Benchmarks trade slightly in green in early deals

Buoyed by firm global cues, Indian equity benchmarks have made a positive start and are trading slightly in green in early deals on Thursday. Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the implementation of the Goods and Services Tax (GST), coupled with a digitised economy ushered in by demonetisation, will make India’s economy “look much cleaner and bigger”. However, gains remained capped as the RBI governor Urjit Patel ahead of the budget has warned against squandering macroeconomic stability gains through giveaways and said that high government debt was hurting India's ratings.

Global cues remained supportive with Asian markets trading mostly in green at this point of time, but gains remained capped after Donald Trump’s first press conference since his election victory gave scant detail on policy. The US markets ended higher despite a volatile trade in last session, reacting to President-elect Donald Trump's comments during his first press conference in several months.

Back home, traders took some encouragement with NITI Aayog estimating a growth rate of 8% for 2016-17 as per a ‘cautiously optimistic’ prognosis it has laid out in the appraisal document for the Twelfth Five-Year Plan, flagging the lack of reforms in land acquisition, labour and simplification of administrative procedures as impediments to growth. The review, however, does not take into account the impact of demonetisation.

The BSE Sensex is currently trading at 27200.66, up by 60.25 points or 0.22% after trading in a range of 27168.74 and 27278.93. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.17%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were IT up by 1.31%, TECK up by 1.08%, Power up by 0.84%, Oil & Gas up by 0.52% and PSU was up by 0.47%, while Metal down by 1.00%, FMCG down by 0.42%, Realty down by 0.21% and Auto was down by 0.09% were the few losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.79%, Infosys up by 2.19%, Axis Bank up by 0.96%, Larsen & Toubro up by 0.92% and NTPC was up by 0.91%. On the flip side, Dr. Reddys Lab down by 1.96%, Sun Pharma down by 1.74%, Lupin down by 1.20%, Adani Ports &Special Economic Zone down by 1.15% and Coal India was down by 1.09% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that the Centre is still aiming to implement the Goods and Services Tax (GST) regime from April 1, 2017. He added that most of the issues have been sorted out. He also hoped that some critical issues of dual control and cross-empowerment in the GST will get resolved in next few weeks. The all-powerful GST Council, which has been deadlocked in the past few meetings, will meet on January 16 to discuss the issue of jurisdiction over assessees as well as taxation of trade in territorial waters.

Jaitley has said that since the constitutional amendment has been passed, it is mandatory to implement the GST, which include most of central and states taxes like excise, service tax and VAT before September 16, because some of the existing levies would expire after the specified date. But the rollout is struck because of differences between the Centre and states over control and administration of the tax as also on how the states that face revenue shortfall because of the GST rollout would need to be compensated.

Minister further said that once implemented, GST combined with more digitised economy resulting from currency demonetisation and a more efficient tax system will make India look much better and make India’s economy look much cleaner, much bigger. GST, or a national sales tax, will replace a jumble of levies to create one of the world's biggest single market. A single tax will make it easier to do business in the world's seventh-largest economy as also help combat evasion, boost revenue for the government.

The CNX Nifty is currently trading at 8386.80, up by 6.15 points or 0.07% after trading in a range of 8382.80 and 8417.20. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.66%, Infosys up by 2.14%, Tech Mahindra up by 2.08%, HCL Tech up by 1.12% and Yes Bank up by 1.04%. On the flip side, Aurobindo Pharma down by 2.45%, Dr. Reddys Lab down by 1.96%, Idea Cellular down by 1.88%, Sun Pharma down by 1.83% and Lupin down by 1.61% were the top losers.

Asian markets were trading mostly in green; KOSPI Index rose 0.43 points or 0.02% to 2,075.60, FTSE Bursa Malaysia KLCI gained 3.56 points or 0.21% to 1,678.77, Shanghai Composite increased 6.31 points or 0.2% to 3,143.06, Jakarta Composite added 14.65 points or 0.28% to 5,315.89 and Taiwan Weighted was up by 58.96 points or 0.63% to 9,404.70.

On the flip side, Nikkei 225 decreased 286.4 points or 1.48% to 19,078.27 and Hang Seng was down by 62.95 points or 0.27% to 22,872.40.