Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals on Tuesday, following sanguine global cues. Sentiments remained upbeat with international rating agency Moody’s report which expecting growth to revive next year, has said a 7.6 per cent GDP expansion can result in corporates reporting a pre-tax profit growth of 5-6 per cent over the next 12-18 months. The rating agency over the weekend had revised upwards sovereign ratings to Baa2 after almost 14 years. According to the rating agency, growth will “rebound strongly in 2018 because the supply chain disruptions of 2017 will end soon”. Traders also took some encouragement with report that investors pumped over Rs 51,000 crore into various mutual fund schemes in October after pulling out more than Rs 16,000 crore in the preceding month.

Global cues remained supportive with most of the Asian counters trading n green at this point of time led by the Japanese market which is up by around a percent in early deals, as traders put on hold concerns about US tax reforms and European political issues. The US markets managed a modestly higher closing in the last session, though the buying interest was somewhat subdued, limiting the upside for the major averages.

Back home, chief economic adviser Arvind Subramanian has hinted that the government may combine the 12 per cent and 18 per cent slabs under the goods and services tax (GST) into one in the near future and reserve the 28 per cent rate only for demerit goods. Shares of logistics companies remained on buyers’ radar after the government has given infrastructure status to logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments.

The BSE Sensex is currently trading at 33481.63, up by 121.73 points or 0.36% after trading in a range of 33437.61 and 33515.45. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.41%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.88%, Telecom up by 1.24%, Energy up by 1.06%, Realty up by 0.71% and Metal up by 0.70%, while Capital Goods was down by 0.10%, the sole losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.10%, Reliance Industries up by 1.91%, Tata Steel up by 1.86%, NTPC up by 1.58% and Cipla up by 1.43%. On the flip side, Power Grid down by 1.05%, Coal India down by 0.81%, Axis Bank down by 0.74%, ONGC down by 0.64% and Larsen & Toubro down by 0.61% were the top losers.

Meanwhile, with an aim to further boost India’s trade, the government has given infrastructure status to logistics sector, covering cold chain and warehousing facilities. For these segments, the move is likely to attract more funding at competitive rates. Amending the existing framework, a notification issued by the Department of Economic Affairs (DEA), under the finance ministry, has widened the category of infrastructure sub-sectors to ‘transport and logistics’ from the earlier sub-head of ‘transport’. The definition of logistics includes industrial parks, warehouses, cold storages and transportation.

The government has been working on ways to attract more investments into transport and logistics as part of efforts to bolster infrastructure development in the country. Having the infrastructure status would help the logistics sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters. In India, logistics costs of exports are very high and because of that, Indian goods are less competitive in global markets.

According to the notification, logistics infrastructure includes ‘Multimodal Logistics Park comprising Inland Container Depot (ICD) with minimum investment of Rs 50 crore and minimum area of 10 acre’. Further, a cold chain facility having an investment of at least Rs 15 crore as well as warehousing facility with investment of minimum Rs 25 crore would come under logistics infrastructure. In both cases, the facilities should also have a minimum required area. As part of the changes in the classification, the DEA has updated the 'Harmonised Master List of Infrastructure Sub-sectors'.

Besides transport and logistics, the list comprises energy, water and sanitation, communication, social and commercial infrastructure. Roads and bridges, ports, shipyards, inland waterways, airport, railway track, tunnels, viaducts, terminal infrastructure including stations and adjoining commercial infrastructure are all part of the transport and logistics classification. Urban public transport and logistics infrastructure are also part of it.

The CNX Nifty is currently trading at 10335.35, up by 36.60 points or 0.36% after trading in a range of 10323.75 and 10340.25. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.34%, Bharti Airtel up by 2.27%, Tata Steel up by 1.69%, Reliance Industries up by 1.63% and NTPC up by 1.55%. On the flip side, Power Grid down by 1.03%, Coal India down by 0.97%, Axis Bank down by 0.86%, Larsen & Toubro down by 0.78% and ONGC down by 0.69% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI gained 1.79 points or 0.1% to 1,720.15, KOSPI Index rose 3.21 points or 0.13% to 2,530.88, Shanghai Composite jumped 13.43 points or 0.4% to 3,405.83, Taiwan Weighted surged 103.83 points or 0.97% to 10,768.38, Nikkei 225 added 213.26 points or 0.96% to 22,475.02 and Hang Seng was up by 359.49 points or 1.23% to 29,619.80.

On the flip side, Jakarta Composite was down by 21.61 points or 0.36% to 6,031.67.