Post Session: Quick Review

Indian equity benchmarks ended Monday’s trade on an optimistic note, with frontline gauges recapturing their crucial 9,300 (Nifty) and 29,900 (Sensex) levels. Sentiments remained up-beat with Finance Minister Arun Jaitley ruling out any surprises in the tax rates in the Goods and Services Tax (GST) that is proposed to be rolled out on July 1 and also asserting that there will be no cascading in goods and commodities, which can even see tax rates coming down a little. The minister also ruled out the possibility of levying tax on agriculture. Moreover, Economic Affairs Secretary Shaktikanta Das has said that the soon to be rolled out Goods and Service Tax (GST) regime will help the country to grow close to 8 per cent in next fiscal 2018-19.

Meanwhile, India has urged the Asian Development Bank (ADB) to reduce the time it takes to approve a loan as well as to disburse as the developing countries in the Asian region need to build their infrastructure and increase social sector spending. Some support also came with report that that Foreign exchange reserves rose $1.594 billion to touch a life-time high of $372.73 billion in the week to April 28, supported by increase in foreign currency assets (FCAs). The reserves had gone up $1.250 billion to $371.14 billion in the previous week. However, gains remained capped as some cautiousness came after Vice-Chairman, NITI Aayog Arvind Panagariya stated that only genuine farm income must be exempt from tax. He added that “we are only looking to find ways to stop the camouflaging of the income earned from sources other than agriculture as agricultural income”.

On the global front, European markets made weak opening, as investors reacted to pro-European Union candidate Emmanuel Macron securing a comfortable victory to become the next president of France. Some market participants citing uncertainties on whether his new party, rebranded La Republique En Marche, can get a parliamentary majority in elections in June. However, Asian markets ended mostly in green, led by over two percent jump in Japanese Nikkei, as the yen stayed weak after Emmanuel Macron was elected president of France.

Back home, some support also came after the Indian rupee strengthened against the US dollar. The rupee was trading at 64.27 a dollar at the time of equity markets closing, up 11 paise from its Friday’s close of 64.38. The rupee opened at 64.26 a dollar and touched a high and a low of 64.20 and 64.27 respectively. The exports oriented stocks remained on buyers’ radar, as Commerce & Industry Minister Nirmala Sitharaman has said that the mid-term review of the Foreign Trade Policy (FTP) 2015-20 will be announced ahead of schedule to ensure its parallel roll-out with the Goods and Services Tax (GST) regime in July. In scrip specific development, shares of ACC and Ambuja Cements, a part of the world's largest cement producer LafargeHolcim, rallied on merger plan. ACC’s board of directors at its meeting May 5, 2017 decided to commence an evaluation of a potential merger between the company and Ambuja Cements.

The NSE’s 50-share broadly followed index Nifty gained around thirty points to end above the psychological 9,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around seventy points to finish above its psychological 29,900 mark. Broader markets too traded in-line with benchmarks and ended the session with a gain of over half a percent.

The market breadth remained in favor of advances, as there were 1,610 shares on the gaining side against 1,154 shares on the losing side while 196 shares remain unchanged. (Provisional)

The BSE Sensex ended at 29926.15, up by 67.35 points or 0.23% after trading in a range of 29877.41 and 30016.04. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.50%, while Small cap index up by 0.70%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 4.53%, Telecom up by 1.98%, IT up by 1.31%, TECK up by 1.29% and Basic Materials was up by 0.84%, while FMCG down by 0.64%, Capital Goods down by 0.26%, Oil & Gas down by 0.22%, Energy down by 0.19% and Metal down by 0.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 2.32%, Bharti Airtel up by 2.15%, Asian Paints up by 1.81%, ICICI Bank up by 1.59% and Infosys up by 1.29%. On the flip side, ITC down by 1.48%, HDFC down by 1.39%, Larsen & Toubro down by 1.15%, Bajaj Auto down by 0.94% and Adani Ports down by 0.78% were the top losers. (Provisional)

Meanwhile, revenue Secretary Hasmukh Adhia has expressed hope of smooth transition to the Goods and Services Tax (GST) regime and said that it will make domestic companies more competitive apart from streamlining the taxation for all business activities. He also said that unlike in other countries, the transition to the new tax regime would be smooth in India because there are multiple points of taxation. Hence, the possibility of sudden spurt in inflation is remote.

Explaining the importance of GST for promotion of manufacturing in the country, Adhia said that cascading of taxes along with non-availability of input credit meant that domestically produced goods found it harder to compete with imported ones. He also said that the new tax regime is a multi-point tax on value addition with seamless input tax credit.

Meanwhile, eight state Assemblies have passed the State GST (SGST) Bill during April-May period, as the Centre gears up to roll out the new indirect tax regime from July. The GST Council, headed by Finance Minister Arun Jaitley, had approved the model SGST Bill at its 12th Meeting on March 16 this year. The next GST Council meeting will be held on May 18-19 to fix the tax rates of various commodities.

The CNX Nifty ended at 9314.05, up by 28.75 points or 0.31% after trading in a range of 9297.95 and 9338.70. There were 32 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 5.76%, Eicher Motors up by 4.20%, ACC up by 3.08%, Aurobindo Pharma up by 2.66% and Ultratech Cement up by 2.22%. On the flip side, ITC down by 1.52%, Adani Ports down by 1.29%, BPCL down by 1.26%, HDFC down by 1.12% and Indian Oil Corp. down by 1.06% were the top losers. (Provisional)

Euroepan markets were trading mostly red; France’s CAC declined 51.7 points or 0.95% to 5,380.70, Germany’s DAX decreased 42.24 points or 0.33% to 12,674.65 and UK’s FTSE 100 was down by 2.31 points or 0.03% to 7,295.12.

Asian equity markets ended mostly higher on Monday, with Japanese shares closing at a 17-month high, as the yen weakened on expectations of a rate hike at the Fed' s June meeting and on easing concerns over the advance of populist politics in Europe. After winning the French presidential election with some 66 percent of the vote, pro-European centrist Emmanuel Macron vowed to heal the social divisions exposed by France's acrimonious election campaign. Macron's resounding defeat of a nationalist who had vowed to ditch the euro and hold a referendum on France's EU membership brought relief to European allies who had feared another populist result after Britain's Brexit vote. However, Chinese shares bucked the regional trend to end lower after trade data disappointed investors. Official data showed that Chinese exports advanced an annual 14.3 percent in yuan terms in April. The pace of growth was weaker than the expected 16.8 percent. Likewise, imports grew 18.6 percent, but slower than the 29.3 percent rise economists had forecast.