Benchmarks make optimistic start to new series; hit fresh record highs

Indian equity benchmarks have made an optimistic start on the first day of June series with frontline gauges hitting fresh record highs in early deals on Friday. Sentiments remained upbeat with private weather forecaster Skymet’s statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. The weather forecasting agency predicted that monsoon will make an onset over Kerala by May 29, with a margin of error of three days. Traders also took some encouragement with a report that India retained its numero uno position being the world's top most greenfield FDI investment destination for the second consecutive year, attracting $ 62.3 billion in 2016.

On the global front, Asian markets were exhibiting mixed trend at this point of time and some of the indices in the region are in red, heading for a lower finish for the week. Slump in crude oil prices have weighed heavily on the energy stocks. The US markets continued their upmove, extended their recent winning streak to six sessions.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Telecom stocks remained buzzing, as the telecom regulator Trai has directed telecom operators to stop providing discriminatory tariffs to the subscribers of the same category and report all plans to the sector watchdog within seven days of their launch. The market breadth remained in favor of advances, as there were 1,428 shares on the gaining side against 475 shares on the losing side while 82 shares remain unchanged.

The BSE Sensex is currently trading at 30868.63, up by 118.60 points or 0.39% after trading in a range of 30745.57 and 30884.18. There were 20 stocks advancing against 9 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index surged 1.15%, while Small cap index was up by 1.19%.

The top gaining sectoral indices on the BSE were Metal up by 2.35%, Basic Materials up by 1.44%, Telecom up by 1.17%, Power up by 1.14% and Auto up by 1.07%, while Oil & Gas down by 0.69%, Realty down by 0.31%, Energy down by 0.23% and PSU down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.27%, Asian Paints up by 2.40%, Adani Ports up by 1.64%, Power Grid up by 1.59% and Bharti Airtel up by 1.49%. On the flip side, Cipla down by 2.72%, TCS down by 0.69%, HDFC Bank down by 0.61%, SBI down by 0.45% and Hindustan Unilever down by 0.43% were the top losers.

Meanwhile, the Union Road Transport and Highways Minister Nitin Gadkari will soon be urging Finance Minister Arun Jaitley to bring down Goods and Services Tax (GST) rates on hybrid vehicles and other automobiles that run on alternative fuels. As per the GST Council’s fourteenth meeting hybrid cars, which are considered eco-friendly will attract a 15% cess over and above peak rate of 28%, same as those of large luxury cars and SUVs. Currently, hybrid vehicles attract excise duty of 12.5% with an effective overall tax rate of 30.3%.

Road Transport and Highways Minister said ‘I will be meeting Arun Jaitley soon to request that tax slabs for vehicles run on ethanol, bio diesel, bio CNG should be reduced. I will also request him to reduce tax rate on hybrid vehicles in order to tackle air pollution in the long run.’ The minister, who also holds Shipping portfolio, said that the government's policy is to promote electric mobility in the country and GST rate on electric vehicles has been kept at 12%.

Gadkari further said that in order to reduce India's import of crude oil, electric and hybrid vehicles along with alternate fuels like ethanol should be encouraged, and added that India import crude worth Rs 7 lakh crore. Electric, ethanol, bio diesel, bio CNG these are import substitutes and are cost effective, pollution free and indigenous too. He also said that if such vehicles are encouraged on a large scale, the cost will also come down. Besides, the automobile industry has also expressed concern on the high rate on hybrids stating it would put a spanner in the wheels of government plans to promote green vehicles.

The CNX Nifty is currently trading at 9544.95, up by 35.20 points or 0.37% after trading in a range of 9495.40 and 9545.55. There were 33 stocks advancing against 17 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Steel up by 4.70%, Aurobindo Pharma up by 2.79%, Asian Paints up by 2.38%, Yes Bank up by 2.35% and Hindalco up by 2.31%. On the flip side, Indian Oil Corporation down by 3.18%, Cipla down by 2.75%, BPCL down by 2.39%, TCS down by 0.88% and Tech Mahindra down by 0.61% were the top losers.

Asian markets were trading mixed; Shanghai Composite rose 2.91 points or 0.09% to 3,110.74, Hang Seng gained 6.5 points or 0.03% to 25,637.28, Jakarta Composite increased 13.86 points or 0.24% to 5,717.30 and KOSPI Index was up by 14.87 points or 0.63% to 2,357.80.

On the flip side, Nikkei 225 decreased 79.48 points or 0.4% to 19,733.65, Taiwan Weighted dropped 25.93 points or 0.26% to 10,082.56 and FTSE Bursa Malaysia KLCI was down by 1.46 points or 0.08% to 1,772.50.