Firm trade prevails in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in front line blue chip counters. The rupee opened down against dollar on account of buying of American currency by banks and importers. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 522.74 crore in the previous trading session, as per provisional data released by the stock exchanges. Domestic Institutional Investors (DIIs) bought shares worth a net Rs 64.70 crore, as per provisional data. The sentiment were upbeat on foreign brokerage report that India’s growth rate is expected to accelerate over the coming year and is likely to improve further to 7.6% by 2019-20 as key sectors would revive from disruptions related to the implementation of GST and demonetization. The report further said the recovery in India’s GDP growth will likely be relatively gradual, preventing price pressures from rebounding and allowing the Reserve Bank of India to keep rates on hold for the time being. Finance Minister Arun Jaitley said that the government is eyeing Rs 1 lakh crore from divestments. Separately, it ruled out having a single rate for all commodities under the Goods and Services Tax (GST) saying items like food products have been placed at minimum taxation levels while luxury goods were in the higher categories. Some support also came with the Rajya Sabha unanimously passing the Insolvency and Bankruptcy Code (Amendment) Bill that replaces an Ordinance that prevents unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code.

Investors took note that the government has notified lower 1% GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it. The finance ministry has notified the changes decided by the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, in November 2017. The notification stipulates that manufacturers who have opted for composition scheme will now have to pay 1% GST as against 2% earlier. Select auto related stocks were buzzing after rating agency ICRA forecasted domestic tractor industry to touch an all time high sales in FY-18 led by improved farm sentiments and two consecutive normal monsoon. The agency expects domestic tractor industry to record a volume growth of 12-13% during FY-18 with positive growth momentum also likely to spill over in next fiscal.

Traders were seen piling up position in Metal, Basic Materials and Consumer Durables sector stocks. In scrip specific development, Raj Oil Mills, the company, which owned household brand names of the ‘90s - Cocoraj Coconut Hair Oil and Guinea groundnut oil was locked at upper circuit limit. The company will have a new owner after lenders managed to sell the company in the default resolution process. They sold it to Rubberwala Housing, a little-known company which is into oil trading and real estate business, to recover their dues.

On the global front, the Asian markets were trading mostly in green. South Korea will consider measures to boost capital outflows if the won continues to rise sharply, a move that could help the trade-reliant national deal with the economic effects of a surging currency. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,900 and 10,450 levels respectively. The market breadth on BSE was positive in the ratio of 1871:609, while 90 scrips remained unchanged.

The BSE Sensex is currently trading at 33954.30, up by 142.04 points or 0.42% after trading in a range of 33866.50 and 33998.37. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index was up by 1.12%.

The top gaining sectoral indices on the BSE were Metal up by 1.54%, Basic Materials up by 1.52%, Consumer Durables up by 1.39%, Telecom up by 1.24% and Energy up by 0.93%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 1.89%, Bharti Airtel up by 1.54%, Tata Motors - DVR up by 1.48%, Adani Ports & Special Economic Zone up by 1.47% and Reliance Industries up by 1.27%.

On the flip side, Dr. Reddy’s Lab down by 2.32%, Tata Motors down by 0.64%, ONGC down by 0.61%, HDFC Bank down by 0.45% and Infosys down by 0.44% were the top losers.

Meanwhile, the government has notified the changes decided by the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, in November 2017, of lower 1 percent Goods and Services Tax (GST) rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it.

The notification stipulates that manufacturers who have opted for composition scheme will now have to pay 1 percent GST as against 2 percent earlier. Besides, traders opting for composition scheme would now have to pay the tax at 1 percent on their turnover of taxable supplies. While, a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs 1.5 crore.

Over 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the goods and services tax (GST) which rolled out from 1 July. The GST Council in its November meeting increased the threshold for composition scheme to Rs 1.5 crore and also decided to amend the GST law to raise the statutory threshold to Rs 2 crore.

The CNX Nifty is currently trading at 10490.10, up by 47.90 points or 0.46% after trading in a range of 10460.55 and 10503.60. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were HPCL up by 2.05%, Hindalco up by 2.02%, Vedanta up by 1.97%, ICICI Bank up by 1.76% and Bharti Airtel up by 1.51%.

On the flip side, Dr. Reddy’s Lab down by 2.43%, Tata Motors down by 0.82%, ONGC down by 0.56%, Infosys down by 0.45% and Bajaj Auto down by 0.44% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 6.16 points or 0.25% to 2,485.81, FTSE Bursa Malaysia KLCI increased 10.36 points or 0.58% to 1,793.06, Shanghai Composite increased 29.55 points or 0.88% to 3,377.88, Taiwan Weighted increased 82.44 points or 0.77% to 10,793.17 and Hang Seng increased 84.2 points or 0.28% to 30,599.51.

On the other hand, Jakarta Composite decreased 86.78 points or 1.37% to 6,252.46.

Japan stock exchange was closed on account of National holiday.