Markets erase losses to trade in green

In a volatile trade, Indian equity benchmarks erased their earlier losses in late afternoon session and entered into positive territory, tracking firm European markets. Sentiments took support with the report that the Goods and Services Tax (GST) Council finalised 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%. The Council fixed the rates for over 1200 items under the Goods and Services tax. The outcome had largely benefited the fast-moving consumer goods sector after rates for products like hair oil, soaps and toothpaste were brought down to 18% from 22-24%. Some support also came with Union Minister Arjun Ram Meghwal’s statement that the decision to implement GST from this July 1 is one of the important economic reforms and would be a major milestone in the growth of the country. He also said that demonetisation had helped improve the GDP of the country despite apprehensions to the contrary from certain quarters, noting that the growth has gone up and would reach 10%.

On the global front, European markets were trading in green on the back of overnight gains on Wall Street as some risk appetite returned despite the ongoing political turbulence. Asian markets were also trading in green. Back home, in scrip specific development, HSIL traded higher after the company received an approval to evaluate various options in relation to the potential restructuring/ realignment of the company’s businesses with a view to streamlining businesses, accessing varied sources of funds by unlocking the intrinsic value of the company’s assets, achieving cost efficiencies, optimizing operations and increasing shareholder value.

The BSE Sensex is currently trading at 30490.84, up by 56.05 points or 0.18% after trading in a range of 30338.52 and 30712.35. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.70%, while Small cap index was down by 0.75%.

The top gaining sectoral indices on the BSE were FMCG up by 2.21%, Power up by 0.73%, Telecom up by 0.54%, Bankex up by 0.47% and Utilities up by 0.39%, while Consumer Durables down by 1.37%, IT down by 0.85%, Consumer Disc down by 0.78%, TECK down by 0.64% and Auto down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.22%, Hindustan Unilever up by 2.39%, SBI up by 2.00%, Axis Bank up by 1.96% and NTPC up by 1.08%. On the flip side, Asian Paints down by 3.16%, GAIL India down by 1.59%, HDFC down by 1.08%, Infosys down by 0.89% and TCS down by 0.89% were the top losers.

Meanwhile, modifying the rule of direct borrowings by the state government entities from external agencies, in view of huge funding requirements for major infrastructure projects, the government has allowed financially sound state government entities to seek loans directly from bilateral Official development Assistance (ODA) partners. The concerned State Government will furnish guarantee and the Government of India will provide counter guarantee to obtain the loan. State government entities will include any authority, public sector undertaking or organisation of the state.

As per new guidelines, state government entities having annual revenue of more than Rs 1,000 crore in the three previous years for infrastructure projects of over Rs 5,000 crore can obtain loan. Besides, the project should have regular revenue stream and the revenues to be generated from the project should be enough for repayment of principal amount and interest. The revenues from the project would be escrowed to the extent of payment of principal and interest from time to time.

Besides, the state entities can directly approach bilateral agencies and the funding would not fall under state FRBM target. The proposed move will help state government entities in implementing projects having huge financial requirements which otherwise would have been faced fund crunch despite being viable.

The CNX Nifty is currently trading at 9435.10, up by 5.65 points or 0.06% after trading in a range of 9390.75 and 9505.75. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ITC up by 3.22%, Hindustan Unilever up by 2.20%, Yes Bank up by 2.19%, SBI up by 2.00% and Axis Bank up by 1.98%. On the flip side, Asian Paints down by 3.31%, GAIL India down by 1.53%, Tech Mahindra down by 1.47%, Indusind Bank down by 1.41% and Indiabulls Housing Finance down by 1.30% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 0.49 points or 0.02% to 3,090.63, FTSE Bursa Malaysia KLCI increased 1.39 points or 0.08% to 1,768.56, KOSPI Index increased 1.66 points or 0.07% to 2,288.48, Nikkei 225 increased 36.9 points or 0.19% to 19,590.76, Hang Seng increased 38.35 points or 0.15% to 25,174.87 and Jakarta Composite increased 163.76 points or 2.9% to 5,809.21. On the flip side, Taiwan Weighted decreased 21.83 points or 0.22% to 9,947.62.

All European markets were trading in green; France’s CAC increased 27.08 points or 0.51% to 5,316.81, UK’s FTSE 100 increased 28.73 points or 0.39% to 7,465.15 and Germany’s DAX increased 38.41 points or 0.31% to 12,628.47.