in favour of advances, as there were 1,557 shares on the gaining side against 357 shares on the losing side while 67 shares remain unchanged.

The BSE Sensex is currently trading at 26815.23, up by 182.10 points or 0.68% after trading in a range of 26738.42 and 26822.75. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.79%, while Small cap index was up by 0.92%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.36%, PSU up by 1.14%, Auto up by 1.08%, Metal up by 1.04% and Power was up by 0.96%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Motors up by 2.87%, Adani Ports & SEZ up by 2.48%, Wipro up by 1.67%, ONGC up by 1.57% and Power Grid was up by 1.24%. On the flip side, Mahindra & Mahindra down by 0.87% and HDFC down by 0.38% were the only losers.

Meanwhile, the eighth Goods and Services Tax (GST) Council meeting ended without breaking deadlock over the issue of dual control of assesses under the new indirect tax regime, an issue that has been holding up supporting bills essential for the GST rollout from April 1 next year. The next meeting of the GST Council will take place on January 16, wherein the issue of sharing of administrative powers will be discussed. Union Finance Minister Arun Jaitley said that GST’s primary drafts for Central Goods and Service Tax (CGST) and State Goods and Service Tax (SGST) have been approved. However, no consensus was reached on the issues of dual control and cross empowerment issues still remain to be resolved. He further said that it was not possible to meet April 1, 2017, roll out deadline.

Kerala Finance Minister Thomas Isaac said that the other remaining issues before the GST Council include ways to fund the compensation to states for GST rollout and states participation in Integrated GST (IGST). He said 'working overtime, it should be possible to meet the deadline of September. I am not very optimistic about rolling GST out in June/July. Because it is a new tax and lot of complexity involved, it would be better to move in after full preparation. So, to my understanding GST will be implemented from September'.

Isaac also said that some states wanted the GST revenue from the highest tax bracket to be shared in 60:40 ratio with the Centre, instead of the present 50:50 sharing. As regards the treatment of IGST, Isaac said one interpretation of the Constitutional amendment is that IGST tax is levied, collected and assigned by the Centre. During the meeting states said that IGST cannot be implemented without states' participation and dual control. He said certain states continue to demand sole control over assessees with turnover of below Rs 1.5 crore. The total share in revenue of assessees below Rs 1.5 crore turnover is 15 per cent.

The CNX Nifty is currently trading at 8250.95, up by 60.45 points or 0.74% after trading in a range of 8223.70 and 8251.85. There were 44 stocks advancing against 6 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Motors up by 2.90%, Adani Ports & SEZ up by 2.24%, Tata Motors - DVR up by 2.18%, Bosch up by 2.06% and Bank of Baroda was up by 2.03%. On the flip side, Bharti Infratel down by 1.14%, Mahindra & Mahindra down by 0.79%, HDFC down by 0.37%, Idea Cellular down by 0.27% and Grasim Industries was down by 0.18% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 3.57 points or 0.11% to 3,162.37, FTSE Bursa Malaysia KLCI gained 6.67 points or 0.4% to 1,654.14, Jakarta Composite rose 21.41 points or 0.4% to 5,322.59, Taiwan Weighted added 64.36 points or 0.69% to 9,351.32 and Hang Seng was up by 288.29 points or 1.3% to 22,422.76.

On the flip side, Nikkei 225 decreased 70.99 points or 0.36% to 19,523.17 and KOSPI Index was down by 2.72 points or 0.13% to 2,042.92.