Benchmarks witness consolidation on Monday

Indian equity benchmarks witnessed consolidation on Monday amid volatility, as traders remained on sidelines ahead of GST Council meeting, slated later during the week which is expected to consider lowering of the 28 percent GST rate on certain common use items. After a cautious start markets traded choppy in first half, as sentiments remained dampened on foreign brokerage report which highlighting adverse macroeconomic impact of rise in crude oil prices, said every $10 per barrel rise in the price will worsen India’s fiscal balance by 0.1 percent and current account balance by 0.4 percent of GDP. At the same time, it also estimated that every $10/bbl rise in crude oil price would hit the central government’s fiscal balance by 0.1 percent of GDP. It also added that every $10/bbl rise in crude oil price would increases CPI inflation by 0.6-0.7 percentage points.

Markets gained momentum and entered into green terrain in second half of trade to hit all time record highs. Traders took some encouragement with report that government could consider a proposal to stagger deadlines for filing of monthly returns under the Goods and Services Tax for small and large firms. The move would ensure that the rush towards the last few days gets partly dissipated and leads to lower burden on the IT systems as well that often leads to large delays in uploading of returns and invoices. Some support also came with Prime Minister Narendra Modi’s statement that the recently introduced GST regime will further improve India’s ranking in the ease of doing business and pointed that the recent ranking did not take into account implementation of GST. However, profit booking which emerged in dying hour of trade mainly dragged key indices near neutral lines and domestic bourses ended flat.

Weak opening in European counters too dampened sentiments. CAC, DAX and FTSE were trading in red in early deals, as investors focus on earnings and monitor President Donald Trump's comments in Asia. Asian markets exhibited mixed trend on Monday. Chinese shares ended higher even as banking stocks fell after People's Bank of China Governor Zhou Xiaochuan spelled out his strategy to ward off systematic financial risks.

Back home, auto stocks remained in top gear after ICRA said that the domestic commercial vehicle (CV) sales are expected to grow by around 7 percent in the current fiscal on the back of pent-up demand post GST and replacement cycle in CVs driving the sales. The rating agency added that the industry will find its momentum back aided by increased thrust on infrastructure and rural sectors in the recent budget, potential implementation of fleet modernization and higher demand from consumption-driven sectors. PSU banking stocks were buzzing on report that the Finance Ministry may infuse about Rs 70,000 crore through recapitalization bonds in the NPA-hit public sector banks in the next four months. Food processing and related stocks remained in focus, as the Minister for Railways and Coal Piyush Goyal said that the categorisation of the food processing sector for bank credit should be reviewed as it could in turn help double farmers’ income. Meanwhile, shares of Reliance Nippon Asset Management Company (AMC) made a decent debut and went home with around 13% gains. The IPO got tremendous response and was oversubscribed by 81.54 times.

Finally, the BSE Sensex gained 45.63 points or 0.14% to 33,731.19, while the CNX Nifty was down by 0.70 points or 0.01% to 10,451.80.

The BSE Sensex touched a high and a low of 33,848.42 and 33,582.38, respectively and there were 15 stocks on gaining side as against 16 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.46%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 8.60%, Auto up by 1.16%, Consumer Discretionary Goods & Services up by 1.09%, IT up by 0.88% and Industrials was up by 0.68%, while Telecom down by 1.08%, Power down by 0.59%, Energy down by 0.48%, Capital Goods down by 0.38% and Utilities was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 4.07%, ONGC up by 3.81%, Tata Motors up by 3.28%, Mahindra & Mahindra up by 2.49% and Cipla up by 2.47%. On the flip side, Sun Pharma down by 1.96%, Bharti Airtel down by 1.91%, NTPC down by 1.81%, Lupin down by 1.39% and Larsen & Toubro down by 1.29% were the top losers.

Meanwhile, days after it gave India a 30 place jump in its 'ease of doing business' ranking among 190 countries, the World Bank in its latest report has said that the Goods and Services Tax (GST) regime and Narendra Modi-led government’s resolve to push reforms would catapult the country to become a high middle-income economy by the year 2047. The multilateral development bank also credited India’s extraordinary achievement of quadrupling of per capita income to reforms taken over past three decades.

Comparing the country’s achievement of moving into the top 100 in ease of doing business global rankings from its 130th position last year, World Bank Chief Executive Officer (CEO) Kristalina Georgieva has said that India has achieved remarkable overall success and a jump of this nature is very rare since the beginning of the survey 15 year ago. She said “I understand that in a cricket-loving nation hitting a century is a very important milestone.”  She noted that last week, India moved for the first time into the top 100 of World Bank’s Ease of Doing Business global rankings due to sustained business reforms over the past several years. She said “I have no doubt that when India hits another century, the century of independence in 2047, most people in India would be the part of global middle class. India will be a high middle income country.”

Lauding government’s efforts to carry forward reforms, including unification of indirect taxes, the World Bank CEO has said that the GST reform creates an incredible opportunity for India to grow through unified internal market. She also pointed out that there is visible impact of reforms on foreign investment and added that foreign direct investment (FDI) has doubled to $60 billion from $36 billion in 2013-14. Besides, she noted that investment in infrastructure building, investment in its people and strengthening of cooperative and competitive federalism are foundation for more progress in the future.

The CNX Nifty traded in a range of 10,490.45 and 10,413.75. There were 19 stocks in green as against 31 stocks in red on the index.

The top gainers on Nifty were ONGC up by 3.73%, Mahindra & Mahindra up by 2.99%, Bharti Infratel up by 2.47%, Tata Motors up by 2.28% and Wipro up by 2.19%. On the flip side, HPCL down by 2.67%, ZEE down by 2.00%, Yes Bank down by 1.98%, UPL down by 1.88% and Sun Pharma down by 1.82% were the top losers.

European markets were trading in red; Germany’s DAX decreased 22.22 points or 0.16% to 13,456.64, France’s CAC shed 10.05 points or 0.18% to 5,507.92 and UK’s FTSE 100 was down by 10.02 points or 0.13% to 7,550.33.

Asian equity markets made a mixed closing on Monday as US President Donald Trump kicked off his tour of Asia in Japan over the weekend with a tough rhetoric and an anti-corruption crackdown in Saudi Arabia resulted in the arrest of several Saudi princes and ministers, including prominent investor Prince Alwaleed Bin Talal. Chinese shares ended higher even as banking stocks fell after People's Bank of China Governor Zhou Xiaochuan spelled out his strategy to ward off systematic financial risks. Japanese shares ended on a flat note as trading resumed after a long holiday weekend. Meanwhile, Hong Kong shares ended lower ahead of Chinese current account, foreign-exchange reserves and consumer inflation data due this week.