Benchmarks trade in fine fettle on sanguine global cues

Indian equity benchmarks have made a gap-up opening and are trading in fine fettle in early deals with frontline gauges recapturing their crucial 10,350 (Nifty) and 33,300 (Sensex) levels supported by sanguine global cues. The traders are eyeing on Goods and Services Tax (GST) Council meeting starting in Guwahati today. GST Council is likely to slash the indirect tax rates on as many as 165 items at its meeting in Guwahati, which begins later today. At present, these 165 items attract 28% tax, which could be moved to the 18% category. Meanwhile, Mutual fund (MF) equity folios are at an all-time high of 46.63 million, with 7.6 million additions this year till now. The earlier peak, of 41.1 million, was in 2009. The equity segment is dominated by individual and non-wealthy investors, termed retail in sector parlance. It now accounts for three-fourth of all folios.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time underpinned by a solid earnings season and modest gains in U.S. shares overnight. The Japanese market is once again leading the pack with gain of around two percent as the yen was hovering near its lowest since March. The US markets despite another lackluster day of trade, managed to move modestly higher in the last session and the major averages reached new record closing highs.

Back home, realty and power sector stocks remained buzzing in early deals on report that in a significant widening of the tax base of the Goods and Services Tax, the Centre and States will discuss including electricity and real estate within the ambit of the indirect levy. The power sector stocks additionally in focus on reports that thermal power plants are facing severe coal shortage and are running at less than half-a-day’s stocks.

The BSE Sensex is currently trading at 33363.13, up by 144.32 points or 0.43% after trading in a range of 33339.90 and 33463.80. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.92%, while Small cap index was up by 1.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.57%, Telecom up by 1.12%, Basic Materials up by 1.07%, Energy up by 0.92% and Oil & Gas up by 0.88%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Hindustan Unilever up by 2.34%, SBI up by 2.13%, Tata Motors up by 1.73%, Tata Steel up by 1.44% and Tata Motors - DVR up by 1.12%. On the flip side, HDFC down by 1.19%, Power Grid Corporation down by 1.10%, Coal India down by 0.77%, Cipla down by 0.15% and ITC down by 0.13% were the top losers.

Meanwhile, Grant Thornton in its latest International Business Report (IBR), a quarterly global business survey, has said that India slipped to the 7th position in the September quarter from the 2nd spot in the previous three months in its ‘business optimism index’, showing clear signs of lag in the economy. According to the survey report, Indonesia is at the top, followed by Finland (2nd), the Netherlands (3rd), Philippines (4th), Austria (5th) and Nigeria (6th).

According to the report, Indian businesses have expressed low confidence over revenue expectations in the next 12 months. They also saw a drastic fall in confidence for profitability with 54 percent showing optimism as against 69 percent in the last quarter. Other parameters like expectations of increase in selling prices and exports have also suffered a slight fall in optimism in the quarter. However, Indian businesses remained optimistic about increase in employment as 54 percent respondents expressed the need to increase hiring in the next 12 months, a three- point rise from June quarter. Other areas where the optimism remained intact were investment in plant and machinery and Research & Development (R&D).

The report further stated that India tops the chart in citing regulations and red tape and lack of ICT infrastructure as the biggest growth constraints with 69 percent and 46 percent voting for it respectively. Indian businesses also identified shortage of finance and lack of skilled workforce as pain points of India Inc taking the 2nd and the 3rd spot respectively. But, the Government actions and reforms coupled with the significant jump in ‘Ease of Doing Business Rankings’ should bring back optimism in Indian Business in the next few quarters.

The CNX Nifty is currently trading at 10350.50, up by 47.35 points or 0.46% after trading in a range of 10344.35 and 10368.45. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.59%, Indiabulls Housing up by 2.35%, UPL up by 2.32%, SBI up by 2.25% and HPCL up by 1.84%. On the flip side, Zee Entertainment down by 1.36%, HDFC down by 1.29%, Coal India down by 1.01%, Power Grid Corporation down by 0.96% and GAIL India down by 0.62% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 0.86 points or 0.03% to 3,416.32, FTSE Bursa Malaysia KLCI gained 3.56 points or 0.2% to 1,747.76, KOSPI Index increased 4.35 points or 0.17% to 2,556.75, Hang Seng surged 262.62 points or 0.91% to 29,170.22 and Nikkei 225 was up by 413.67 points or 1.81% to 23,327.49.

On the flip side, Taiwan Weighted decreased 19.47 points or 0.18% to 10,799.52 and Jakarta Composite was down by 3.69 points or 0.06% to 6,045.70.