Firm trade prevails in late morning session

Indian equity benchmarks continued their sanguine trade in late morning session on account of buying in frontline blue chip counters, taking cues from the progress made on the GST front. The rupee opened higher against dollar on account of selling of American currency by banks and exporters and too supported the markets. Foreign Portfolio Investors stood net sellers in domestic equity markets on Friday and sold shares worth Rs 610.20 crore with gross purchases and gross sales of Rs 5,018.68 crore and Rs 5,628.88 crore, respectively. Traders were getting support from Union Finance Minister Arun Jaitley’s statement that the Goods and Services Tax (GST) will be rolled from July 1, amid concerns raised by business industries citing unpreparedness to comply with the provisions of the new indirect tax regime. He said the next meeting of the GST Council will be held on June 30 to redress some outstanding issues. Risk-on improved after the GST Council yesterday relaxed return filing rules for businesses for the first two months of the rollout of the new indirect tax regime even as it stuck to the 1 July launch date. Meanwhile, the industry body Confederation of Indian Industry (CII) said India Inc is ready for the implementation of the Goods and Services Tax (GST) from July 1, as the new indirect tax regime will contribute significantly towards economic growth, job creation and exports expansion.

Traders were seen piling up position in FMCG, Energy and Telecom stocks, while selling was witnessed in Healthcare, Realty and IT stocks. In scrip specific development, Dr. Reddy’s Laboratories was trading in red as the drug firm has been issued one observation from USFDA after the inspection of a unit of its Srikakulam formulations facility. Lanco Infratech touched fresh all-time low in early trade after the company on Saturday said that Reserve Bank of India (RBI) has directed its lead lender IDBI Bank to initiate insolvency proceedings for the company under the Insolvency and Bankruptcy Code (IBC). Heavy selling was witnessed in stocks like Amtek Auto, Bhushan Steel, Monnet Ispat & Energy as the Bankers are meeting from Monday to finalize their next course of action on six of the 12 bad loan accounts for immediate referral to National Company Law Tribunal (NCLT) after the Reserve Bank of India (RBI) named the largest defaulters to face bankruptcy proceedings. Hotels stocks like TAJGVK Hotels & Resorts, Indian Hotels Company, EIH Associated Hotels, Oriental Hotels, India Tourism Development Corporation (ITDC), Royal Orchid Hotels, Viceroy Hotels and The BYKE Hospitality were trading in green supported by new GST tax rates for rooms. The GST Council, which met for the 17th time on Sunday, decided to fix the tax rate for AC hotels at 18 per cent where the billed amount is up to Rs 7,500. Earlier, it had proposed to levy 28 per cent on hotel bills exceeding Rs 5,000.

On the global front, Asian shares were trading mostly in green as markets geared up ahead of Brexit negotiations between the UK and the European Union. The International Monetary Fund urged Japan to avoid withdrawing fiscal policy stimulus and to keep monetary policy accommodative to accelerate growth and achieve higher inflation. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,600 and 31,200 levels respectively. The market breadth on BSE was positive in the ratio of 1184:1029, while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 31204.20, up by 147.80 points or 0.48% after trading in a range of 31163.35 and 31247.69. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index and Small cap index both were up by 0.10%.

The top gaining sectoral indices on the BSE were FMCG up by 0.81%, Energy up by 0.72%, Telecom up by 0.56%, Metal up by 0.54% and Capital Goods up by 0.46%, while Healthcare down by 0.80%, Realty down by 0.67% and IT down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 2.10%, ITC up by 1.53%, Reliance Industries up by 1.52%, Bajaj Auto up by 1.44% and Tata Steel up by 1.37%.

On the flip side, Cipla down by 2.06%, Lupin down by 1.11%, Coal India down by 1.10%, Dr. Reddy’s Lab down by 1.01% and Sun Pharma down by 0.95% were the top losers.

Meanwhile, industry body, Associated Chambers of Commerce and Industry of India (Assocham) has urged Finance Minister Arun Jaitley to postpone the implementation Goods and Services Tax (GST) proposed from July 1 and stated that it will be difficult for the taxpayers to comply with the requirements of the new unified indirect tax regime as the IT network is not yet ready for it.

The industry chamber has stated that significant amount of work has been done on the GST front, but there are various issues that need to be looked at before it can be implemented successfully. It pointed out that taxpayers have not yet migrated to the GSTN portal due to reasons such as non-familiarity with IT tools along with registration process. It also noted that during the current phase of GST migration for existing assessees, the server was constantly under maintenance.

Adding further, Assocham has said that this raises the huge question as to whether the IT infrastructure has been appropriately tested. It also raises questions as to whether this system can survive in the GST era when it had undergone maintenance during the second phase of migration when the traffic was restricted only to migration. It noted that at present there are about 80 lakh excise, service tax and VAT assessees, of which 64.35 lakh have already migrated to the portal of GST Network.

The CNX Nifty is currently trading at 9623.70, up by 35.65 points or 0.37% after trading in a range of 9614.90 and 9638.75. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.04%, Adani Ports & Special Economic Zone up by 1.89%, Reliance Industries up by 1.45%, Tata Steel up by 1.43% and IndusInd Bank up by 1.37%.

On the flip side, Cipla down by 2.11%, Indiabulls Housing down by 1.46%, Coal India down by 1.37%, Aurobindo Pharma down by 1.22% and Dr. Reddy’s Lab down by 1.22% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 7.99 points or 0.34% to 2,369.82, Jakarta Composite increased 10.55 points or 0.18% to 5,734.18, Shanghai Composite increased 23.56 points or 0.75% to 3,146.72, Taiwan Weighted increased 83.03 points or 0.82% to 10,239.76, Nikkei 225 increased 110.32 points or 0.55% to 20,053.58 and Hang Seng increased 235.63 points or 0.92% to 25,862.12.

On the other hand, FTSE Bursa Malaysia KLCI decreased 3.69 points or 0.21% to 1,787.62.