Indian stock markets settle with moderate gains; Nifty reclaims 9300 mark

Indian stock markets witnessed a fairly stable day of trade on Monday, as investors' sentiments around the globe turned optimistic after Emmanuel Macron was elected French president with a business-friendly vision of European integration, defeating Marine Le Pen, a far-right nationalist who threatened to take France out of the European Union. On the domestic front, sentiments got a boost after Finance Minister Arun Jaitley ruled out any surprises in the tax rates in the Goods & Services Tax (GST) that is proposed to be rolled out on July 1 and also assured that there will be no cascading in goods and commodities, which can even see tax rates coming down a little. The finance minister chaired GST council is scheduled to finalise and approve the rates of different commodities and services on May 18-19. Adding the optimism among investors, Economic Affairs Secretary Shaktikanta Das said the soon to be rolled out GST regime will help the country to grow close to 8 percent in next fiscal 2018-19. He also stated that the GST will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Some support also came with the report that India is planning to revamp its foreign trade policy and relook at incentives to give a leg up to the export sector, which is hurt by lower global demand as well as an appreciating rupee. The government proposes to come out with a mid-term review of the Foreign Trade Policy (FTP) 2015-20 in September. However, gains remained capped with the report that India's FDI inflow momentum may slow down this year and exports too may not revive with 'full gusto' as domestic bottlenecks remain.

On the global front, Asian markets ended mostly higher on Monday, as risk appetite firmed after pro-European Union candidate Emmanuel Macron comfortably won French presidential elections and energy prices rebounded. Sentiments improve further after a better-than-expected US employment report helped lift the benchmark S&P 500 Index to a record high in the previous session. The US benchmark crude oil contract rose 1.5% on Friday after Saudi Arabia's energy minister reportedly said OPEC's production cuts, due to end in June, will likely be extended till the end of 2017. However, Chinese markets extended a four-week losing streak amid ongoing concerns about tighter regulations and tepid economic data. 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. Meanwhile, European equities dipped, with French shares, which hit 9 1/2-year highs on Friday, underperforming the wider market.

On the global front, the local benchmarks started the session on firm note, tracking the gains on Wall Street following the release of better-than-expected US jobs data. Thereafter, the frontline indices managed to gain traction and touched the intraday highs in the late morning trade. However, the key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Finally, the NSE's 50-share broadly followed index - Nifty garnered over quarter percent to settle above the crucial 9,300 levels, while Bombay Stock Exchange's Sensitive Index - Sensex accumulated sixty-seven points and closed above the psychological 29,900 mark. Moreover, the broader markets too went home with notable gains in the session.

The market breadth remained optimistic, as there were 1619 shares on the gaining side against 1151 shares on the losing side, while 190 shares remained unchanged.

Finally, the BSE Sensex gained 67.35 points or 0.23% to 29926.15, while the CNX Nifty was up by 28.75 points or 0.31% to 9,314.05. 

The BSE Sensex touched a high and a low of 30016.04 and 29877.41, respectively and there were 20 stocks on gainers side as against 10 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.5%, while Small cap index was up by 0.7%.

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 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.

The top gainers on the Sensex were Lupin up by 2.32%, Bharti Airtel up by 1.91%, Asian Paints up by 1.81%, ICICI Bank up by 1.59% and ONGC up by 1.53%. On the flip side, ITC down by 1.48%, HDFC down by 1.08%, Bajaj Auto down by 0.94%, Larsen & Toubro down by 0.94% and Adani Ports & SEZ down by 0.75% were the top losers.

Meanwhile, projecting a 7.5 per cent growth in the current fiscal, 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. He said that in 2017-18, we are expecting a 7.5 per cent growth. it would be reasonable to expect that in 2018-19, India will log close to 8 per cent growth.” He argued that impact of GST this year will be felt for nine months. By next year, the GST would have stabilised much more and the full-year impact of the GST will be seen by that time.

Economic Affairs Secretary further noted that the GST will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. He further praised the continuous efforts of government such as the demonetization move which had led to widening of tax base and curbing of a parallel shadow economy, procedural reforms which are stepping up public investment in infrastructure and added that all these factors put together will add to the maintenance of GDP growth.

The International Monetary Fund too expects the adoption of the GST to help raise India's medium term GDP growth to over 8 per cent. Das further expressed confidence that even with the 3.2 percent (fiscal deficit target) spelt out in Budget of current year and 3 percent in next two years, it should be possible for the government to achieve a debt to GDP of 60 percent by 2023 and said that once fiscal deficit targets are achieved, there is a very good probability that revenue deficit will be as per the road map.

The CNX Nifty traded in a range of 9,338.70 and 9,297.95. There were 33 stocks in green as against 18 stocks in red on the index.

The top gainers on Nifty were Ambuja Cement up by 4.89%, Eicher Motors up by 3.98%, ACC up by 2.67%, Aurobindo Pharma up by 2.58% and Bharti Airtel up by 2.19%. On the flip side, ITC down by 1.39%, BPCL down by 1.37%, Bajaj-Auto down by 1.2%, HDFC down by 1.15% and IOC down by 1.05% were the top losers.

Euroepan markets were trading in 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.