Benchmarks trade in fine fettle on firm global cues

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Thursday, as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. Markets get major support from firm global cues with report that US President Donald Trump and congressional leaders agreed to raise the government debt limit until December, eliminating the risk of a government shutdown for now. Back on regional turf, traders also took some support with a private report stating that economic activity in the country lost some pace amid GST related disruptions but underlying growth momentum remains strong and the country may clock 6.7 percent growth this fiscal.

Export oriented stocks remained buzzing, as the Commerce Minister Suresh Prabhu has said his ministry is looking at certain measures to rev up country's exports in a “shortest possible time” and will also strive to address the issues facing exporters post GST. He added that exports to GDP (gross domestic product) ratio of India has to improve substantially as the outbound shipments have a great ability to generate economic activity. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,352 shares gaining and 521 shares declining, while a total of 88 shares were unchanged.

The BSE Sensex is currently trading at 31743.38, up by 81.41 points or 0.26% after trading in a range of 31724.47 and 31814.96. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.73%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Realty up by 0.74%, Consumer Discretionary Goods & Services up by 0.64%, FMCG up by 0.60%, Telecom up by 0.55% and Capital Goods was up by 0.52%, while Consumer Durables down by 0.13%, Oil & Gas down by 0.04% and Power was down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 1.15%, Mahindra & Mahindra up by 1.00%, Dr. Reddys Lab up by 0.95%, Hero MotoCorp up by 0.83% and Axis Bank up by 0.67%. On the flip side, Tata Motors - DVR down by 1.93%, Tata Motors down by 1.30%, NTPC down by 1.18%, Bajaj Auto down by 0.42% and HDFC down by 0.37% were the top losers.

Meanwhile, engineering exporters’ apex body, Engineering Export Promotion Council (EEPC) of India has requested the new Commerce and Industry Minister Suresh Prabhu, to intervene with the finance ministry and the Goods and Services Tax (GST) Council and get a relief in terms of release of at least 90% of GST refunds to exporters immediately after the shipping bills are filed with the authorities, if a complete GST exemption is not feasible.

EEPC India said that while the government has extended the dates for filing of July returns for GST to September 10, 25 and 30 and for August to October 5, 10 and 15, ironically it would mean blocking of the refunds for exporters, who are in any case hard pressed for cash and have been significantly disadvantaged by continuous rise in value of rupee against the US dollar.

Exporters’ apex body has also suggested that the verification and adjustment can be done later based on the filing by the exporters as per their respective GST filing and returns. This will help small and medium scale exporters to tide over the blockage of funds and allow them to pay the salaries and bonuses of their workers in the festival season. It also said the members have pointed out that they are in a desperate situation and hence government must intervene to avoid a mini social crisis.

As per the calculations based on the July engineering exports of $5.17 billion, or Rs 33,129 crore, the GST refunds of at least Rs 1,520 crore would be held up till the third week of October for July. Besides, EEPC India Chairman T S Bhasin has said that if the Integrated GST (IGST), paid by exporters, is added, the dues to the exporting community would be in excess of Rs 1700 crore for July itself. Such a dispensation would certainly add to their costs and make their exports that much uncompetitive. He also said exporters are facing extreme cash flow problem because of locking up of the GST refunds with the authorities.

The CNX Nifty is currently trading at 9945.00, up by 28.80 points or 0.29% after trading in a range of 9938.95 and 9964.85. There were 37 stocks advancing against 13 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Indiabulls Housing up by 3.77%, Eicher Motors up by 1.96%, Tech Mahindra up by 1.13%, Adani Ports up by 1.12% and Yes Bank up by 1.11%. On the flip side, Tata Motors - DVR down by 2.09%, BPCL down by 1.56%, NTPC down by 1.15%, Tata Motors down by 1.06% and Aurobindo Pharma down by 0.46% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.23 points or 0.18% to 1,775.71, Nikkei 225 rose 9.19 points or 0.05% to 19,367.16, KOSPI Index surged 25.54 points or 1.1% to 2,345.36 and Hang Seng was up by 31.5 points or 0.11% to 27,645.26.

On the flip side, Taiwan Weighted decreased 17.97 points or 0.17% to 10,529.89, Jakarta Composite slipped 8.43 points or 0.14% to 5,815.71 and Shanghai Composite was down by 3.6 points or 0.11% to 3,381.79.