Markets continue to trade in high spirit in noon deals

Indian equity benchmarks were trading in high spirit in early afternoon session, as buying momentum in the equities persisted. Investors’ sentiment got a support with global rating agency Moody’s report 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. Traders took some encouragement with exit polls suggesting a clear majority win for Bharatiya Janata Party (BJP) in both Gujarat as well as Himachal Pradesh assembly elections.  Besides, bouts of buying in Metal, Basic Materials, Auto and Capital Goods stocks, too brought some cheer on the street. The rupee too emerged strong in early trade, and was trading at 64.12 against US Dollar, higher by 22 paise, thus registering a three-month high against the previous close. In scrip specific development, Vedanta was up by over four and half percent on planning to raise up to Rs 500 crore through issuance of Non-Convertible Debentures (NCDs).

On the global front, Asian markets were trading mostly in red, with the overnight weak close on Wall Street amid uncertainty about the outlook for the Republican tax reform plan weighing on investor sentiment. Back home, the BSE Sensex is currently trading at 33528.92, up by 282.22 points or 0.85% after trading in a range of 33456.02 and 33621.96. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index was up by 1.33%.

The top gaining sectoral indices on the BSE were Metal up by 2.64%, Basic Materials up by 1.45%, Auto up by 1.37%, Capital Goods up by 1.36% and Industrials up by 1.34%, while there were no losers on the BSE sectoral front.  

The top gainers on the Sensex were Mahindra & Mahindra up by 2.98%, Bajaj Auto up by 2.49%, HDFC Bank up by 2.29%, Adani Ports & SEZ up by 2.24% and Coal India up by 1.79%. On the flip side, ONGC down by 0.87%, Cipla down by 0.75%, Hindustan Unilever down by 0.50%, Power Grid down by 0.30% and TCS down by 0.04% were the top losers.

Meanwhile, the Goods and Services Tax (GST) Council member Sushil Kumar Modi, who is also the Deputy Chief Minister of Bihar has said that the Council will look into bringing electricity, petroleum products and some other items under the purview of new indirect tax regime in future. He also said that the inclusion of these items can be done without amending the Constitution, but it would be difficult to specify any timeline for this to happen. Besides, he pointed that if petroleum products are brought under the GST, it will attract the highest tax slab prevalent at that time and states would be at liberty to levy cess on it in order to protect their revenues. He added that at present, both states and the Centre earn 40 percent of their revenue from petroleum products.

Modi also hinted at the reduction of tax slabs going forward after tax collection stabilises. The current GST regime has five tax slabs - 0 percent, 5 percent, 12 percent, 18 percent and 28 percent. An additional GST cess is also levied on certain products. Though the final decision would be taken by the Council, he said that the possible scenario could be that the current highest tax slab of 28 percent could be brought down to 25 percent and two tax slabs of 12 percent and 18 percent could be merged into one.

Adding further, he said that the GST Network (GSTN) is the backbone of the GST regime. He also said that GSTN is robust and only 30 percent of its capacity has been utilised so far. He indicated that in the last four months, 3.20 lakh returns have been filed through the network, and noted that forms are being simplified with the objective to make the entire tax experience an easy affair. He also stated that at the same time work is also underway with regard to refund and input tax credit. He said that the GST will succeed like Value Added Tax and expressed hope that states will not seek compensation from the Centre after 2-3 years.

The CNX Nifty is currently trading at 10347.20, up by 95.10 points or 0.93% after trading in a range of 10332.20 and 10373.10. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 4.90%, Mahindra & Mahindra up by 3.24%, Hindalco up by 2.62%, Eicher Motors up by 2.35% and Bajaj Auto up by 2.31%. On the flip side, Tech Mahindra down by 0.94%, Cipla down by 0.85%, ONGC down by 0.81%, Bharti Infratel down by 0.38% and Power Grid down by 0.37% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 411.1 points or 1.41% to 28,755.28, Nikkei 225 dipped 141.23 points or 0.62% to 22,553.22, Taiwan Weighted was down by 46.57 points or 0.44% to 10,491.44, Jakarta Composite dropped 28.52 points or 0.47% to 6,085.13, Shanghai Composite shed 27.89 points or 0.85% to 3,264.54 and FTSE Bursa Malaysia KLCI was down by 5.14 points or 0.29% to 1,753.86.

On the flip side, KOSPI Index was up by 12.59 points or 0.51% to 2,482.07.