Benchmarks continue firm trade; Nifty holds 9050 mark

Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters taking cues from regional counterparts. A terrorist attack in the UK has not affected the stocks for the moment. The rupee came under a renewed selling pressure and retreated from a nearly 17-month high against the American unit on fresh dollar demand from importers. Overall forex market sentiment turned sour after fresh bouts of global jitters took the centre-stage in the midst of mounting uncertainty over possible delay of Donald Trump’s proposed economic growth agenda. Back home, traders 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 is hopeful of implementing from July 1 the Goods and Service Tax (GST) to help check tax evasion. Traders were seen piling position in Oil & Gas, Capital Goods and Realty sector stocks. There is some buzz in Realty sector stocks as the government announced a credit-linked interest subsidy (CLSS) scheme for home loans, leading to savings of more than Rs 2 lakh, or up to Rs 2,000 on EMIs. In scrip specific development, Delta Corp was trading in green on planning to raise up to Rs 750 crore through issue of equity shares or other securities through Qualified Institutional Placement (QIP). Fertilisers and Chemicals Travancore (FACT), Scooters India and Hindustan Fluorocarbons were trading in green after the government stepped up its strategic divestment drive, with premier think tank Niti Aayog recommending immediate stake sales in 12 central public sector enterprises (CPSEs). Separately, there is scrip specific action after the National Stock Exchange (NSE) on Wednesday introduced Futures and Options (F&O) contracts in 15 individual securities. These stocks will be available for trading from March 31, 2017. Reliance Defence, InterGlobe Aviation, PVR, among others will be included in the list. Among financials, Capital First, Muthoot Finance, Equitas Holdings, Ujjivan Financial Services, Max Financial Services and Indian Bank will be included in the list, while Dalmia Bharat, Infibeam Incorporation, Suzlon Energy, Piramal Enterprises, Escorts, and Shree Cements are the other stocks to be included.

On the global front, Asian shares were trading mostly in green, as investors awaited the fate of a key legislative plank of the Republican party-controlled congress and presidency to repeal and replace a healthcare law dubbed Obamacare. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,050 and 29,200 levels respectively. The market breadth on BSE was positive in the ratio of 1574:671, while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 29290.00, up by 122.32 points or 0.42% after trading in a range of 29198.08 and 29315.18. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84%, while Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.37%, Capital Goods up by 1.35%, Realty up by 1.19%, Energy up by 1.14% and Industrials up by 1.09%, while there were no losers.

The top gainers on the Sensex were GAIL India up by 1.99%, Larsen & Toubro up by 1.50%, Tata Motors up by 1.45%, NTPC up by 1.43% and Hero MotoCorp up by 1.21%.

On the flip side, ITC down by 0.41%, Hindustan Unilever down by 0.17%, Sun Pharma down by 0.14%, Dr. Reddy’s Lab down by 0.06% and HDFC Bank down by 0.06% were the top 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 9065.35, up by 34.90 points or 0.39% after trading in a range of 9048.60 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 1.94%, BPCL up by 1.93%, Tata Motors up by 1.60%, Larsen & Toubro up by 1.40% and NTPC up by 1.37%.

On the flip side, Eicher Motors down by 0.91%, ITC down by 0.46%, Bosch down by 0.38%, Ambuja Cement down by 0.36% and Hindalco down by 0.28% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.84 points or 0.16% to 1,751.14, Shanghai Composite increased 4.89 points or 0.15% to 3,250.11, KOSPI Index increased 6.37 points or 0.29% to 2,174.67, Nikkei 225 increased 21.45 points or 0.11% to 19,062.83, Hang Seng increased 25.94 points or 0.11% to 24,346.35 and Jakarta Composite increased 30.13 points or 0.54% to 5,564.22.

On the other hand, Taiwan Weighted decreased 8.21 points or 0.08% to 9,914.45.