Benchmarks trade jubilantly as exit polls suggest BJP win in Gujarat

Indian equity benchmarks made a gap-up opening and are trading jubilantly in early deals, with frontline gauges recapturing their crucial 33,500 (Sensex) and 10,350 (Nifty) levels. Sentiments remained up-beat with exit polls indicating both Himachal Pradesh and Gujarat going in favour of ruling BJP. Exit polls conducted by various polling agencies have predicted that BJP would retain Gujarat, the major battle ground despite a reduced margin of seats in the 182-member assembly. Some support also came with global rating agency Moody’s statement that it has a stable outlook for non-financial corporate in the country, except for telcos, on which it has a negative outlook for 2018. It said that stable outlook is underpinned by the expectation that GDP growth of around 7.6% will result in higher sales volumes.

On the global front, Asian markets are trading mostly in red, as investors assessed messages from Federal Reserve and European Central Bank meetings amid lingering concerns about the Republican tax overhaul package. The US markets made a modestly lower closing in the last session and the Dow pulled back into negative territory after reaching a new record intraday high.

Back home, traders will also be eyeing the start of the winter session of Parliament. During a total of 14 sittings over a duration of 22 days, both the Houses, Lok Sabha and Rajya Sabha, will take up 25 Bills, including GST compensation to states, for consideration and passing. Meanwhile, shares of multi-specialty hospital chain Shalby, which recently concluded its Rs 504 crore initial public offering, listed at a discount of 3.35 per cent at Rs 239.70 on NSE against the issue price of Rs 248.

The BSE Sensex is currently trading at 33588.18, up by 341.48 points or 1.03% after trading in a range of 33456.02 and 33621.96. There were 30 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.08%, while Small cap index was up by 1.40%.

The top gaining sectoral indices on the BSE were Metal up by 2.52%, Basic Materials up by 1.61%, Realty up by 1.60%, Capital Goods up by 1.56% and Industrials up by 1.52%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were HDFC Bank up by 2.42%, Bajaj Auto up by 2.32%, Adani Ports up by 2.14%, Larsen & Toubro up by 2.08% and Tata Steel up by 1.73%. On the flip side, Power Grid Corporation down by 0.15% was the sole loser.

Meanwhile, in order to bring down merchant discount rates (MDRs), the government will soon hold deliberations with the Reserve Bank of India (RBI). A senior Finance Ministry official has said that the MDRs, which are set to be implemented from January 1, 2018, have gone up to 0.90 percent recently from 0.25 percent of transaction value, which would impact Digital India movement and there is a need to look into the issue. MDR is the rate charged to a merchant by a bank for providing debit and credit card services.

The new norms announced by the central bank put the MDR charges at 0.40 percent if the transaction involves physical infrastructure such as a swipe machine for small merchants with a turnover of up to Rs 20 lakh during the previous financial year. The MDR charges are capped at 0.90 percent for other merchants limited to Rs 1,000 per transaction. The RBI, on December 06, revised the MDR for debit card transactions at large format retail stores from 0.50 percent per transaction to 0.90 percent -- not exceeding Rs 1,000.

The official pointed out that most merchants will be discouraged to use Point of Sale (POS) machines, especially small merchants who do not get input tax credit in the Goods and Services Tax (GST). There are nearly 27-28 crore transactions per month on POS machines with an average size of Rs 1,500.

Meanwhile, facing flak from various quarters, especially card-acquiring banks, the RBI clarified that it lowered MDRs after detailed talks with all stakeholders to achieve the twin objectives of promoting less-cash economy and ensure all stakeholders do a profitable business. The central bank also clarified that no merchant will at any level charge MDRs to consumers and the new rates are applicable only on debit card transactions and not credit cards.

The CNX Nifty is currently trading at 10360.80, up by 108.70 points or 1.06% after trading in a range of 10332.20 and 10373.10. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 4.27%, Hindalco up by 2.66%, Eicher Motors up by 2.43%, HDFC Bank up by 2.39% and Adani Ports up by 2.09%. On the flip side, Tech Mahindra down by 1.33% and Power Grid Corporation down by 0.27% were the only losers.

Asian markets are trading mostly in red; Hang Seng declined 332.62 points or 1.14% to 28,833.76, Taiwan Weighted decreased 85.16 points or 0.81% to 10,452.85, Nikkei 225 shed 40.07 points or 0.18% to 22,654.38, Shanghai Composite dropped 28.08 points or 0.85% to 3,264.36, Jakarta Composite slipped 23.18 points or 0.38% to 6,090.48 and FTSE Bursa Malaysia KLCI was down by 4.68 points or 0.27% to 1,754.32.

On the flip side, KOSPI Index was up by 11.7 points or 0.47% to 2,481.18.