Markets to make a flat start of the new series

The Indian markets snapped the March series on a strong note supported by short covering and some positive economic development on the domestic front. Today, the start of the new series is likely to be flat but in green on mostly positive global cues. Markets are likely to get some support with GST development, as with GST rollout looking imminent from July 1 after the Lok Sabha's approval, the Centre and states will sit together today to finalise rules and regulations of the new indirect tax regime. The GST Council has already approved five sets of rules relating to registration, payments, refund, invoice and returns. The aviation stocks will keep buzzing, as the UDAAN scheme has been rolled out and five airlines will operate on 128 routes connecting over 30 unserved airports under the regional connectivity scheme wherein fares are capped at Rs 2,500 for one-hour flights. There will be some buzz in coal and mining stocks too, on report that the government plans to amend the rules for auctioning of coal mines through competitive bidding. However, there will be some concern in export oriented stocks, as exporters are apprehensive that their liquidity will get hit and costs would go up once the GST regime is in place in three months time.

The US markets closed in green with tech heavy Nasdaq setting record closing high in the last session, following the release of a report from the Commerce Department showing stronger than previously estimated economic growth in the fourth quarter of 2016. The Asian markets have made a mixed start with some indices trading in red. The Japanese market was however trading higher by over half a percent after Japan’s core consumer prices rose slightly for a second month in February, while the jobless rate dropped to the lowest level since 1994.

Back home, the final day of March series F&O expiry turned out to be a good session for the Indian equity indices as they managed to settle with gains of over quarter a percent. Sentiments were buoyant after Lok Sabha passed 4 GST-related laws, marking another step towards the rollout of the single national tax on July 1. The unified tax regime is expected to boost economic growth by about 0.5 percentage points in its first year of implementation. While the model law is available, few fundamental aspects, such as the states where tax has to be paid by service providers having multiple offices, treatment of current excise incentives, offset of tax already paid on transition stock, etc, are still unclear. The four bills, passed by the lower house, would now be presented before the upper house of parliament. Further, inventors got some confidence with Union Minister Arjun Ram Meghwal's statement that the Insolvency and Bankruptcy Code is a key economic reform that will facilitate the ease of doing business. The code provides for a market determined, time-bound mechanism for orderly resolution of insolvency, wherever possible, and ease of exit, wherever required. Meanwhile, Aviation stocks gained traction after India's Minister of State for Aviation Jayant Sinha said the government will provide Rs 2.05 billion ($31.57 million) financial support to boost airline travel between smaller cities. Further, some auto stocks including Hero MotoCorp recovered from steep losses after the country's top court banned sale of new vehicles with older Euro III fuel technology from April 1. A bench of justices Madan B Lokur and Deepak Gupta on Wednesday said that health of millions of citizens was more important that commercial interests of manufacturers and directed the government not allow registration of polluting BS-III vehicles after March 31. Finally, the BSE Sensex surged 115.99 points or 0.39% to 29647.42, while the CNX Nifty was up by 29.95 points or 0.33% to 9,173.75.