Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended the session with gains of around seven tenth of a percent. The markets held on to their initial gains, with Nifty closing above 10,000 mark for the first time since August 7. Global investors were relieved from the fact that North Korea did not indulge in any fresh provocative move that would flare up geopolitical tensions. The equity benchmarks made a gap-up opening and traded in fine fettle in early deals as traders reacted positively to the outcome of the crucial meeting of the Goods and Services Tax (GST) Council that took place on Saturday, where the council cut GST rate for over 40 items of mass consumption. Meanwhile, welcoming the decision of the GST Council of reducing the rate on supply of various scrips from 12 per cent to 5 per cent, the Federation of Indian Export Organizations (FIEO) said the move will give a boost to the exports sector. Some support also came on foreign brokerage firm’s report that India’s trade deficit is expected to improve in August to about $10.3 billion from $11.5 billion in July, largely on moderation in export as well as import growth. According to the global financial services major, the moderation, on a year-on-year basis, is likely owing to higher oil prices and unfavourable base effects. It estimates a moderation of export growth to 3.4% year-on-year in August from 3.9% in July and imports of 11.3% in August from 15.4% in July.

On the global front, Asian markets closed mostly in green. China’s producer price inflation accelerated more than expected to a four-month high in August, fueled by strong gains in raw materials prices and pointing to strong, sustained growth for both factory profits and the economy. The European markets were trading in green as market recovered from the European Central Bank’s most recent policy statement and as investors continued to track the advancement of Hurricane Irma in the US. ECB Executive Board member Benoit Coeure said that European Central Bank policy will remain accommodative for longer than in previous cases of demand shock, likely limiting the negative impact of the euro’s appreciation.

Back home, majority of auto companies closed in green as domestic car companies sounded relieved after the GST Council on Saturday raised the vehicle cess by less than the maximum possible, although luxury automakers were more circumspect in their assessment of the new rates.  Hotel stocks were buzzing taking cues from a survey that the domestic hotel industry is expected to see room revenue rising at about 11-13 per cent CAGR over the next five years, mainly on the back of economic growth. According to the study by CARE Ratings, the industry is expected to register an overall healthy increase in revenue on back of economic growth and consistently growing middle-class along with rising disposable income.

The BSE Sensex ended at 31889.12, up by 201.60 points or 0.64% after trading in a range of 31797.89 and 31952.87. There were 19 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.78%, while Small cap index was up by 0.76%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 2.63%, Power up by 1.95%, Utilities up by 1.91%, Industrials up by 1.53% and Bankex up by 1.15%, while Telecom down by 0.34%, TECK down by 0.07%, IT down by 0.06% and Healthcare down by 0.05% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 3.81%, Asian Paints up by 2.78%, Tata Motors - DVR up by 2.60%, Maruti Suzuki up by 2.41% and HDFC Bank up by 1.85%. (Provisional)

On the flip side, Mahindra & Mahindra down by 0.92%, Bharti Airtel down by 0.67%, Sun Pharma down by 0.58%, SBI down by 0.55% and Infosys down by 0.52% were the top losers. (Provisional)

Meanwhile, following the decision taken by Goods and Services Tax (GST) Council to increase the cess for some car segments, the Central Board of Excise and Customs (CBEC) has said that the cess hike in cars will come into effect on September 11, 2017.

GST Council in its 21st meeting was held on September 9, decided to increase the cess on mid-sized cars by 2 percent, taking the effective GST rate to 45 percent. Also, cess on large cars has been hiked by 5 percent, taking the total GST incidence to 48 percent while that of SUVs by 7 percent to 50 percent. However, maintaining status quo, the GST Council has not hiked cess on small petrol and diesel cars, hybrid cars and those carrying up to 13 passengers. The government’s this move is aimed to remove anomalies under the new tax regime.

Earlier, the Union Cabinet had approved the promulgation of an Ordinance that allowed the GST Council to hike the maximum rate of compensation cess on large and luxury vehicles to 25 per cent from the current cap of 15 per cent. Besides, the government also decided to levy cess on those cars which attract the highest tax slab of 28 percent and on top of that, under the GST regime. Car prices had dropped by up to Rs 3 lakh as the tax rates fixed under the GST, which came into effect from July 1, were lower than the combined central and state taxes in pre-GST days.

The CNX Nifty ended at 10007.55, up by 72.75 points or 0.73% after trading in a range of 9968.80 and 10028.65. There were 33 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were IndusInd Bank up by 5.47%, Tata Power up by 5.06%, GAIL India up by 3.80%, Larsen & Toubro up by 3.72% and Yes Bank up by 3.13%. (Provisional)

On the flip side, Indiabulls Housing down by 1.01%, Mahindra & Mahindra down by 0.99%, Sun Pharma down by 0.71%, TCS down by 0.63% and Infosys down by 0.56% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 51.23 points or 0.69% to 7,428.83, Germany’s DAX increased 137.43 points or 1.12% to 12,441.41 and France’s CAC increased 62.85 points or 1.23% to 5,176.34.

Asian equity markets ended mostly higher on Monday amid improved risk appetite as fears about hurricane Irma have waned and North Korea refrained from launching more missiles at the weekend despite speculation that it would do so. The dollar clawed back losses as the United Nations prepared to vote on a new round of sanctions against North Korea. Gold retreated from a one-year high while oil edged higher after falling more than 3 percent on Friday. Oil was helped by reports that the production cut deal that OPEC, Russia, and several other producers agreed to late last year could be extended beyond March 2018. Japanese shares closed at their highest level in more than a week as the dollar recovered from a 10-month trough against the yen and data showed Japanese core machinery orders rose in July at the fastest pace since January 2016. Meanwhile, Chinese stocks closed on a steady note after August inflation data released over the weekend came in better than expected, mainly on account of higher material costs. The offshore Yuan declined after China's central bank reportedly scrapped reserve requirements on the trading of foreign-exchange forwards.