Markets continue to trade in green in afternoon deals

Benchmark equity indices continued to trade in green in afternoon session, on the back of sustained buying by domestic institutional investors and retailers. Sentiments got some support with Union Minister Bandaru Dattatreya’s statement that retirement fund body EPFO will invest Rs 20,000 crore in exchange traded funds this fiscal as it has decided to raise the investment limit in ETFs. The Employees Provident Fund Organization (EPFO) Central Board of Trustees meeting agreed on the proposal for raising ETF investments from 10% to 15% of investible deposits. However, there was some cautiousness too with traders’ body Confederation of All India Traders (CAIT) stating that classification of goods under different tax slabs of the proposed pan-India indirect tax regime of the GST has created an environment of anxiety and concern among the trading community across the country. In scrip specific development, Coal India (CIL) was up by over half a percent after reporting 6% growth in its overall despatch of coal to 45.3 million tonnes in April 2017 as compared to 42.7 mt despatched during April 2016.

On the global front, Asian markets were trading mostly in red, as investors awaited a raft of economic data later this week that will provide fresh insight into the world economy. Back home, the BSE Sensex is currently trading at 31106.03, up by 77.82 points or 0.25% after trading in a range of 30869.90 and 31155.40. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.58%, while Small cap index was down by 0.92%.

The top gaining sectoral indices on the BSE were FMCG up by 1.71%, Consumer Durables up by 1.31%, Metal up by 0.34%, Energy up by 0.25% and Auto up by 0.16%, while Realty down by 2.54%, Healthcare down by 2.30%, IT down by 1.25%, TECK down by 1.12% and Power down by 0.67% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.10%, ITC up by 2.54%, HDFC up by 2.28%, Power Grid up by 2.10% and Maruti Suzuki up by 1.34%. On the flip side, Sun Pharma down by 10.82%, Adani Ports &SEZ down by 4.77%, Infosys down by 1.43%, ICICI Bank down by 1.32% and Wipro down by 1.27% were the top losers.

Meanwhile, Indian Credit Rating Agency (ICRA), domestic rating agency, in its latest report has said that the landmark goods and services tax (GST), scheduled to be implemented from July 1, is likely to have a positive impact on the way transportation and storage of goods happens across the country. It also said that the new tax regime is likely to improve the flow of goods on account of reduction in turnaround time as value-added tax or VAT related check posts will be removed. It added that post GST, a more efficient and organised logistics sector is expected to evolve gradually.

According to rating agency, the upcoming GST regime would have three major implications for the logistics sector such as consolidation of warehousing network and a shift towards a 'hub and spoke' model, higher degree of tax compliance and creation of level playing field between express and traditional transport services. ICRA also explained that as the additional 2 percent central sales tax (CST) levied on inter-state sale of goods cease to exist warehouse location would no longer be based on tax considerations and instead would be based on demand considerations this would also result in consolidation of warehouses.

ICRA expects that over time there will be a shift towards a 'hub and spoke' model in which fewer but bigger trucks will move between bigger warehouses. In addition, it also said that flow of goods is expected to improve with reduction in turnaround time as VAT related check posts will be removed and added that it may lead to 15-20 percent reduction in the truck stoppage time.

The CNX Nifty is currently trading at 9606.10, up by 11.00 points or 0.11% after trading in a range of 9547.70 and 9622.30. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.02%, Power Grid up by 2.87%, ITC up by 2.36%, HDFC up by 2.29% and Bharti Infratel up by 1.87%. On the flip side, Tech Mahindra down by 10.89%, Sun Pharma down by 10.74%, Adani Ports &SEZ down by 4.94%, Yes Bank down by 2.47% and Bank of Baroda down by 1.76% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 6.54 points or 0.06% to 10,101.95, Jakarta Composite declined 5.34 points or 0.09% to 5,711.47, Nikkei 225 was down by 4.27 points or 0.02% to 19,682.57, KOSPI Index shed 2.33 points or 0.1% to 2,352.97 and FTSE Bursa Malaysia KLCI dipped 1 points or 0.06% to 1,771.30.

On the flip side, Hang Seng increased 32.81 points or 0.13% to 25,672.08.