Benchmarks reverse early gains; manage to hold their neck in green

Reversing most of their early gains, Indian benchmark indices were just about holding their neck in green, with slender gains of around one tenth of a percent, losing important psychological 9,500 (Nifty) and 30,500 (Sensex) levels. Earlier, the indices started the session on firm note and extended their gains, as investors reacted positively to the Goods and Services Tax (GST) Council finalizing tax rates of goods and services under the four-slab structure with essential items of daily use being kept in the lowest bracket of 5%. Out of 1211 items, GST rates on all except six categories have been decided. Only 19 percent of goods will be taxed above 18 percent, while 81 percent of items will fall under below 18 percent GST rate slabs. However, disappointing earnings by some blue-chips companies and profit booking in Consumer Durables, financials and pharma stocks dragged the indices lower levels in noon session.

On the global front, Asian markets were trading mostly higher on Friday and the dollar held onto overnight gains made on strong economic data, but investors were cautious due to uncertainties surrounding President Donald Trump after reports he tried to influence a federal investigation. The number of Americans on unemployment fell mid-May to the lowest level since 1988, underscoring the strongest labor market in years. So-called continuing claims, or the number of people collecting jobless benefits, fell by 22,000 to 1.9 million in early May. That’s the lowest level in 29 years. Meanwhile, fears have been growing that given his political troubles Trump may run into difficulties in enacting tax cuts and other business-friendly policies.

Back home, stocks from FMCG, Telecom and Power counters were holding gains, while those from Consumer Durables, IT and Teck counters were adding to the underlying cautious undertone. In scrip specific development, Bank of Baroda gained after the bank reported net profit of Rs 154.72 crore for the quarter ended March 31, 2017 as compared to net loss of Rs 3230.14 crore for the same quarter in the previous year. Furthermore, Bhushan Steel surged after the company bagged the Kalmong west iron ore mine in Sundergarh district in an auction for the property which saw some aggressive bidding by country’s top notch steel companies.

The market breadth remained pessimistic, as there were 1073 shares on the gaining side against 1299 shares on the losing side, while 130 shares remained unchanged.

The BSE Sensex is currently trading at 30460.38, up by 25.59 points or 0.08% after trading in a range of 30456.90 and 30712.35. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.64%, while Small cap index was lower by 0.07%.

The top gaining sectoral indices on the BSE were FMCG up by 2.42%, Telecom up by 0.69%, Power up by 0.46%, Bankex up by 0.39% and Realty up by 0.26%, while Consumer Durables down by 1.37%, IT down by 1.13%, TECK down by 0.87%, Auto down by 0.87% and Consumer Disc down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.63%, Hindustan Unilever up by 2.16%, SBI up by 1.20%, Bharti Airtel up by 1.09% and Axis Bank up by 1.08%. On the flip side, TCS down by 1.54%, Infosys down by 1.31%, Maruti Suzuki down by 1.24%, Asian Paints down by 1.03% and Dr. Reddys Lab down by 0.99% were the top losers.

Meanwhile, as the government came a step closer to implementing GST from July 1 after finialising the rates of over 1200 products, Union Minister Arjun Ram Meghwal has described 2017 as year of economic reforms for India, and said that the decision to implement Goods and Services Tax (GST) regime from this July 1 is one of the important economic reforms and would be a major milestone in the growth of the country. He further said that government's Pradhan Mantri Mudra Yojana, start-up and stand-up programs will help to improve the economic level of the people and economic disparities between the poor & the rich in the country will be reduced by 2020.

Union Minister pointed that demonetisation helped improve the Gross Domestic Product (GDP) of the country despite apprehensions from certain quarters, noting that the growth has gone up and would reach 10 per cent. Meghwal also mentioned the International Monetary Fund’s (IMF) positive perspective about the country which has said that Indian economy would be in a commanding position by the year 2030.

He said that digital transactions have gone up after demonetisation and South India in general and Karnataka in particular is leading this national trend. He added that the move was a reflection of the futuristic vision of Prime Minister Narendra Modi and the country was set to become a world power with these bold decisions.

The CNX Nifty is currently trading at 9442.95, up by 13.50 points or 0.14% after trading in a range of 9441.15 and 9505.75. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were ITC up by 3.83%, Yes Bank up by 2.27%, Hindustan Unilever up by 1.96%, SBI up by 1.68% and Grasim Industries up by 1.34%. On the flip side, Hindalco down by 1.98%, Eicher Motors down by 1.82%, TCS down by 1.45%, Asian Paints down by 1.25% and Wipro down by 1.25% were the top losers.

Asian markets were trading mostly in green; KOSPI Index rose 0.11%, FTSE Bursa Malaysia KLCI gained 0.18%, Jakarta Composite increased 0.39%, Nikkei 225 added 0.31% and Hang Seng was up by 0.27%. On the flip side, Taiwan Weighted decreased 0.22% and Shanghai Composite was down by 0.26%.