Markets sustain gains; Sensex holds above 30,600 level

Indian equity benchmarks continued to trade higher in late afternoon session amid optimism over the GST council rates for goods and services. The government on Friday unveiled four rate bands under the Goods and Services Tax (GST) for services in line with those applying to goods, a big departure from the current single rate of 15% applied on most services. Most rates fall under 18% category which mostly won’t pinch the common man. A positive start to European markets also supported the sentiments. Traders remained optimistic with CII-IBA’s joint survey that India’s economy is set to witness improvement in the overall conditions, owing to growth of external financial linkages, ample funds and pickup in the domestic economic activity. The CII-IBA Financial Conditions Index moved up to 56.9 for the first quarter of current financial year 2017-18 from 48 in the fourth quarter of financial year 2016-17. However, upside remained capped with Crisil’s latest report stating that Industry stabilisation, under the new tax regime, will take a couple of quarters. Though, it said that the benefits of GST on business practises and company strategies will be seen only in the medium term of 1-3 years. Meanwhile, foreign direct investment (FDI) inflows hit an all-time high of $60.1 billion in 2016-17.

On the global front, European markets were trading in green, as investors digested a multi-billion dollar merger in the chemicals industry and President Donald Trump's first overseas visit. Asian markets were also trading in green. Back home, in scrip specific development, Reliance Industries traded higher after the company’s telecom arm - Reliance Jio Infocomm (Jio) added a whopping 5,839,734 subscribers and controlled 9.29% of the telecom market as of March 31, 2017.

The BSE Sensex is currently trading at 30604.05, up by 139.13 points or 0.46% after trading in a range of 30516.87 and 30712.15. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.73%, while Small cap index was down by 0.46%.

The top gaining sectoral indices on the BSE were FMCG up by 3.09%, Consumer Durables up by 0.93%, Capital Goods up by 0.73%, TECK up by 0.49% and IT up by 0.47%, while PSU down by 1.60%, Healthcare down by 1.37%, Utilities down by 1.23%, Power down by 1.21% and Basic Materials down by 1.05% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 5.77%, Tata Motors up by 1.69%, Larsen & Toubro up by 1.64%, Adani Ports & SEZ up by 1.52% and Hindustan Unilever up by 1.33%. On the flip side, SBI down by 3.85%, Lupin down by 3.30%, Power Grid down by 2.65%, Mahindra & Mahindra down by 2.13% and Sun Pharma down by 1.94% were the top losers.

Meanwhile, aided by government’s various initiatives to improve ease of doing business, Foreign Direct Investment (FDI) flow into India increased 8 percent in fiscal year 2016-17 to touch a new high. According to the statistics released by Ministry of Commerce and Industry, FDI increased to $60.08 billion in fiscal year 2016-17 from previous high of $55.6 billion in fiscal year 2015-16.

The Commerce and Industry Ministry has said that during the last three years, the government eased foreign investment norms in 21 sectors covering 87 areas. It also said that the country has now become the topmost attractive destination for foreign investment, noting that the FDI flows increased by 62 percent to $99.72 billion as compared to $61.41 billion during the previous 30 months (April 2012 to September 2014), on the back of ‘Make In India’ initiative.

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. At present, the government is mulling easing FDI policy on construction, print media and retail sectors. Meanwhile, India needs around $1 trillion to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The CNX Nifty is currently trading at 9454.30, up by 26.40 points or 0.28% after trading in a range of 9428.00 and 9498.65. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were ITC up by 5.57%, Zee Entertainment up by 1.89%, HCL Technologies up by 1.72%, Tata Motors up by 1.67% and Larsen & Toubro up by 1.61%. On the flip side, SBI down by 3.80%, Lupin down by 3.27%, Ambuja Cement down by 3.16%, ACC down by 3.03% and Aurobindo Pharma down by 2.57% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.79 points or 0.1% to 1,770.07, KOSPI Index increased 15.55 points or 0.68% to 2,304.03, Taiwan Weighted increased 49.64 points or 0.5% to 9,997.26, Nikkei 225 increased 87.52 points or 0.45% to 19,678.28 and Hang Seng increased 216.47 points or 0.86% to 25,391.34. On the flip side, Jakarta Composite decreased 40.81 points or 0.7% to 5,751.07 and Shanghai Composite decreased 14.95 points or 0.48% to 3,075.68.

European markets were trading mostly in green; France’s CAC increased 1.29 points or 0.02% to 5,325.69 and UK’s FTSE 100 increased 30.02 points or 0.4% to 7,500.73. On the flip side, Germany’s DAX decreased 1.29 points or 0.01% to 12,637.40.