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 remained positive with NITI Aayog CEO Amitabh Kant’s statement that the Goods and Services Tax, to be rolled out next month as the biggest tax reform since independence, will help India achieve 9 percent growth rate. He said GST will simplify India's taxation system and help deal with tax evasion. Moreover, good prospects of monsoon rains too supported the sentiment. The Meteorological department has upgraded the South-West monsoon forecast to 98 per cent of the long-term average rainfall from 96 per cent earlier. However, further gains were muted as investors awaited the outcome of RBI’s bimonthly Monetary Policy Committee meet. In scrip specific development, Jet Airways was trading in green after unveiling a special discounted all-inclusive, one-way economy class fares, starting as low as Rs 1,111, on select domestic sectors for a limited period. 

On the global front, Asian markets were trading mixed, as traders preferred to remain on the sidelines ahead of an election in Britain, a European Central Bank meeting, and testimony at a Senate Intelligence Committee hearing by James Comey, the former FBI chief fired by President Donald Trump. Back home, the BSE Sensex is currently trading at 31280.38, up by 89.82 points or 0.29% after trading in a range of 31229.25 and 31346.99. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.55%, while Small cap index gained 0.81%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.33%, FMCG up by 1.05%, Realty up by 0.92%, Metal up by 0.74% and Consumer Durables up by 0.68%, while IT down by 0.58% and TECK down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.14%, GAIL India up by 1.75%, Hindustan Unilever up by 1.72%, Sun Pharma up by 1.62% and ICICI Bank up by 1.41%. On the flip side, TCS down by 1.42%, Wipro down by 1.08%, Tata Motors down by 1.06%, HDFC down by 0.68% and NTPC down by 0.63% were the top losers.

Meanwhile, the domestic rating agency, ICRA in its latest report has said that the new 5 percent rate finalized on solar PV cells and modules under the goods and services tax (GST) regime, which is to be implemented from next month, is likely to have a marginally negative impact on new solar power projects due to an increase in capital cost arising from the higher tax rate.

ICRA has said that with 5 percent GST rate, the impact on capital cost for new solar power projects is estimated to be limited at about 6 percent, which would thus translate into an increase in levellised cost of generation by 11-12 paise per unit for such projects. It also stated that the developers would incur a higher capital cost for the already undergoing solar projects under the competitive bidding route in last six-month period against the cost envisaged at the time of bidding. It added that given that the competitively bid-based solar tariffs have significantly come down over the last 4-5 month period, timely approval by regulators for pass-through of any higher cost incidence due to change in taxation which is permitted under change in law, remains crucial from developers’ perspective.

Rating agency has mentioned that the solar project awards in last 5-6 month period stood at about 2.5-3 GW mainly under National Solar Mission route and state policy route, wherein tariffs have dropped to Rs 2.44 in May 2017 from Rs 4.4 unit in November 2016 for projects in Badla Solar Park in Rajasthan. It also pointed out that the viability of such bid tariffs hinges on structuring of debt with longer tenures, competitive funding costs and the ability of the project developers to keep the cost of modules within the budgeted levels.

The CNX Nifty is currently trading at 9663.20, up by 26.05 points or 0.27% after trading in a range of 9648.00 and 9678.55. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.11%, Hindustan Unilever up by 1.96%, Vedanta up by 1.92%, Sun Pharma up by 1.70% and GAIL India up by 1.50%. On the flip side, BPCL down by 1.54%, TCS down by 1.52%, Wipro down by 1.12%, Tata Motors down by 1.08% and Yes Bank down by 0.95% were the top losers.

The Asian markets were trading mixed; Taiwan Weighted increased 3.81 points or 0.04% to 10,209.99, Nikkei 225 rose 4.72 points or 0.02% to 19,984.62 and Shanghai Composite was up by 32.52 points or 1.05% to 3,134.65. On the flip side, Hang Seng decreased 65.79 points or 0.25% to 25,931.35, KOSPI Index declined 8.48 points or 0.36% to 2,360.14 and FTSE Bursa Malaysia KLCI was down by 2.12 points or 0.12% to 1,788.89.