Markets continue to trade in green in late afternoon deals

Benchmark equity indices continued to trade in green in late afternoon session, supported by gains in Healthcare, Basic Materials and Utilities sector stocks. Sentiments remained positive with World Bank’s report that India will grow at 7.2% in the current fiscal and further up to 7.7% by 2019-20 on strong fundamentals, reform momentum and improving investment scenario. Moreover, the arrival of monsoon rains too supported the sentiments. The monsoon, which delivers about 70% of India’s annual rainfall, arrived at the southern Kerala coast today, in line with weather office forecasts, brightening the outlook for higher farm output and robust economic growth. However, gains were muted with private report indicating that demonetisation effect is expected to slow down India’s GDP growth to 7.2% in January-March quarter from 7.6% in the preceding quarter. Though, it expects a recovery thereafter to an average of 7.5% in the second half of 2017 and 7.7% in 2018, supported by a release of pent-up consumption demand with remonetisation, easier financial conditions, pay hikes for government employees and modest external demand. In scrip specific development, State-run power plant equipment maker Bharat Heavy Electricals (BHEL) dropped to over eight percent, after reporting a bigger-than-expected plunge in March quarter net profit. The company's standalone net profit declined by 57% to Rs 215.55 crore in the fourth quarter ending March 31, 2017, as against Rs 505.71 crore in the corresponding quarter of the previous financial year, due to lower income and provisions for higher wages.

On the global front, European markets were trading in red, as investors fret about a Greek bailout and the possibility of an early election in Italy. Investors also keeping an eye on the U.S. jobs report due this Friday after Fed Bank of San Francisco President John Williams said three interest-rate increases this year makes sense. Back home, the BSE Sensex is currently trading at 31184.78, up by 75.50 points or 0.24% after trading in a range of 31064.04 and 31220.38. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.03%, Basic Materials up by 1.05%, Utilities up by 0.98%, Metal up by 0.67% and Auto up by 0.53%, while Telecom down by 0.98%, FMCG down by 0.87%, Consumer Durables down by 0.78% and Capital Goods down by 0.74% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.81%, Adani Ports & SEZ up by 3.41%, Lupin up by 2.67%, Dr. Reddy’s Lab up by 2.56% and GAIL India up by 2.01%. On the flip side, Power Grid down by 2.13%, ITC down by 1.36%, Hindustan Unilever down by 0.97%, HDFC Bank down by 0.78% and HDFC down by 0.77% were the top losers.

Meanwhile, in the remaining 9-month period of the current fiscal, following the Goods and Services Tax (GST) roll out from July 1, 2017, the Centre is expecting to mop up as much as Rs 55,000 crore by levy of cess, including a big chunk from demerit and luxury goods. The amount to be raised through cess on coal as well as luxury items and sin goods will be used for compensating states for revenue shortfall following the implementation of the new tax regime.

According to the revenue department's estimates, Rs 22,000 crore is expected to come from cess on coal, lignite and peat in the July-March period of current fiscal. Cess on tobacco is likely to yield around Rs 16,000 crore. The remaining amount in the ‘Goods and Services Tax Compensation Fund’ will come from cess on pan masala, aerated drinks and motor vehicles. The revenue department is hopeful that funds raised through different kinds of cess would be sufficient to take care any revenue shortfall that the states might face on account of GST roll-out.

Revenue Secretary Hasmukh Adhia had said that roughly, they would think that whatever compensation is required for current year it would be made good from the cess income which they will get this year and cess tables have been arranged accordingly. That is why they have levied cess even on small cars. The small cars have been kept within cess because there is an existing incidence on small cars and they didn't want to lose some revenues there. Besides, the GST Council had agreed on keeping base year for calculating the revenue of a state at 2015-16 and considering a secular growth rate of 14% for calculating the likely revenue of each state in the first five years of implementation of GST.

The CNX Nifty is currently trading at 9623.25, up by 18.35 points or 0.19% after trading in a range of 9581.20 and 9631.60. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 9.44%, NTPC up by 3.90%, Adani Ports & SEZ up by 3.90%, Hindalco up by 3.03% and Dr. Reddy’s Lab up by 2.65%. On the flip side, BPCL down by 2.86%, Bharti Infratel down by 2.82%, Power Grid down by 2.44%, ITC down by 1.28% and Zee Entertainment down by 0.95% were the top losers.

Asian markets were trading in red; KOSPI Index decreased 9.29 points or 0.39% to 2,343.68, Jakarta Composite dipped 6.35 points or 0.11% to 5,705.98, Nikkei 225 was down by 4.72 points or 0.02% to 19,677.85 and FTSE Bursa Malaysia KLCI shed 0.38 points or 0.02% to 1,764.51.

European markets were trading in red; UK’s FTSE 100 decreased 49.22 points or 0.65% to 7,498.41, France’s CAC shed 48.03 points or 0.9% to 5,284.44 and Germany’s DAX was down by 20.33 points or 0.16% to 12,608.62.