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 recovered sharply in morning after the government reduced its requirement of additional borrowing. Foreign Portfolio Investors (FPIs) purchased shares worth a net of Rs 693.17 crore on Tuesday, as per provisional data released by the stock exchanges. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 246.38 crore. Investors will be eyeing the quarterly results whereby Hindustan Unilever, Adani Power, Adani Transmission, Mindtree, DCB Bank, Tata Sponge and Zee Entertainment are among key companies that will announce their quarterly earnings today. The sentiments were upbeat after rating agency CRISIL enlightened that India will benefit from stronger global growth in the fiscal 2019 provided there are no more after effects from the implementation of the new Goods and Services Tax (GST) and the economy manages to tide over the asymmetry in monetary policy of advance economies together with higher crude oil prices.

Separately, a private report stated that Business optimism index for the January-March quarter 2018 touched three and half year high on improving demand conditions and expectation that government sops in the budget will revive consumption. It further added that the upcoming Union Budget and assembly elections during 2018 might have generated optimism about government sops that could push revival in consumption. Some support also came with report that agricultural exports from India grew 18 per cent to $21 billion in the April-October 2017-18 period compared to just 5 per cent in 2016-17. Banking sectors were buzzing in today’s trade on report that India has cut its additional market borrowing requirement by more than half for the fiscal year ending in March to Rs 20,000 crore. Investors cheered the possibility of a marginal reduction in concerns of fiscal deficit. Bond yields too witnessed easing.

Traders were seen piling up position in IT, TECK and Bankex stocks, while selling was witnessed in Realty, Consumer Durables and Consumer Disc sector stocks. In scrip specific development, Tata Consultancy Services (TCS) was trading firm with the company inking $690 million (Rs 4,400 crore), 10-year deal with M&G Prudential, the UK and European savings and investments business unit of Prudential Plc. This is the third large insurance contract won by India’s top IT services company in the past four months. Gravita India was trading in green on receiving orders worth Rs 250 crore from Luminous Power Technologies which is a part of European Schneider group who are leaders in Energy Management for supplying various Lead products.

On the global front, the Asian markets were trading mostly in red. Japanese orders for machinery surged to their highest level in a decade in November, in a sign business may finally be responding to policymakers’ efforts to get companies to spend their massive cash piles to spur economic growth. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,900 and 10,700 levels respectively. The market breadth on BSE was negative in the ratio of 852:1666, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 34924.01, up by 152.96 points or 0.44% after trading in a range of 34700.82 and 34926.69. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.07%, while Small cap index was down by 0.54%.

The top gaining sectoral indices on the BSE were IT up by 1.68%, TECK up by 1.22%, Bankex up by 0.61%, PSU up by 0.43% and FMCG up by 0.13%, while Realty down by 0.75%, Consumer Durables down by 0.63%, Consumer Disc down by 0.47%, Telecom down by 0.45% and Auto down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.66%, Axis Bank up by 2.51%, Adani Ports & Special Economic Zone up by 2.27%, TCS up by 2.14% and ICICI Bank up by 1.68%.

On the flip side, Hero MotoCorp down by 1.50%, Tata Motors down by 1.32%, Tata Motors - DVR down by 1.27%, Wipro down by 1.19% and Asian Paints down by 0.86% were the top losers.

Meanwhile, ahead of the Goods and Services Tax Council meeting, the Indian Biscuits Manufacturers Association (IBMA) has demanded a lower Goods and Services Tax (GST) rate on biscuit and related products than the current 18 per cent, saying it is a mass consumption food product and similar products are subject to lower tax rate. IBMA pointing that about 15 per cent sales have gone down post GST implementation, said that consumers of biscuit belong predominantly to the poorer segment and will hurt the 2.5 crore employment created by the industry.

The GST Council kept biscuits at 18 per cent tax slab under the GST, which was rolled out from July 1 last year. The association called for bringing down GST rate on biscuits between 5 per cent and 12 per cent saying it is not a premium product and higher tax will lead to stagnation in growth of the industry. IBMA President B P Agarwal said that this is a labour oriented industry and mostly local workers get employment. Besides, other food products such as processed dry fruits, sweets, tea and juice have been kept at a 5 per cent bracket. Agarwal added that the association has written to all the finance ministers and also to the prime minister to place biscuits between 5-12 per cent slab. He also said that if the government doesn’t lowers the taxes the cost will automatically go up and will be passed to consumers. 

The GST Council in its meeting ahead of the Union Budget is expected to discuss revision in rates of some goods, including handicraft items, agricultural equipment and food items and is likely to take up rationalisation of rates of about 70 items, of which at least 40 are services. Amendment in rules may also be taken up to simplify filing and plug some of the loopholes.

The CNX Nifty is currently trading at 10738.05, up by 37.60 points or 0.35% after trading in a range of 10666.75 and 10741.40. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.46%, Adani Ports & Special Economic Zone up by 2.30%, TCS up by 2.13%, ICICI Bank up by 1.77% and Axis Bank up by 1.74%.

On the flip side, GAIL India down by 1.98%, Zee Entertainment down by 1.53%, Wipro down by 1.31%, Tata Motors down by 1.24% and Hero MotoCorp down by 1.20% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 159.74 points or 0.5% to 31,745.01, Nikkei 225 decreased 108.12 points or 0.45% to 23,843.69, KOSPI Index decreased 11.38 points or 0.45% to 2,510.36, FTSE Bursa Malaysia KLCI decreased 2.22 points or 0.12% to 1,823.81 and Jakarta Composite decreased 1.79 points or 0.03% to 6,427.90.

On the other hand, Shanghai Composite increased 0.31 points or 0.01% to 3,436.91 and Taiwan Weighted increased 29.27 points or 0.27% to 11,015.38.