Benchmarks trade flat on penultimate session of F&O expiry

Indian equity benchmarks made a positive start but turned flat with traders staying away from taking risky bets on penultimate session of F&O series expiry. Some concern also came with a private report, stating that both goods and services tax (GST) collections as well as its compliance in the first four months since the rollout of the new tax regime remain well be below the target, and the situation is unlikely to improve in the near- term. Though, markets managed to keep their head above water with tracers taking some encouragement with Prime Minister Narendra Modi’s statement who called upon entrepreneurs from across the globe to make India their base for the world. He said that India has emerged as one of the fastest-growing economies and a happening place with immense opportunities in a number of areas.

On the global front, Asian markets were trading mostly in red at this point of time after North Korea has fired an intercontinental ballistic missile which flew about 1,000 km before splashing down in the Sea of Japan. This is the first such launch in two months which comes just a week after the US slapped fresh sanctions on the reclusive nation and declared it a state sponsor of terrorism. The US markets ended higher in the last session and the major averages climbed to new record closing highs, due to news the Republican tax reform bill took another key step forward, as the legislation was approved by the Senate Budget Committee.

Back home, Minister for Petroleum and Natural Gas, Dharmendra Pradhan has made a strong case for inclusion of natural gas in the Goods and Services Tax, saying that if polluting coal can be included, then the environment-friendly fuel certainly deserves a place in the new regime. Meanwhile, stocks related to insurance sector remained buzzing, as the global rating agency Moody's in its latest report has said that non-life insurance sector is likely to maintain its double digit growth over the next three to four years, aided by a higher economic expansion and increased household spending.

The BSE Sensex is currently trading at 33638.09, up by 19.50 points or 0.06% after trading in a range of 33613.00 and 33690.92. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.20%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 1.36%, Healthcare up by 0.48%, Energy up by 0.45%, FMCG up by 0.40% and Capital Goods up by 0.39%, while Telecom down by 0.19% and Bankex was down by 0.14% were the only losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.69%, Dr. Reddys Lab up by 1.30%, ONGC up by 0.83%, ITC up by 0.66% and Infosys up by 0.56%. On the flip side, HDFC down by 1.02%, Axis Bank down by 1.01%, Adani Ports down by 0.34%, Bharti Airtel down by 0.29% and HDFC Bank down by 0.24% were the top losers.

Meanwhile, making a strong case for the inclusion of natural gas under the new indirect tax regime, Minister for Petroleum and Natural Gas, Dharmendra Pradhan has said that if polluting coal can be included under GST, then the environment-friendly fuel certainly deserves a place in the new regime. He added that natural gas is a cleaner fuel than coal. The minister’s pitch came more than four months after the launch of the Goods and Services Tax (GST), though his ministry had previously written to the Finance Ministry to consider including natural gas in the GST.

Currently, crude oil, petrol, diesel, aviation turbine fuel (ATF) or jet fuel and natural gas are outside the purview of  the GST, which has amalgamated over a dozen indirect taxes including excise duty, service tax and VAT since the new tax regime kicked in from July 1. Hence, while various goods and services procured by the oil and gas industry are subjected to GST, the sale and supply of oil, gas and petroleum products continue to attract earlier taxes like excise duty and VAT. Unlike other industries which can take credit for any tax paid towards the furtherance of business, no credits on input GST is available to the oil and gas industry leading to the huge additional indirect tax burden.

Petroleum Minister also said the country needs an overarching policy covering various energy verticals in order to achieve self sufficiency and security in this critical sector. Defending the government's target of doubling Indian oil refinery capacity to 600 million tonnes, he said that all major economies needed multiple sources of energy for growth. Earlier, industry body Ficci too has pitched for the inclusion of natural gas in the new indirect tax regime so as to help producers contain cost and aid in moving towards a gas-based economy.

The CNX Nifty is currently trading at 10370.35, up by 0.10 points after trading in a range of 10366.20 and 10391.90. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.82%, Dr. Reddys Lab up by 1.13%, ONGC up by 0.88%, GAIL India up by 0.67% and Ambuja Cement up by 0.59%. On the flip side, Axis Bank down by 1.26%, HDFC down by 1.23%, Tech Mahindra down by 0.87%, UPL down by 0.80% and BPCL down by 0.63% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 106.03 points or 0.36% to 29,574.82, Jakarta Composite shed 16.49 points or 0.27% to 6,054.22, Shanghai Composite declined 16.19 points or 0.49% to 3,317.47 and KOSPI Index was down by 0.45 points or 0.02% to 2,513.74.

On the flip side, FTSE Bursa Malaysia KLCI increased 2.79 points or 0.16% to 1,717.21, Taiwan Weighted added 13.36 points or 0.12% to 10,720.43 and Nikkei 225 was up by 61.9 points or 0.28% to 22,548.14.