Markets continue to trade with modest gains

Indian equity benchmarks continued to trade with modest gains in late morning session, with Sensex gaining over 50 points and Nifty trading above 9,800 level. Investors remained optimistic with Revenue Secretary Hasmukh Adhia’s statement that the Goods and Services Tax (GST) will help bring down the inflation by one to two percent by the end of this year. He also said that the government’s objective is to ensure that inflation does not increase, and added that the government has tried to keep items frequently used by the consumers under the lower tax bracket. Besides, buying in Oil & Gas, Energy and PSU stocks, also kept the markets higher. However, some anxiety spread with the Crisil’s latest report that the sharp appreciation in the rupee against the dollar in recent months is likely to have dented the first-quarter (current fiscal) profitability of exporters that source locally and have limited pricing power and also due to index of industrial production (IIP) data for May and CPI inflation for June, to be released after market close. Meanwhile, the finance ministry is gearing up to introduce a host of Bills, including the Banking Regulation (Amendment) Bill, repeal of State Bank of India (Subsidiary Banks) Act, 1959, among others, in the upcoming Monsoon Session.

On the global front, Asian markets were trading mixed as investors eyed U.S. political risks and cues about the direction of monetary policy from the Federal Reserve chair. Back home, in scrip specific development, South Indian Bank edged higher after the bank received its shareholders’ approval to raise Rs 500 crore debt on private placement basis. The company’s members approved the same at the 89th Annual General Meeting with requisite majority.

The BSE Sensex is currently trading at 31806.64, up by 59.55 points or 0.19% after trading in a range of 31755.32 and 31865.69. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.43%, Energy up by 1.19%, PSU up by 0.80%, Utilities up by 0.56% and Telecom up by 0.51%, while IT down by 0.16% and Healthcare down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.65%, Hindustan Unilever up by 2.08%, Tata Motors - DVR up by 1.10%, Reliance Industries up by 1.07% and Tata Motors up by 1.02%. On the flip side, Sun Pharma Inds. down by 0.57%, TCS down by 0.56%, Dr. Reddy’s Lab down by 0.49%, Kotak Mahindra Bank down by 0.39% and Axis Bank down by 0.30% were the top losers.

Meanwhile, Revenue Secretary Hasmukh Adhia has expressed his hopes that the ‘game-changing’ goods and services tax (GST) regime will help lower inflation by 1-2 percent by the end of financial year 2018, and it will also create buoyancy in the economy through better compliance and ease of doing business.

Revenue Secretary further stated that the primary objective of the government is to keep the inflation low and added that the government has tried to keep items for common man use under the lower tax bracket. Under the GST, he noted that rates on items have been fixed in such a manner that it does not affect any section of the society adversely. He also predicted that the new tax regime will give a push to country’s exports and Make In India initiative in the long term.

Talking about tax collection, Adhia said that there will be some losses in tax collection in short term, but in the long term the revenue collection will go up as tax evasion is not possible under the GST regime. He also said that the government is organising master classes on GST to educate the people about various aspects of the new tax regime.

The CNX Nifty is currently trading at 9807.30, up by 21.25 points or 0.22% after trading in a range of 9791.20 and 9823.00. There were 33 stocks advancing against 17 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were ONGC up by 2.37%, Hindustan Unilever up by 2.36%, Indian Oil Corp. up by 2.15%, ACC up by 1.81% and Tata Motors - DVR up by 1.34%. On the flip side, Aurobindo Pharma down by 0.92%, Bank of Baroda down by 0.80%, TCS down by 0.71%, Sun Pharma Inds. down by 0.60% and Dr. Reddy’s Lab down by 0.41% were the top losers.

Asian markets were trading mixed; Taiwan Weighted increased 10.47 points or 0.1% to 10,426.04, Jakarta Composite increased 22.74 points or 0.39% to 5,796.07 and Hang Seng increased 192 points or 0.74% to 26,069.64. On the flip side, Nikkei 225 decreased 96.72 points or 0.48% to 20,098.76, Shanghai Composite decreased 12 points or 0.37% to 3,191.04, KOSPI Index decreased 2.67 points or 0.11% to 2,393.33 and FTSE Bursa Malaysia KLCI decreased 1.38 points or 0.08% to 1,753.65.