Firm trade persists; Sensex holds 35,300 mark

Key Indian benchmarks continued to trade firm in late morning session, with Sensex holding 35,300 mark on the back of firm cues from Asian markets. Investors’ sentiments remained upbeat with a report that GST Council’s decided to cut rates on 29 items and 54 categories of services with effect from 25 January. Traders continued taking some encouragement from the rating agency, Ind-Ra’s projection that the country's economic growth will improve to 7.1 percent in the next fiscal year 2018-19 from 6.5 percent in the current year 2017-18, supported by robust consumption demand and low commodity prices. Adding some optimism among the investors, Vice-President M Venkaiah Naidu said that various decisions of the central government, including demonetisation and GST, are likely to have a positive impact in the coming years. Some support also came with Union Minister Suresh Prabhu’s statement that the commerce ministry is working on a strategy to diversify India's export basket in a bid to boost shipments. Optimism in broader markets along with buying in Banking, Energy and Industrials stocks, too supported the markets.

On the global front, Asian markets were trading mostly in green, as optimism about upbeat corporate earnings and global economic growth after China's economic expansion exceeded the government's 2017 target has boosted investors’ sentiments. Back home, in scrip specific development, Gala Global Products traded higher after the company bagged order worth Rs 47 million for printing and supply of various books and registers from Department of State Government, Jharkhand.

The BSE Sensex is currently trading at 35389.15, up by 128.86 points or 0.37% after trading in a range of 35221.16 and 35434.08. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Bankex up by 0.68%, Energy up by 0.61%, Industrials up by 0.52%, PSU up by 0.49% and Capital Goods up by 0.44%, while TECK down by 0.40%, Telecom down by 0.39%, Utilities down by 0.35%, IT down by 0.33% and Auto down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 2.99%, SBI up by 1.27%, HDFC Bank up by 1.07%, Reliance Industries up by 1.01% and Dr. Reddy’s Lab up by 0.91%. On the flip side, Infosys down by 1.03%, Hero MotoCorp down by 0.81%, Wipro down by 0.78%, Mahindra & Mahindra down by 0.49% and NTPC down by 0.46% were the top losers.

Meanwhile, days ahead of the Union Budget for 2018-19, the all-powerful Goods and Services Tax (GST) Council, at its 25th meeting, has decided to cut tax rate on 29 items and 54 categories of services with effect from 25 January. It also decided to divide Rs 35,000 crore IGST collections between centre and states, in order to help tide over the revenue shortfalls being faced by most states. However, the council has not yet made any decision regarding simplifying the process of GST filing. At its next meeting, it may also consider the issue of bringing items like crude oil, natural gas, petrol, diesel, ATF and real estate within the ambit of new tax regime.

The Council, headed by finance minister Arun Jaitley and comprising representatives of all states, cut GST rate on second-hand medium and large cars and SUVs from 28 percent to 18 percent and on other old and used motor vehicles to 12 percent. Besides, tax on diamonds and precious stones was slashed to 0.25 percent from current 3 percent. While tax rate for bio-diesel was slashed to 12 percent from 18 percent, that for public transport buses run on environment-friendly bio-fuels has been reduced to 18 percent from 28 percent previously. Moreover, the rate on sugar-boiled confectionery, drinking water packed in 20 litre bottles, fertiliser-grade phosphoric acid, bio-diesel and drip irrigation system has been reduced from 18 to 12 percent. The rate on tamarind kernel powder, mehendi paste in cones and domestic LPG supplied by private distributors has been reduced to 5 percent from 18 percent. Services relating to admission or conduct of examinations provided to all educational institutions, entrance fees for entrance examination and for transportation of students up to higher secondary schools will also be exempt from taxation.

In a bid to ease compliance burden, finance minister Arun Jaitley has said that the Council veered around to the idea of registered entities continuing to file the return in GSTR 3B Form while moving to a system where supplier invoice captures details of the transaction. He also stated that the GST provision requiring transporters to carry an e-way bill, when moving goods of over Rs 50,000 in value between states, will be implemented from February 1 to check rampant tax evasion. The minister further indicated that as many as 15 states have decided to implement the provision for intra-state movements as well. Besides, he said that after GST rollout from July 1, the requirement of carrying e-way bill was postponed pending IT network readiness. He pointed out that once the e-way bill system is implemented, tax avoidance will become extremely difficult as the government will have details of all goods above the value of Rs 50,000 moved and can spot the mismatch if either the supplier or the purchaser does not file tax returns.

The CNX Nifty is currently trading at 10844.05, up by 27.05 points or 0.25% after trading in a range of 10793.90 and 10857.70. There were 26 stocks advancing against 23 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Adani Ports & SEZ up by 2.51%, Indiabulls Housing Finance up by 2.14%, Dr. Reddy’s Lab up by 1.21%, SBI up by 1.14% and HDFC Bank up by 0.97%. On the flip side, GAIL India down by 1.55%, Ultratech Cement down by 1.34%, Aurobindo Pharma down by 1.33%, Infosys down by 0.98% and Ambuja Cement down by 0.89% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 3.57 points or 0.14% to 2,519.38, FTSE Bursa Malaysia KLCI increased 3.58 points or 0.2% to 1,825.18, Shanghai Composite increased 19.63 points or 0.56% to 3,494.38, Nikkei 225 increased 27.93 points or 0.12% to 23,791.30, Taiwan Weighted increased 79.28 points or 0.72% to 11,150.85 and Hang Seng increased 81.76 points or 0.25% to 32,203.70.

On the flip side, Jakarta Composite decreased 22.83 points or 0.35% to 6,449.84.