Benchmarks continue firm trade; Nifty above 9100 mark

Indian equity benchmarks continued their firm trade hovering near the highest point of the day in late morning session on account of buying in frontline blue chip counters amid a firming Asian trend on renewed optimism for tax reforms in the US. Traders took some encouragement with the government working under a self-imposed July 1 deadline for the Goods and Services Tax (GST) roll-out, tabling four Bills related to the proposed comprehensive indirect tax in Parliament for passage, among other things, the legislation provides for a peak GST rate of 40% and setting up of an authority to protect consumers from profiteering by businesses. SBI Research report highlighted that manufacturing improved in March after a three month decline, while various government measures are likely to push up activity in the infrastructure sector going forward. The yearly SBI Composite Index, one of leading indicators for manufacturing activity in the Indian economy, bounced back to above 50-mark level to 50.3 after 3-months of decline.

Buying also crept in on report that Indian consumers are the most optimistic lot in the Asia-Pacific region, which marked it mainly to upbeat sentiment over robust pace of economic growth and stable macroeconomic fundamentals. According to the MasterCard ‘Well-Being Index’ 2017, India is very optimistic with a score of 75 points -- the highest level of optimism in the second half of 2016 -- out of the 18 countries surveyed in the Asia Pacific. India is followed by the Philippines at 73 points, Indonesia and Vietnam 71.4 each and China 68.2. Traders were seen piling position in Telecom, Auto and TECK stocks, while selling was witnessed in Oil & Gas sector stocks. In scrip specific development, Dishman Pharmaceuticals & Chemicals is locked at upper circuit limit on the back of USFDA approval for its cancer drug Zejula Capsules. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. March 2017 series to next month i.e. April 2017 series. The near month March 2017 derivatives contracts will expire on Thursday i.e. March 30, 2017.

On the global front, Asian shares were trading mostly in green, as investors shrugged off the disappointment from the current US administration’s ability to push through legislation to repeal and replace the Obama-era health-care law. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,100 and 29,400 levels respectively. The market breadth on BSE was positive in the ratio of 1497:724, while 125 scrips remained unchanged.

The BSE Sensex is currently trading at 29427.55, up by 190.40 points or 0.65% after trading in a range of 29301.22 and 29442.18. 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 0.69%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were Telecom up by 1.09%, Auto up by 0.83%, TECK up by 0.82%, Basic Materials up by 0.80% and Industrials up by 0.79%, while Oil & Gas down by 0.06% was the sole loser on BSE.

The top gainers on the Sensex were Axis Bank up by 1.87%, Tata Motors up by 1.54%, Asian Paints up by 1.18%, ICICI Bank up by 1.13% and HDFC up by 1.03%.

On the flip side, ONGC down by 1.11%, GAIL India down by 0.71%, Coal India down by 0.46%, ITC down by 0.30% and Hero MotoCorp down by 0.26% were the top losers.

Meanwhile, in the compensation fund created under Goods and Services Tax (GST), the Centre will have a greater share of the residual amount at the end of the five-year period. The GST Bill now provides for equal sharing of the amount in the compensation fund against the earlier formula that favored states.

According to the Goods and Services Tax (Compensation to States) Bill, states will receive provisional compensation bi-monthly from the Centre for the loss of revenue after GST is rolled out. The GST compensation bill, in view of the provision of the draft, which was made public in November 2016, said that after the period of five years of compensation, any remaining balance in the compensation fund will be equally shared between the center and the states.

As per the earlier draft, any excess amount after the end of the five-year tenure in the GST Compensation Fund was to be divided between the Centre and states, under which 50 percent of the excess amount was to be devolved between the Centre and states according to a statute. The remaining 50 percent would have to be given to the states in the ratio of their total revenues from SGST in the last year of the transition period. The GST Council, comprising Union finance minister and state representatives, had decided to set up a compensation fund by levying cess on demerit and luxury goods.

The CNX Nifty is currently trading at 9109.40, up by 64.20 points or 0.71% after trading in a range of 9080.80 and 9109.75. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 2.09%, Tata Motors - DVR up by 2.03%, Axis Bank up by 1.87%, Bharti Infratel up by 1.81% and Tata Motors up by 1.70%.

On the flip side, Tech Mahindra down by 1.88%, ONGC down by 1.14%, GAIL India down by 0.93%, Grasim Industries down by 0.51% and Coal India down by 0.41% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 3.33 points or 0.15% to 2,158.99, FTSE Bursa Malaysia KLCI increased 4.69 points or 0.27% to 1,749.64, Hang Seng increased 133.2 points or 0.55% to 24,326.90 and Nikkei 225 increased 188.21 points or 0.99% to 19,173.80.

On the other hand, Taiwan Weighted decreased 30.64 points or 0.31% to 9,846.13 and Shanghai Composite decreased 11.2 points or 0.34% to 3,255.75.

Jakarta Stock Exchange is closed on account of ‘Hindu Saka New Year’ holiday.