Indian benchmarks continue to trade in green in noon session

Indian equity indices continued to trade in green in the noon session as investors took cues from the GST Council on Saturday clearing the pending rules and deciding the rates of tax and cess on the remaining items. Now, the new indirect tax regime is most likely to be rolled out on July 1, despite reservations voiced by West Bengal. All other states have agreed to the timeline. Sentiments remained upbeat with World Bank report indicating that successful demonetization will help in raising revenues on sustained basis as more and more people will come under the tax net. During 2016-17, India generated additional tax revenues as unreported cash identified both through the amnesty scheme and demonetisation were brought under the tax net.

Some support also came with the report that FDI inflows into the services sector rose by about 26% to $8.68 billion in 2016- 17 with the government taking steps to improve the ease of doing business and attracting foreign investments. According to data of the Department of Industrial Policy and Promotion (DIPP), the sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has received foreign direct investment (FDI) worth $6.89 billion in 2015-16. Meanwhile, shares of jewellery companies rose sharply today, following the government’s announcement of GST rates on gold. The GST Council on Saturday announced that the rate on gold and gold jewellery would be at 3%, while the import duty of 10%, which will be over and above the 3%, remains unchanged. Currently, tax on gold and jewellery is at 2% and the current GST rate is slightly higher at 3%, but lower than the 5% rate that was expected.

On the global front, Asian markets ware trading mixed on Monday, as investors turned jittery ahead of the week packed with political events and economic data from the United Kingdom's elections to China's export data. Prices of oil rose following reports that four Arab nations cut diplomatic ties to Qatar. Further, China's stocks declined, as sharp losses in financial firms offset news the securities regulator had cut the number of initial public offerings coming onto the market. China Securities Regulatory Commission (CSRC) approved on Friday only four IPOs to raise up to 1.5 billion yuan ($220.5 million), down from 7 IPOs in the past week. Meanwhile, a private survey showed that China's factory activity expanded modestly in May while its service sector improved at a solid pace.

Back home, stocks from Consumer Durables, Realty and Consumer Disc counters were supporting the markets’ uptrend, while those from Utilities and IT counters were adding to the underlying cautious undertone. In scrip specific development, Ujaas Energy gained after the company received order from Hindustan Aeronautics for design, engineering, manufacturing/procurement, supply, construction, erection, testing and commissioning of 15 MW (AC) ground Mounted Solar Power Plant at HAL Ojhar Township, Nashik district in state of Maharashtra. Moreover, Tata Elxsi jumped after the company inked licensing and integration support deal with one of the world’s top 5 OEMs for their driverless car program.

The market breadth remained optimistic, as there were 1435 shares on the gaining side against 913 shares on the losing side, while 134 shares remained unchanged.

The BSE Sensex is currently trading at 31324.20, up by 50.91 points or 0.16% after trading in a range of 31198.22 and 31344.05. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 5.97%, Realty up by 1.15%, Consumer Disc up by 1.13%, Telecom up by 0.92% and Capital Goods up by 0.88%, while Utilities down by 0.06% and IT down by 0.06% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.66%, ONGC up by 1.35%, Tata Steel up by 1.14%, Adani Ports & SEZ up by 1.09% and Larsen & Toubro up by 1.07%. On the flip side, Coal India down by 1.04%, ITC down by 0.63%, Power Grid down by 0.56%, Lupin down by 0.54% and Infosys down by 0.51% were the top losers.

Meanwhile, with the government taking series of steps to improve ease of doing business in India and attracting foreign investments, Foreign Direct Investment (FDI) inflows into the services sector rose  by around 26% to $8.68 billion in fiscal year 2016- 17. According to data of the Department of Industrial Policy and Promotion (DIPP), the services sector, which includes banking, outsourcing, insurance, Research & Development (R&D), courier and technology testing, had FDI worth $6.89 billion in 2015-16.

With FDI growth in key sectors like services and telecom, the overall foreign investment inflows in the country too increased by 9% to $43.5 billion during the previous fiscal. Increasing foreign inflows in the services sector assumes significance as it contributes over 60% to India's GDP. To further boost investment in the services sector, the government is considering relaxation of policy in areas like single brand retail trading, multi-brand retail trading, print media and construction. The government is also focusing on enhancing services exports.

Foreign investments are considered crucial for India, which needs around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Growth in foreign investments helps improve the country s balance of payments (BoP) situation and strengthen the rupee value against other global currencies, especially the US dollar.

The CNX Nifty is currently trading at 9678.25, up by 24.75 points or 0.26% after trading in a range of 9640.70 and 9682.80. There were 32 stocks advancing against 17 stocks declining on the index, while 2 stocks remained unchanged.

The top gainers on Nifty were Bajaj Auto up by 2.60%, Yes Bank up by 2.18%, Bharti Infratel up by 2.07%, ONGC up by 1.41% and IOC up by 1.22%. On the flip side, Ultratech Cement down by 1.16%, Coal India down by 1.04%, Lupin down by 0.74%, ITC down by 0.61% and Power Grid down by 0.53% were the top losers.

Asian markets were trading mixed; Nikkei 225 rose by 0.14%, FTSE Bursa Malaysia KLCI increased 0.46%, Jakarta Composite gained 0.19% and Taiwan Weighted was up by 0.68%. On the flip side, Hang Seng decreased 0.23%, Shanghai Composite shed 0.46% and KOSPI Index was down by 0.12%.