Benchmarks continue firm trade; Nifty holds 10,000 mark

Indian equity benchmarks continued their firm trade in morning session on account of buying in front line blue chip counters. The rupee opened almost flat against dollar as compared with 65.38 on Friday. Foreign Portfolio Investors (FPIs) pulled out more than Rs 650 crore from equities during this previous session, according to data available with depository NSDL. Traders were taking support after the GST Council on Friday announced a slew of decisions to reduce compliance burden, including the eventual setting up of an e-wallet for input tax credits for exporters, and the option for small businesses to file returns and pay taxes only once a quarter. The GST Council also reduced the tax rates on 27 items. Separately, India needs to grow at a faster pace, Finance Minister Arun Jaitley said, while asserting that there was public support for the government’s reform initiatives despite the difficulties arising from implementing GST, for instance. The country has to grow at a much higher rate than it had been growing in recent history. Jaitley added that Modi government’s initiatives like Swachh Bharat, Goods and Services Tax (GST) and demonetisation are having desired impact, with the latter two resulting in increasing tax compliance and squeezing quantum of cash in the economy. Traders also took note of Revenue Secretary Hasmukh Adhia’s statement that the government will clear pending GST refunds of exporters by November-end and over the next six months no tax will be levied on exports as the Council has decided to revert to the pre-GST era.

Investors took note that after a brief lull in the previous quarter, Nifty 50 companies are expected to report double-digit growth in profits with improved profitability in the September quarter, aided largely by a better showing by automobile players, oil marketing companies (OMCs), metal and mining companies and private sector lenders. On the other hand, sectors including capital goods, cement, construction, infrastructure, IT, and pharmaceuticals may continue to languish. Jewellery stocks were buzzing after the Government withdrew its GST notification on gems and jewellery. Permanent Account Number (PAN) card will no longer be mandatory on the purchase of jewellery for over Rs 50,000. Select Movies & Entertainment stocks were buzzing on report that the Indian film industry is expected to grow at 11.5% year-on-year, reaching total gross realization of Rs 23,800 crore ($3.7 billion) by 2020. At present, the film industry grosses a total revenue of Rs 13,800 crore ($2.1 billion), and it has grown at a CAGR (compound annual growth rate) of over 10% in the last couple of years.

Traders were seen piling up position in Consumer Durables, Industrials and FMCG stocks, while selling was witnessed in Energy, Utilities and Oil & Gas sectors stocks. In scrip specific development, Sun Pharma Advanced Research Company (SPARC) slipped as Baclofen GRS did not meet primary end point in placebo controlled studies. Bacoflen is a muscle relaxer used to treat symptoms caused by Multiple Sclerosis. Landmarc Leisure Corporation was trading in red after the markets regulator SEBI ordered forensic audit of the company after finding prima facie evidence of misuse of books of accounts by the firm.

On the global front, Asian markets were trading mixed, as investors in Asia digested the release of China Caixin services PMI. The Caixin services purchasing managers’ index showed non-manufacturing activity in China expanded at its slowest levels in almost two years in September. The Caixin/Markit PMI stood at 50.6 last month, compared to the 52.7 figure seen in August. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,900 and 10,000 levels respectively. The market breadth on BSE was positive in the ratio of 1556:742, while 79 scrips remained unchanged.

The BSE Sensex is currently trading at 31913.35, up by 99.13 points or 0.31% after trading in a range of 31781.75 and 31935.63. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.32%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.55%, Industrials up by 0.63%, FMCG up by 0.62%, Consumer Disc up by 0.61% and Basic Materials up by 0.59%, while Energy down by 0.34%, Utilities down by 0.31%, Oil & Gas down by 0.29%, Power down by 0.22% and PSU down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.86%, Tata Motors - DVR up by 1.46%, Cipla up by 1.27%, Tata Motors up by 1.27% and Coal India up by 1.18%.

On the flip side, Power Grid down by 1.59%, ONGC down by 0.92%, Bharti Airtel down by 0.73%, Reliance Industries down by 0.70% and Wipro down by 0.24% were the top losers.

Meanwhile, seeking big-ticket investment in the vast, rapidly growing energy market Prime Minister Narendra Modi is holding a high-profile meeting with CEOs of foreign and Indian oil companies, including Rosneft, Saudi Aramco, BP, Reliance Industries and Cairn India.

The government in the meeting will be represented by Dharmendra Pradhan, minister for petroleum and natural gas, Rajiv Kumar, vice-chairman of Niti Aayog, cabinet secretary PK Sinha and Niti Aayog CEO Amitabh Kant. Secretaries of key ministries will also be present to ensure all policy and tax issues are explained immediately to ensure a positive outcome. Veteran policymaker Vijay Kelkar, Daniel Yergin, vice-chairman IHS Mark, and David C Carroll, president International Gas Union, will also attend.

This will be PM’s second session with captains and experts of global oil industry, where the government's think-tank Niti Aayog is playing a key role. The PM had on January 5, 2016 held a session on increasing domestic production of oil and gas as well as ways to attract larger investments in the domestic oil industry.  India would require more investment in infrastructure with country’s energy demand expected to accelerate as the economy expands and more people will be having access to power, cooking gas and personal transport.

The CNX Nifty is currently trading at 10010.25, up by 30.55 points or 0.31% after trading in a range of 9959.45 and 10015.75. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 1.95%, IndusInd Bank up by 1.68%, Cipla up by 1.42%, Bharti Infratel up by 1.36% and Coal India up by 1.17%.

On the flip side, Power Grid down by 1.59%, ONGC down by 1.01%, Reliance Industries down by 0.72%, Bharti Airtel down by 0.68% and HCL Tech down by 0.65% were the top losers.

The Asian markets were trading mixed; Jakarta Composite increased 16.1 points or 0.27% to 5,921.48 and Shanghai Composite increased 39.07 points or 1.17% to 3,388.01.

On the other hand, Hang Seng decreased 77.79 points or 0.27% to 28,380.25 and FTSE Bursa Malaysia KLCI decreased 0.02 points to 1,763.98.

The markets in Japan, South Korea and Taiwan are closed on account of National Holiday.