Benchmarks continue firm trade; FMCG, Realty lead

Indian equity benchmarks continued their trade in green in the morning session on account of buying in frontline blue chip counters. The rupee opened higher against the dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in secondary markets on Friday and sold shares worth Rs 1,011.39 crore with gross purchases and gross sales stood at Rs 4,503.01 crore and Rs 5,514.40 crore, respectively. Sentiments remained up-beat as companies in Indian are optimistic that the country’s economic growth will gain traction during the third quarter this fiscal. The CII Business Confidence index (BCI) has climbed up to the level of 59.7 during October-December 2017 compared to 58.3 in the previous quarter, reflecting an improvement in perception regarding overall economic conditions amidst indications of a normalization in business situation post the recent disruptions like GST. Separately, the Central Board of Direct Taxes highlighted that the provisional figures of Direct Tax collections up to November, 2017 show that net collections are at Rs 4.8 lakh crore, which is 14.4% higher than the net collections for the corresponding period of last year. The net direct tax collections represent 49% of the total Budget Estimates of direct taxes for 2017-18 (Rs 9.8 lakh crore). The gross collections (before adjusting for refunds) have increased by 10.7% to Rs 5.82 lakh crore during April-November, 2017.

Meanwhile, investors took note of Union Finance Minister Arun Jaitley’s statement that Indian economy is set for a higher growth trajectory on the back of a slew of structural reforms. Demonetization and GST were carried out keeping in mind their long-term benefits to the economy. He said the NDA government would now focus on large-scale investment in the infrastructure sector and rural areas. Separately, prime minister’s economic advisory panel member Rathin Roy expressed hope that the forthcoming budget will not be a populist and will reflect the commitment of the government to improve quality of expenditure. Aviation stocks were buzzing in today’s trade on report that the outlook for the fastest growing Indian aviation market is very good but infrastructure and taxation issues could be detrimental for its growth. Exclusion of airport fee and charges levied on ticket from the transaction value for GST purpose are among the issues being flagged by the IATA.

Traders were seen piling up position in FMCG, Realty and Consumer Disc stocks, while selling was witnessed in Utilities and Metal sector stocks. In scrip specific development, Max India was trading in red as the Delhi government on Friday cancelled the licence of the company. Listed Max India is the holding company for Max Healthcare. The decision came nearly a week after one of the premature twins born on November 30 and declared dead was found alive by the parents while being taken for last rites. IL&FS Engineering and Construction Company is locked at upper circuit limit on receiving Fax of Acceptance (FOA) from Gas Authority of India (GAIL) for pipeline laying contract. The total value of the contract is Rs 215.79 crore (excluding GST) and is to be mechanically completed in 15 months from date of FOA and additional 2 month for pre-commissioning and commissioning.

On the global front, Asian markets were trading in green. China’s producer price inflation slowed to a four-month low in November as factory activity softened due to the government’s ongoing efforts to curb pollution, cooling demand from factories for raw materials. Producer prices rose 5.8% from a year earlier. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,300 and 10,300 levels respectively. The market breadth on BSE was positive in the ratio of 1401:910, while 124scrips remained unchanged.

The BSE Sensex is currently trading at 33391.23, up by 140.93 points or 0.42% after trading in a range of 33313.17 and 33450.31. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were FMCG up by 0.85%, Realty up by 0.79%, Consumer Disc up by 0.71%, Auto up by 0.68% and Healthcare up by 0.67%, while Utilities down by 0.18% and Metal down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Lupin up by 1.81%, ITC up by 1.76%, Mahindra & Mahindra up by 1.43%, Wipro up by 1.36% and SBI up by 1.29%.

On the flip side, Adani Ports & Special Economic Zone down by 0.74%, NTPC down by 0.42%, Kotak Mahindra Bank down by 0.36%, Bajaj Auto down by 0.35% and Hindustan Unilever down by 0.31% were the top losers.

Meanwhile, giving a hint of rationalization in the Goods and Services Tax (GST) tax rates, GST Council member Sushil Kumar Modi, who is also the Deputy Chief Minister of Bihar has said the GST Council would examine the possibility of merging the 12 and 18 percent tax rates to a new slab.

He said that 'The GST Council will put an effort to examine the possibility of merging the tax rates of 12 percent and 18 percent to a new slab which will be in between the two tax rates. There are about 50 items in the bracket of the 28 percent tax rate and the number of items can be reduced from the highest rate'. Though, he also said that he is in favour of letting the tax revenues stabilise before the panel considers merger or further rationalising of slabs.

Modi further said once the system stabilises, the Council will look into bringing petroleum products, electricity duty and property stamp duty into the GST fold. However, he remained bullish that revenue for both the Centre and states will grow and the Goods and Services Tax (GST) regime will stabilise. He said that in the Council’s previous meeting at Guwahati, more than 90 percent of issues related to tax rates have been resolved after the Council brought down 178 items from higher rates to lower one and added that he has given a suggestion to the GST Council that final price tag on items should be inclusive of all taxes and hopes the proposal would be approved by the Council.

The CNX Nifty is currently trading at 10305.80, up by 40.15 points or 0.39% after trading in a range of 10296.40 and 10322.40. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 1.90%, Aurobindo Pharma up by 1.83%, Wipro up by 1.52%, Ultratech Cement up by 1.44% and ITC up by 1.43%.

On the flip side, Adani Ports & Special Economic Zone down by 1.02%, Hindalco down by 0.92%, GAIL India down by 0.77%, NTPC down by 0.67% and Indiabulls Housing Finance down by 0.41% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 0.65 points or 0.04% to 1,721.90, KOSPI Index increased 4.3 points or 0.17% to 2,468.30, Jakarta Composite increased 6.36 points or 0.11% to 6,037.32, Shanghai Composite increased 13.23 points or 0.4% to 3,303.22, Taiwan Weighted increased 90.09 points or 0.87% to 10,488.71, Nikkei 225 increased 97.05 points or 0.43% to 22,908.13 and Hang Seng increased 144.52 points or 0.5% to 28,784.37.