Indian equities continue firm trade in noon session

Indian equity benchmarks extended early gains and continued firm trade in noon session, hovering near intra-day high level, on sustained buying by funds and retail investors after minutes from the Federal Reserve's last meeting showed a lack of consensus on the future pace of interest rate increases. Sentiments got some support with International Monetary Fund’s (IMF’s) report that India’s growth outlook has improved as the impact of last year’s demonetization exercise seems to be fading and recent key structural reforms continue to pay off. Further, the study done by ASSOCHAM-Ashvin Parekh Advisory Services showed that the industry is expected to contribute $280 billion to India’s GDP in eight to nine years due to a positive fallout of the Goods and Services Tax (GST) as structural changes in the ease of doing business will propel growth. Describing the GST, in the short-term, as a mini budget short of projection of estimated revenue, the study paper said most businesses would be able to get significantly more credits under the new indirect tax regime, leading to a benefit for most of them. Meanwhile, Finance Minister Arun Jaitley said that despite the anticipation of initial disruptions on account of the GST, the rollout of the new indirect tax regime from July 1 was smooth and without any significant glitches.

On the global front, Asian markets were trading mostly in red on Thursday, after minutes from the Federal Reserve's last meeting showed a lack of consensus on the future pace of US interest rate increases, while oil prices inched higher following a steep decline a day earlier. Japanese stocks edged lower as ongoing tensions around North Korea continued to sap risk appetite, while the retail sector underperformed on dismal earnings from convenience stores. Investors are also focused on major events this week such as US jobs data and the Group of 20 nations' meeting in Germany, where US President Donald Trump and other leaders are expected to discuss steps to rein in North Korea's weapons programme. The United States said it was ready to use force if needed to stop North Korea's nuclear missile programme but said it preferred global diplomatic action against Pyongyang. Meanwhile, US crude tumbled by as much as 5.4%, snapping an eight day winning streak, the longest rally in over five years, as rising OPEC exports and a stronger dollar turned sentiments more bearish.

Back home, stocks from Realty, FMCG and PSU counters were supporting the markets’ uptrend, while those from Consumer Durables, Utilities and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, Shriram EPC rallied after the company won a Rs 71-crore contract from the Arulmigu Dandayuthapani Temple, or Palani Temple, in Tamil Nadu to build a ropeway.

The market breadth remained optimistic, as there were 1576 shares on the gaining side against 777 shares on the losing side, while 108 shares remained unchanged.

The BSE Sensex is currently trading at 31406.31, up by 160.75 points or 0.51% after trading in a range of 31264.86 and 31428.03. There were 18 stocks advancing against 13 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 up by 0.81%.

The top gaining sectoral indices on the BSE were Realty up by 1.84%, FMCG up by 1.01%, PSU up by 0.81%, Industrials up by 0.64% and Consumer Disc up by 0.54%, while Consumer Durables down by 0.29%, Utilities down by 0.26%, Oil & Gas down by 0.20% and IT down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.58%, ITC up by 1.92%, Coal India up by 1.39%, Tata Motors up by 1.23% and HDFC up by 1.14%. On the flip side, Bajaj Auto down by 1.51%, ONGC down by 1.26%, NTPC down by 0.69%, Axis Bank down by 0.53% and Sun Pharma down by 0.45% were the top losers.

Meanwhile, expressing happiness over the smooth rollout of the recently launched Goods and Services Tax (GST), Finance Minister Arun Jaitley has said that although the government had factored in a huge amount of disruption, the switchover to GST has been smoother than anticipated and noted that implementation of new tax regime along with last year’s demonetization move would increase the tax base ratio over a period of time.

Jaitley further said that after these two big moves, the manner in which India has taken difficult decisions and implemented them have made reforms look easier, adding that the next one or two years will be the period of implementation for the country and net impact would be greater buoyancy in the tax collections. FM however expressed some concern too, saying that in the medium or long term, the direction of the country’s expenditure should be the main priority.

Further, while highlighting that the economy is becoming more competitive in many areas like infrastructure and aviation sector, finance minister said that the direction in which the economy is moving is not reversible.  He also said that India has potential to sustain a high level of growth over the next decade.

The CNX Nifty is currently trading at 9678.55, up by 40.95 points or 0.42% after trading in a range of 9639.95 and 9682.85. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.58%, ITC up by 1.93%, Indiabulls Housing up by 1.91%, Bank Of Baroda up by 1.87% and Tata Motors up by 1.18%. On the flip side, Bajaj Auto down by 1.49%, ONGC down by 1.47%, GAIL India down by 1.07%, NTPC down by 0.88% and Bharti Infratel down by 0.71% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 0.44%, Hang Seng shed 0.04%, Taiwan Weighted decreased 0.35% and FTSE Bursa Malaysia KLCI was down by 0.12%.On the flip side, Shanghai Composite rose 0.08%, KOSPI Index increased by 0.05% and Jakarta Composite was up by 0.3%.