Indian equities settle with paltry gain; Nifty ends above 9500 mark

Indian equity markets started the session on a sluggish note but managed to eke out some gains by the end of trade, as the benchmark indices clawed back into the green terrain in the last leg of trade on getting some supportive leads from the European markets. The session largely remained characterized by choppiness as investors remained cautious ahead of the landmark tax reform Goods and Services Tax (GST), which is set to launch today midnight. The indices ended the month of June in negative, first monthly loss this year.

Broader markets managed a touch better than the larger peers, as the BSE’s midcap and smallcap indices settled with gains of 0.63% and 0.66% respectively. Sentiments got some support with Industry body FICCI's report that the rollout of GST will bring about significant gains to India's economy and it looks forward to working with the government for successful implementation of the crucial tax reform. Also, Arun Jaitley said that GST is an efficient and simple system with less corruption, adding that prices should decline after GST is in place July 1, while anticipating some teething troubles. Meanwhile, Shares of telecom companies declined after ICRA’s latest report indicated that intense competition and pricing pressure will continue to take a toll on the telecom sector with industry revenue expected to fall another 6 percent during the current financial year. Further, mixed reaction was observed in real estate stocks after the government on Thursday hiked the GST rate for the construction sector to 18% from 12%, but removed land value from computation of tax liability. Auto stocks edged lower on worries that GST would push up prices of cars and lead to a decline in sales.

On the global front, Asian equity markets ended mostly lower on Friday, as major central banks signalled that the era of cheap money was coming to an end, which hurt both U.S. markets overnight. Japanese shares hit two-week lows, with a stronger yen, weak overnight cues from Wall Street and mixed economic reports weighing on sentiment. While consumer price inflation rose for the fifth straight month in May, consumer spending remained tepid, the jobless rate ticked higher and industrial output slipped back into contraction, adding to underlying risks. Further, Hong Kong shares closed down, tracking weak global markets, but recorded their sixth straight monthly gain on expectations of supportive measures from Beijing at the 20th anniversary of Hong Kong's handover to China on July 1. Meanwhile, European stocks edged higher Friday, with technology and consumer-related shares on the mend after a hefty selloff, but the region's benchmark was still on track to finish June in the red.

Back home, market breadth remained optimistic, as there were 1358 shares on the gaining side against 1209 shares on the losing side, while 184 shares remained unchanged.

Finally, the BSE Sensex gained 64.09 points or 0.21% to 30921.61, while the CNX Nifty was up by 16.80 points or 0.18% to 9,520.90. 

The BSE Sensex touched a high and a low of 30965.45 and 30680.66, respectively and there were 14 stocks on gainers side as against 17 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were FMCG up by 2.24%, Consumer Durables up by 2.07%, Healthcare up by 1.47%, Basic Materials up by 0.59% and Power up by 0.56%, while Telecom down by 0.65%, Realty down by 0.51%, Energy down by 0.44%, Auto down by 0.32% and Oil & Gas down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.00%, Sun Pharma up by 2.97%, Tata Steel up by 1.80%, Cipla up by 1.76% and Dr. Reddy’s Lab up by 1.59%. On the flip side, Tata Motors - DVR down by 2.10%, Hero MotoCorp down by 1.25%, ICICI Bank down by 1.23%, HDFC down by 0.96% and Reliance Industries down by 0.91% were the top losers.

Meanwhile, with India’s biggest tax reform goods and services tax (GST) set to launch on July 1, the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the rollout of new tax regime will bring about significant gains to Indian economy and advantages for the stakeholders. FICCI also looks forward to working closely with the government to ensure successful implementation of GST.

The Industry body has clarified that GST will bring down the tax burden of taxpayers in understanding and complying with tax laws and help curb black money generation. Adding further, it also said that GST regime will prevent cascading effect of taxation since input tax credit (ITC) will be available across goods and services at each stage of the supply chain. It also noted that the harmonisation of the laws, procedures and rates of taxes enforced by the Centre and the states will bring transparency/uniformity in tax regime.

Moreover, the chamber has said that the establishment of GST Network automates the processing of tax related filings, enabling automation of processes like registration, returns, refunds, tax payments, etc. which is expected to reduce the interface between the taxpayer and the tax administration and will go a long way to reduce unwarranted litigation on indirect tax matters. Emphasizing that the GST will help curb the spread of the country's parallel economy, FICCI said that the framework of the tax structure, whereby input tax credit is available for the subsequent activity of manufacture or trading, serves as an incentive to be more tax compliant.

The CNX Nifty traded in a range of 9,535.80 and 9,448.75. There were 24 stocks in green as against 26 stocks in red on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Bank of Baroda up by 4.05%, ITC up by 3.66%, Sun Pharma up by 3.56%, Cipla up by 2.55% and Aurobindo Pharma up by 1.96%. On the flip side, Tata Motors - DVR down by 1.60%, Tech Mahindra down by 1.5%, Tata Power down by 1.29%, HDFC down by 1.24% and Indiabulls Housing Finance down by 1.22% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 1.09 points or 0.01% to 7,351.41, Germany’s DAX increased 26.64 points or 0.21% to 12,442.83 and France’s CAC increased 22.65 points or 0.44% to 5,177.00.

Asian equity markets ended mostly in red on Friday due to heavy selling pressure as broad declines on Wall Street and in Europe overnight overshadowed encouraging manufacturing data from China. Japanese shares hit two-week lows, with a stronger yen, weak overnight cues from Wall Street and mixed economic reports weighing on sentiment. While consumer price inflation rose for the fifth straight month in May, consumer spending remained tepid, the jobless rate ticked higher and industrial output slipped back into contraction, adding to underlying risks. However, Chinese shares bucked the weak trend to end a tad higher as official manufacturing and services sector data added to signs of a stabilizing economy. China's official manufacturing PMI rose to 51.7 in June from 51.2 in May, marking the quickest pace of expansion in three months. Non-manufacturing activity also expanded at a faster pace in June, with the PMI coming in at 54.9, up from 54.5 in May. Meanwhile, Indonesian markets remained closed today.