Markets continue firm trade in late afternoon session

Indian equity benchmarks continued their firm trade in late afternoon session, despite weak opening in European markets. Sentiments remained optimistic with Economic Affairs Secretary Shaktikanta Das’ statement that the soon to be rolled out Goods and Service Tax (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 Finance Minister Arun Jaitley’s statement that the GST is on schedule for implementation from July 1 and will not lead to any significant increase in prices of goods although cost of some services may see a marginal hike. Domestic sentiments were also buoyed as Asian stocks rose amid optimism on improving global growth following Emmanuel Macron’s victory as France’s next president as well as bullish US jobs data. Furthermore, the foreign exchange reserves rose by $1.594 billion to touch a life-time high of Rs 372.73 billion in the week to April 28, supported by increase in the foreign currency assets. Meanwhile, India’s crude steel production increased 5.4 percent to 8.107 million tonnes (mt) in April, from 7.69 mt during the same month last year. On sectoral front, Auto shares were trading higher after the Supreme Court declared that tractor and farm equipment makers will be exempted from BS-IV order.

On the global front, European markets were trading in red as investors reacted to pro-European Union candidate Emmanuel Macron securing a comfortable victory to become the next president of France. Back home, in scrip specific development, Natco Pharma edged higher after the company launched a generic version of sofosbuvir 400 mg / velpatasvir 100 mg fixed dose combination in India. Sofosbuvir 400 mg / velpatasvir 100 mg fixed dose combination is sold by Gilead Sciences, globally, under the brand name Epclusa.

The BSE Sensex is currently trading at 29961.88, up by 103.08 points or 0.35% after trading in a range of 29877.41 and 30016.04. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index was higher by 0.78%.

The top gaining sectoral indices on the BSE were Realty up by 3.93%, IT up by 1.13%, Bankex up by 1.03%, Auto up by 1.01% and TECK up by 0.97%, while FMCG down by 0.51%, Metal down by 0.44%, Oil & Gas down by 0.26%, Energy down by 0.16%, Capital Goods down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.60%, Tata Motors up by 1.79%, Lupin up by 1.47%, ONGC up by 1.28% and SBI up by 1.17%. On the flip side, ITC down by 1.28%, HDFC down by 0.68%, Larsen & Toubro down by 0.67%, Adani Ports & SEZ down by 0.64% and Bajaj Auto down by 0.59% were the top losers.

Meanwhile, Industry body- the Associated Chambers of Commerce and Industry of India (ASSOCHAM) welcoming the government's move to amend the Banking Regulation Act, along with enabling changes in other related laws, has proposed the formation of 'Stressed Assets Funds' (SAFs) with active participation of the cash rich public sector firms to deal with the problem of rising non-performing assets (NPAs) in the banking system.

As per Industry body, the formation of SAFs will help in revival of the assets under high leverage and once these assets are brought back to shape, the pay-backs to the SAF can take place. It has further suggested that different forms of the SAFs can be thought of, including some which can be neutral to creating a hole in the government finances.

It further said that some of the cash rich public sector companies can be encouraged to participate either in the SAFs or take over some of the assets where the present promoter wants to exit and with the green shoots in several of the sectors, this could even be an opportunity for the government or Special Purpose Vehicles to buy assets at much lower valuations. ASSOCHAM also recommended that adequate working capital should be extended to the existing promoters in cases where the stressed assets or NPAs can be turned back into healthy assets.

The CNX Nifty is currently trading at 9322.80, up by 37.50 points or 0.40% after trading in a range of 9297.95 and 9338.70. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 6.96%, Eicher Motors up by 3.75%, ACC up by 3.55%, ICICI Bank up by 2.55% and Aurobindo Pharma up by 2.33%. On the flip side, BPCL down by 1.62%, Hindalco down by 1.51%, ITC down by 1.30%, Adani Ports & SEZ down by 1.15% and Indian Oil Corp. down by 1.11% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.68 points or 0.21% to 1,766.42, Jakarta Composite increased 19.41 points or 0.34% to 5,702.79, Taiwan Weighted increased 37.31 points or 0.38% to 9,937.25, KOSPI Index increased 51.52 points or 2.3% to 2,292.76, Hang Seng increased 101.56 points or 0.41% to 24,577.91 and Nikkei 225 increased 450 points or 2.31% to 19,895.70. On the flip side, Shanghai Composite decreased 24.42 points or 0.79% to 3,078.61.

European markets were trading mostly in red; France’s CAC decreased 25.45 points or 0.47% to 5,406.95 and Germany’s DAX decreased 8.07 points or 0.06% to 12,708.82. On the flip side, UK’s FTSE 100 increased 8.11 points or 0.11% to 7,305.54.