Post Session: Quick Review

Indian equity benchmarks traded on a lackluster note throughout the day and ended the session with gains of over two tenth of a percent. Investors remained on sidelines in the absence of clear triggers even though some amount of buying was seen across select sectors. The equity benchmarks pared some gains after a gap up opening and traded in green in early deals as traders took support with report that Foreign Direct Investment (FDI) into the country grew by 37% to $10.4 billion during the first quarter of the current fiscal. According to DIPP, India had received $7.59 billion FDI during April-June 2016-17. The main sectors which attracted the highest foreign inflows include services, telecom, trading, computer hardware and software and automobile. Bulk of the FDI came in from Singapore, Mauritius, the Netherlands and Japan. Some support also came with foreign brokerage firm’s report that India is expected to see a modest recovery in GDP growth at 6.6 per cent for the April-June quarter as compared to 6.1 per cent in January-March, which was affected by demonetization. The report said while consumption and services growth indicators (especially transportation) bounced back in July, industry, investment and external sector data remain weak, or have slowed at the margin.

Meanwhile, a report highlighted that as much as Rs 42,000 crore has already come in as taxes so far in the first monthly filing under the new Goods and Services Tax (GST) regime and the revenues are expected to swell further as the filing cycle closes later this week. So far, 10 lakh tax payers have filed returns and another 20 lakh have logged in and saved return forms. Investors also took note of foreign brokerage firm’s report that retail inflation is likely to stay well within the RBI’s 2-6% mandate in the coming months and accordingly, the central bank is expected to cut policy rates by 25 bps on December 6. The report enlightened that inflationary pressures are expected to remain contained by good rains, low growth and subdued imported inflation amid decrease in global commodity prices.

On the global front, Asian markets closed mostly in green, with geopolitical concerns in the background. Malaysia’s consumer price index likely rose 3.3 percent in July from a year earlier, a poll showed, slowing in pace for the fourth month in a row. Malaysia’s central bank has set a 2017 inflation target of 3-4 percent. European markets were trading in green as investors awaited the annual central banking conference in Jackson Hole later this week. Morale among German investors deteriorated for a third consecutive month in August.

Back home, Westlife Development closed in green amid reports that the company was the front-runner to get the rights to operate the US chain’s restaurants in the North and East. Westlife Development through its unit Hardcastle Restaurants own master franchisee rights of McDonald’s in west and south India.

The BSE Sensex ended at 31333.65, up by 74.80 points or 0.24% after trading in a range of 31241.50 and 31484.28. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.25%, while Small cap index was down by 0.37%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.60%, Energy up by 0.84%, Healthcare up by 0.79%, Telecom up by 0.64% and PSU up by 0.51%, while Power down by 1.12%, Utilities down by 0.76%, Realty down by 0.74%, Auto down by 0.58% and Consumer Disc down by 0.56% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.49%, Dr. Reddy’s Lab up by 2.38%, Lupin up by 2.01%, Bharti Airtel up by 1.43% and ONGC up by 1.27%. (Provisional)

On the flip side, NTPC down by 2.59%, Hero MotoCorp down by 1.51%, Bajaj Auto down by 1.35%, TCS down by 0.85% and Larsen & Toubro down by 0.56% were the top losers. (Provisional)

Meanwhile, clarifying the Goods and Services tax (GST) related issues of gems and jewellery sector, Central Board of Excise and Customs (CBEC) has said that the banks will have to pay additional 3 per cent Integrated GST (IGST) on imports of gold and precious metals along with the basic customs duty, which can be claimed as input tax credit. Previously banks were not paying any VAT (value-added tax) on an import of precious metals.

The apex body also said that the overseas entities would not be liable to pay IGST on such imports since they are not effecting the import. CBEC also clarified that the rate of 3 per cent is payable on the total transaction value of jewellery, whether the making charge is shown separately or not. 

Currently, basic customs duty on gold import is 10 percent. The government has subsumed countervailing duty (CVD) of 12.5 per cent on it under new tax regime, hence it has imposed 3 per cent of GST rate on gold imports in the form of IGST with effect from July 1.

The CNX Nifty ended at 9775.10, up by 20.75 points or 0.21% after trading in a range of 9752.60 and 9828.45. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 2.79%, Indian Oil Corporation up by 2.59%, Sun Pharma up by 2.58%, Dr. Reddy’s Lab up by 2.47% and Hindalco up by 2.09%. (Provisional)

On the flip side, NTPC down by 2.76%, Hero MotoCorp down by 1.97%, Eicher Motors down by 1.85%, Indiabulls Housing down by 1.73% and Bank of Baroda down by 1.69% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 48.31 points or 0.66% to 7,367.19, Germany’s DAX increased 78.79 points or 0.65% to 12,144.78 and France’s CAC increased 24.7 points or 0.49% to 5,112.29.

Asian equity markets closed mostly higher on Tuesday, although gains remained modest ahead of the upcoming Jackson Hole central banking conference beginning on Thursday, with markets awaiting speeches by Fed chair Janet Yellen and Mario Draghi. Chinese shares ended higher as a unit of China Unicom surged by the daily limit for a second day and as financial and materials firms also experienced strong gains. Shares in the China Unicom unit have risen following a statement from the China Securities Regulatory Commission on Sunday that it would treat China Unicom’s $11.7 billion ownership reform plan ‘as an exceptional case’, granting it approval. Meanwhile, Japanese shares ended lower even as the yen weakened to snap four days of gains.