Benchmarks trade in fine fettle in early deals; Sensex reclaims 30,000 mark

Indian equity benchmarks have made a gap-up opening and are trading in fine fettle in early deals, with Sensex recapturing its crucial 30,000 (Sensex). Sentiments remained up-beat with report that the core sector in the country grew 5% in March, a significant rise from the 1% growth registered in February on account of a favourable base effect. Also, core sector growth for the year ended March hit a five-year high, registering a growth rate of 4.5% over the previous year. Traders also took some encouragement with Prime Minister Narendra Modi's assertion that India was never a more promising investment destination than it is today. He said that today, Indian economy is the fastest growing major economy in the world. In addition to maintaining this pace, our focus is to remove the inefficiencies from the system.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time, with some indices gaining about half a percent coming after a long weekend. Though, the Chinese market was marginally in red after a gauge of April manufacturing fell below estimates. The US markets made a mixed closing in last session on getting some downbeat economic data, while the personal spending was unchanged for the second consecutive month, personal income rose slightly less than expected in the month of March.

Back home, Controller General of Accounts (CGA), Anthony Lianzuala has said that the government is confident of achieving the fiscal deficit target of 3.5 percent for 2016- 17. On the sectoral front, stocks related to realty sector remained buzzing, as the Real Estate Regulatory Act (RERA) came into effect from May 1. The Act would bring about a paradigm shift in the way the real estate industry operates and improve the level of transparency and accountability of developers. The market breadth indicating the overall health of the market was strong, with 1,428 shares gaining and 715 shares declining, while a total of 105 shares were unchanged.

The BSE Sensex is currently trading at 30058.47, up by 140.07 points or 0.47% after trading in a range of 30001.94 and 30069.24. There were 21 stocks advancing against 8 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.71%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Realty up by 2.68%, Consumer Durables up by 1.44%, Metal up by 1.15%, Oil & Gas up by 1.08% and PSU was up by 1.06%, while Telecom was down by 0.34% remained the lone losing index on BSE.

The top gainers on the Sensex were ONGC up by 2.52%, Maruti Suzuki up by 1.96%, HDFC up by 1.92%, Bajaj Auto up by 1.51% and Hero MotoCorp up by 1.37%. On the flip side, Bharti Airtel down by 1.23%, Tata Motors down by 1.06%, Reliance Industries down by 0.58%, Sun Pharma down by 0.26% and Hindustan Unilever down by 0.20% were the top losers.

Meanwhile, in order to align foreign trade policy (FTP) with the Goods and Services tax (GST), which is to be rolled out from July 1, the commerce ministry will modify certain portions of the policy. The ministry also proposes to come out with the mid-year review of FTP, a few months ahead of the schedule, before the GST rollout. The ministry was expected to complete the review by September but as the GST roll-out is scheduled from July 1, they have to make changes in it and also prepone the completion of review.

For the GST, the ministry may have to make changes in chapters relating to incentives for exporters; duty exemption schemes; export promotion capital goods scheme and deemed exports. As there is no provision of ab-initio exemption in the GST, exporters would have to pay the duties and then seek the refund. Currently, exporters are exempted from paying taxes. But under the GST regime, they have to pay the duties and then seek refunds. As per estimates, over Rs 1.85 lakh crore working capital of exporters may get stuck annually with the government under the GST. Blocking of this amount would push up the manufacturing cost of exporters as they have to borrow more from banks.

Earlier, the commerce ministry had pressed the GST Council to keep exports out of the framework of the new indirect tax regime and levy lower taxes on labour-intensive sectors like leather, cement and plantation. Refund of taxes takes about six to eight months and hence it is necessary to give an ab-intio exemption to exporters. Meanwhile, the 5-year foreign trade policy (2015-20) provides a framework for boosting exports of goods and services besides creation of employment and increasing value addition.

The CNX Nifty is currently trading at 9347.25, up by 43.20 points or 0.46% after trading in a range of 9322.10 and 9352.55. There were 35 stocks advancing against 14 stocks declining on the index, while 2 stocks remained unchanged.

The top gainers on Nifty were Indiabulls Housing up by 2.91%, BPCL up by 2.23%, Maruti Suzuki up by 1.93%, HDFC up by 1.87% and ONGC up by 1.74%. On the flip side, ACC down by 2.47%, Ambuja Cement down by 2.34%, Tata Motors - DVR down by 2.07%, Bharti Airtel down by 1.48% and Tata Motors down by 1.46% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI gained 7.77 points or 0.44% to 1,775.83, Jakarta Composite rose 14.01 points or 0.25% to 5,699.31, KOSPI Index surged 17.32 points or 0.79% to 2,222.76, Hang Seng increased 65.34 points or 0.27% to 24,680.47, Taiwan Weighted added 68.96 points or 0.7% to 9,940.96 and Nikkei 225 was up by 136.48 points or 0.71% to 19,447.00.

On the flip side, Shanghai Composite was down by 7.65 points or 0.24% to 3,147.01.