Benchmarks trade firm; Nifty surpasses 8400 mark

Indian equity benchmarks continued their firm trade in late morning session on account of buying in front line blue chip counters. The rupee was trading higher against dollar on account of selling of American currency by bank and exporters. Trump’s widely-awaited press conference on Wednesday provided little clarity on future economic policies, disappointing investors who expected him to shed some light on the policies he intends to incorporate to boost US economy. Traders were getting support with Finance Minister Arun Jaitley’s statement that the implementation of the Goods and Services Tax (GST), coupled with a digitized economy ushered in by demonetization, will make India’s economy look much cleaner and bigger. Jaitley reiterated that the Centre is still aiming to roll out the GST regime from April 1 if all pending issues are sorted out. Separately, Niti Aayog sought up to three times increase in social sector spending, partially by cutting down on the mega subsidies that the government doles out every year as well as diverting the extra revenue earned over the next three years to sectors such as health and education. The 12th Five-Year Plan appraisal document, prepared by NITI Aayog has made a strong case for clear tax policies and focus on manufacturing, even as it exuded confidence that growth in 2016-17, the final year of the Plan would be 7 percent to 7.75 percent. The appraisal document for the 12th Five Year Plan (2012-17), prepared by NITI Aayog without taking into account impact of demonetization, also talked about 8 percent growth under the optimistic scenario, but it may not be possible now.

Traders were seen piling position in Power, IT and Capital Goods stocks, while selling was witnessed in Metal, FMCG and Realty sector stocks. Select pharma stocks were trading under pressure tracking global fall in drug firms following criticism by Donald Trump. He said pharmaceutical companies are ‘getting away with murder’ in what they charge the government for medicines. In scrip specific development, APL Apollo Tubes was trading in green on receiving patents from the Indian Patent Office for two new product designs.

On the global front, Asian shares were trading mostly in green, following the positive close of US stocks overnight in a choppy session influenced by President-elect Donald Trump’s first press conference. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,400 and 27,200 levels respectively. The market breadth on BSE was negative in the ratio of 1052:1152, while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 27239.03, up by 98.62 points or 0.36% after trading in a range of 27166.69 and 27278.93. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.01%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Power up by 2.09%, IT up by 1.20%, Capital Goods up by 0.98%, PSU up by 0.98% and TECK up by 0.94%, while Metal down by 0.83%, FMCG down by 0.33%, Realty down by 0.18% and Consumer Durables down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 4.53%, NTPC up by 2.71%, Infosys up by 2.17%, Larsen & Toubro up by 1.77% and ONGC up by 1.70%.

On the flip side, Coal India down by 1.39%, Dr. Reddy’s Lab down by 1.19%, Sun Pharma down by 1.14%, Adani Ports & Special Economic Zone down by 1.12% and Hindustan Unilever down by 0.70% 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 8404.15, up by 23.50 points or 0.28% after trading in a range of 8382.30 and 8417.20. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 4.74%, NTPC up by 2.71%, Infosys up by 2.23%, Tata Power up by 2.21% and Tech Mahindra up by 1.96%.

On the flip side, Idea Cellular down by 2.08%, Coal India down by 1.56%, Aurobindo Pharma down by 1.50%, IndusInd Bank down by 1.44% and BHEL down by 1.20% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.52 points or 0.21% to 1,678.73, KOSPI Index increased 3.64 points or 0.18% to 2,078.81, Shanghai Composite increased 3.77 points or 0.12% to 3,140.52, Jakarta Composite increased 11.71 points or 0.22% to 5,312.95 and Taiwan Weighted increased 69.03 points or 0.74% to 9,414.77.

On the other hand, Nikkei 225 decreased 188.43 points or 0.97% to 19,176.24 and Hang Seng decreased 90.05 points or 0.39% to 22,845.30.