Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Thursday, as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing amid firm cues from regional counterparts. Traders also took some encouragement with Finance Minister Arun Jaitley’s statement that India's GDP can grow by 7-8 percent if the global economy picks up. He also said the government was hopeful of implementing from July 1 the Goods and Service Tax (GST) to help check tax evasion. However, gains remained capped with reports that five people were killed and 40 others injured when a terrorist suspect mowed down pedestrians on a bridge and stabbed a police officer outside UK parliament complex.

On the global front, Asian markets rallied in early deals on Thursday. The Japanese market too has recovered following its biggest drop since Donald Trump’s election, as demand for haven assets ebbed and the yen halted a seven-day rally. The US markets continued their lackluster trade in the last session and made a mixed closing after a choppy trade.

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 favor of advances, as there were 1,424 shares on the gaining side against 535 shares on the losing side while 95 shares remain unchanged.

The BSE Sensex is currently trading at 29250.34, up by 82.66 points or 0.28% after trading in a range of 29198.08 and 29315.18. There were 27 stocks advancing against 2 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.62%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Realty up by 1.11%, Capital Goods up by 1.07%, Oil & Gas up by 0.97%, Industrials up by 0.80% and Energy up by 0.74%, while FMCG down by 0.05% was the sole losing index on BSE.

The top gainers on the Sensex were GAIL India up by 1.56%, Larsen & Toubro up by 1.11%, Hero MotoCorp up by 0.91%, Wipro up by 0.75% and NTPC was up by 0.75%. On the flip side, ITC down by 0.54% and Hindustan Unilever was down by 0.17% were the only losers.

Meanwhile, expressing hopes that a new nationwide goods and services tax (GST) will be rolled out from July 1, Union Finance Minister Arun Jaitley has said that it will create one of the world’s biggest single markets, make goods and services cheaper and tax evasion difficult. He also said that India's indirect taxation regime, which is currently the most complex in the world, will transform into a simplified one with the implementation of GST.

Finance Minister has said that the biggest taxation reform will increase the volume of taxation, there is no tax on tax and therefore makes goods, commodities and services little cheaper and far more convenient, and it will also act as a great check on tax evasion. He further said that India has ‘hugely’ a non-tax compliant society and the government banned higher denomination notes to curb the tendency of people to deal in cash that lead to tax evasion as well as terror financing. He added that the tax department is trying to make the I-T (income tax) backbone so strong so that evasion becomes difficult and hence only limited number of cases are taken up for scrutiny.

As regards growth, Jaitley said that India would continue to remain amongst the fastest growing economies of the world. He also said that achieving a growth rate of 7-8 percent was plausible, and if economies picked up globally, then the country’s growth rate could go up further. But challenges remain in volatile global oil prices, reviving private sector investment and health of state-owned banks. Despite being one political entity, India currently is not a single economic entity as there are multiple layers of taxation that make goods costlier. GST - first proposed in 2006 - will replace at last 17 state and central levies.

The CNX Nifty is currently trading at 9052.90, up by 22.45 points or 0.25% after trading in a range of 9048.70 and 9076.35. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.45%, Larsen & Toubro up by 1.17%, Wipro up by 0.99%, Tata Motors - DVR up by 0.92% and Hero MotoCorp was up by 0.85%. On the flip side, ITC down by 0.59%, Bosch down by 0.53%, BHEL down by 0.51%, Eicher Motors down by 0.49% and Bank of Baroda was down by 0.46% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 3.25 points or 0.19% to 1,751.55, KOSPI Index increased 4.95 points or 0.23% to 2,173.25, Taiwan Weighted gained 8.4 points or 0.08% to 9,931.06, Shanghai Composite advanced 9.91 points or 0.31% to 3,255.13, Jakarta Composite jumped 26.42 points or 0.48% to 5,560.51, Nikkei 225 added 30.37 points or 0.16% to 19,071.75 and Hang Seng was up by 86.58 points or 0.36% to 24,406.99.