Benchmarks trade slightly in green in early deals

Indian equity benchmarks have made a positive start and are trading with marginal gains, as traders took some encouragement with IMF’s statement that India’ growth is expected to rebound to 7.2 per cent in the 2017-18 fiscal and 7.7 per cent in 2018-19 after disruptions caused by demonetisation, the IMF said this while recommending the removal of long-standing structural bottlenecks to enhance market efficiency. Some support also came after Revenue Secretary Hasmukh Adhia said he is hopeful of a smooth transition to the GST regime and says it will help domestic firms to become more competitive apart from streamlining the taxation for all business activities.

On the global front, Asian markets were trading mostly in red at this point of time, lacking any catalysts to spur further gains and some of them have slipped from a two year high. The US markets consolidated in the last session and made a flat closing, lacking any cues. Traders remained on sidelines eyeing some key economic data to be released later in the week.

Back home, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 542.47 crore on May 8, while Domestic institutional investors (DIIs) bought shares worth a net Rs 663.33 crore on the same day. In scrip specific development, Bharti Airtel fell around 1%, as investors stay cautious ahead of its March-quarter earnings due later in the day. However, Bharti Infratel gained over 1% despite the company logging 17% fall in its consolidated net profit at about Rs 596.6 crore for the quarter ended March 2017 as against the year- ago period, pulled down by higher operating expenses.

The BSE Sensex is currently trading at 29970.86, up by 44.71 points or 0.15% after trading in a range of 29912.24 and 30008.35. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.17%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Realty up by 1.50%, Metal up by 0.85%, Capital Goods up by 0.68%, Power up by 0.66% and Industrials was up by 0.66%, while Healthcare down by 0.32%, Bankex down by 0.26%, Telecom down by 0.25%, PSU down by 0.23% and Utilities down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.15%, ITC up by 1.04%, Axis Bank up by 0.92%, Reliance Industries up by 0.68% and TCS up by 0.68%. On the flip side, Cipla down by 1.35%, ICICI Bank down by 1.06%, Sun Pharma down by 0.92%, Hero MotoCorp down by 0.76% and Bharti Airtel down by 0.73% were the top losers.

Meanwhile, expressing optimism that roll out of Goods and Services Tax (GST) will not lead to any significant increase in prices of goods; the Finance Minister Arun Jaitley has said that India is on track to roll out the simplified indirect tax regime from July 1, 2017. He also said that tax rates on goods may go down marginally under the new indirect tax regime, while services may see some increase.

Jaitley said ‘the current indirect tax structure in India is fairly complicated…those who transacted in either goods or services would have to deal with multiple authorities. The whole country was divided into multiple markets. So a free movement of goods and services was not possible. Now, the idea of GST was that let there be just one tax in the country’. He further said that the GST will not have an inflationary impact since the tax on goods may actually reduce. Terming the current indirect tax structure in India as fairly complicated, he assured there would be no cascading impact of tax on tax.

Finance Minister said that the constitutional amendment gives time till September 15 for introduction of GST but the target date has been kept at July 1. He also said that a simple IT network has been put in place and there are no multiple forms for filing tax returns. He added that GST would be a transformational system and there could be some small hiccups in the beginning but he think it’s understandable, they will be able to get over that. He also said that GST with a far more efficient system will increase trade, tax collection and improve ease of doing business.

Meanwhile, the GST council, chaired by finance minister and comprising representatives of all states, is scheduled to meet on May 18-19, to finalize and approve the rates of different commodities and services. Besides, the GST Council has worked a four tiered tax structure of 5, 12, 18 and 28% for the new indirect tax regime. Additionally, a cess would be levied on top of the peak rate on demerit and luxury goods.

The CNX Nifty is currently trading at 9323.00, up by 8.95 points or 0.10% after trading in a range of 9307.70 and 9338.95. There were 27 stocks advancing against 23 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Bharti Infratel up by 1.36%, Indian Oil Corporation up by 1.04%, ITC up by 1.03%, Tata Steel up by 1.02% and HCL Tech up by 0.97%. On the flip side, Indiabulls Housing down by 1.61%, Aurobindo Pharma down by 1.18%, Bank of Baroda down by 1.16%, Ambuja Cement down by 1.11% and ICICI Bank down by 1.01% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 39.4 points or 0.2% to 19,856.30, Taiwan Weighted shed 17.92 points or 0.18% to 9,919.33, FTSE Bursa Malaysia KLCI slipped 1.85 points or 0.1% to 1,766.30 and Shanghai Composite was down by 0.94 points or 0.03% to 3,077.67.

On the flip side, Jakarta Composite increased 7.42 points or 0.13% to 5,715.28 and Hang Seng was up by 86.12 points or 0.35% to 24,664.03.