Benchmarks continue firm trade; Nifty above 9,850 mark

Indian equity benchmarks continued their firm trade in the morning session on account of buying in frontline blue chip counters, as investors shrugged off geopolitical tensions a day after North Korea fired a missile. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net buyers in domestic equity markets on Tuesday and bought shares worth Rs 96.39 crore with gross purchases and gross sales of Rs 5998.13 crore and Rs 5901.74 crore, respectively. Traders took some encouragement with Finance Minister Arun Jaitley’s statement that Goods and Services Tax (GST) collections have exceeded estimates in the first month of the landmark levy’s rollout, despite a significant number of assessees not having filed returns yet. Jaitley added that the total collection under GST for July is pegged at Rs 92,283 crore. Extrapolating Budget targets, the central government’s July tax revenue should be Rs 48,000 crore and that of states Rs 43,000 crore, adding up to Rs 91,000 crore. Some support also came with NITI Aayog’s statement that enhancing access to low-cost capital to businesses could serve as an important vehicle for improving the business environment, especially in poor states like Bihar.  

Separately, Commerce Minister Nirmala Sitharaman said that exporters need help and hand holding as they face global headwinds and the government is looking at all options to support them, particularly small and medium players. The minister’s comments assume significance as India’s export growth slowed to eight-month low of 3.94 per cent in July, while the rupee is strengthening and interest rates not declining fast enough. Investors took note that the Reserve Bank of India (RBI) has directed banks to refer 50 dud accounts to bankruptcy court if they are unable to find a resolution in three months, in the second such list that the regulator has sent out in bid to clean up the bad corporate debt problem. The move will pinch banks even more as they make higher provisions on loans of companies referred to the insolvency process. The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. August 2017 series to next month i.e. September 2017 series. The near month July 2017 derivatives contracts will expire on Thursday i.e. August 31, 2017.

Traders were seen piling up position in Metal, Basic Materials and Oil & Gas sector stocks. In scrip specific development, Inox Wind was trading in green after closing a deal for developing a 100MW wind power project for Adani Green Energy, a part of the Adani group at Kutch in the state of Gujarat. Sugar stocks too were buzzing after the government imposed stock limits on sugar mills, a move aimed at keeping prices stable during the festive season when consumption increases. It also asked states and union territories to take action against onion traders who engage in speculation and hoarding.

On the global front, Asian markets were trading mostly in green, showing a rebound a day after a North Korean missile test over Japan. China’s state planning head said that the country can meet its 2017 economic growth targets but may struggle to meet its investment and foreign investment goals. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,600 and 9,850 levels respectively. The market breadth on BSE was positive in the ratio of 1669:407, while 81 scrips remained unchanged.

The BSE Sensex is currently trading at 31611.96, up by 223.57 points or 0.71% after trading in a range of 31533.02 and 31643.14. There were 29 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.24%, while Small cap index was up by 1.44%.

The top gaining sectoral indices on the BSE were Metal up by 2.11%, Basic Materials up by 1.65%, Oil & Gas up by 1.55%, Energy up by 1.33% and Realty up by 1.26%, while there were no losers on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 1.47%, Hero MotoCorp up by 1.25%, HDFC up by 1.20%, Bajaj Auto up by 1.19% and Maruti Suzuki up by 1.16%.

On the flip side, TCS down by 0.45% and Power Grid down by 0.44% were the top losers.

Meanwhile, showing the success of the Goods and Services Tax (GST) introduced on 1st of July, 2017, the GST collection for July exceeded Rs 91,000 crore target for central and state taxes. Finance Minister Arun Jaitley has said that the indirect tax regime has yielded higher than expected revenue in the first month of its operations, as a total of Rs 92,283 crore tax has come in from first filing under GST. He said that only 64.92 per cent of the eligible 59.57 lakh businesses have paid GST for the month of July and more are expected to pay.

He further said that if we exclude the taxpayers who have registered with the GSTN in August 2017 and the composition dealers, total number of tax payers who were required to file the returns for July 2017 is 59.57 lakhs, of which, as on 29th August, 2017 (10 a.m.), 38.38 lakh returns have been filed, which is 64.42% of the total number of returns, which are to be filed for the month of July 2017.

Detailing further the Finance Ministry statement said that the total CGST revenue is Rs 14,894 crore, SGST revenue is Rs 22,722 crore. Collections from Integrated GST is Rs 47,469 crore of which IGST from imports is Rs 20,964 crore. Compensation cess amounts to another Rs 7,198 crore of which Rs 599 crore is compensation cess from imports.

The final returns for month of July will be filed next month. Filing of GSTR-1 for the month of July is scheduled between September 1 and 5, followed by filing of GSTR- 2 between September 6 and 10 and GSTR-3 between September 11 and 15.

The CNX Nifty is currently trading at 9873.00, up by 76.95 points or 0.79% after trading in a range of 9850.80 and 9883.45. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Indian Oil up by 3.37%, Hindalco up by 3.28%, Ambuja Cement up by 2.04%, Vedanta up by 2.04% and Aurobindo Pharma up by 1.69%.

On the flip side, HCL Tech down by 0.83%, Tech Mahindra down by 0.69%, Zee Entertainment down by 0.46%, TCS down by 0.32% and Power Grid down by 0.30% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 1.58 points or 0.07% to 2,366.32, Shanghai Composite increased 3.43 points or 0.1% to 3,368.65, Taiwan Weighted increased 54.98 points or 0.52% to 10,551.55, Nikkei 225 increased 155.39 points or 0.8% to 19,517.94 and Hang Seng increased 233.86 points or 0.84% to 27,998.87.

On the other hand, Jakarta Composite decreased 3.72 points or 0.06% to 5,884.49 and FTSE Bursa Malaysia KLCI decreased 0.27 points or 0.02% to 1,760.87.