Markets hover near day’s high

Maintaining their upbeat mood, key Indian equity benchmarks were hovering near intraday high points in late morning session, with the Sensex and Nifty gaining more than 400 and 100 points, respectively. Investors’ sentiments got boost with ASSOCHAM chief’s statement that the RBI’s decision to keep the policy rate unchanged is on the expected lines, though the less than hawkish stance has come about as a relief for the industry which had even feared a possible hike in the lending rates, following inflationary concerns. Besides, traders were optimistic with report that the CBDT has directed the taxman not to undertake ‘coercive’ steps in recovering pending taxes from startups under a specific provision of the Income Tax Act, a move aimed to help budding entrepreneurs in the country. Furthermore, heavy buying in Realty, IT and TECK stocks along with rally in the broader markets, also aided the sentiments. Meanwhile, the government approved enhancement of the target of Pradhan Mantri Ujjwala Yojana (PMUY) from 5 crore to 8 crore with an additional allocation of Rs 4,800 crore.

On the global front, Asian markets were trading mixed, as investors remained skittish after this week’s financial turmoil and overnight losses on Wall Street. Back home, in scrip specific development, Piramal Enterprises was trading higher after the company entered into a Joint Venture Agreement (JVA) with Bain Capital Mauritius (BCC), a Private Limited Company incorporated in Mauritius, whereby, BCC shall subscribe to 50% of equity share capital of India Resurgence Asset Management Business (TRAPL), a wholly owned subsidiary of the company.

The BSE Sensex is currently trading at 34531.16, up by 448.45 points or 1.32% after trading in a range of 34108.76 and 34565.03. 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 1.47%, while Small cap index was up by 2.16%.

The top gaining sectoral indices on the BSE were Realty up by 2.87%, IT up by 2.41%, TECK up by 2.22%, Healthcare up by 2.22% and Capital Goods up by 1.77%, while Metal down by 0.12% was the only losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.34%, Dr. Reddy’s Lab up by 3.11%, Infosys up by 2.91%, HDFC up by 2.34% and Axis Bank up by 2.03%. On the flip side, Power Grid Corporation down by 1.43%, NTPC down by 0.52%, Tata Steel down by 0.51%, Asian Paints down by 0.45% and ONGC down by 0.37% were the top losers.

Meanwhile, the Chairman of the Economic Advisory Council to the Prime Minister EAC-PM), Bibek Debroy has said that the fresh non-performing assets (NPAs) accretion of the public sector banks (PSBs) had almost stopped. He said “Many NPA figures are floating, I think India’s bank NPA is not more than Rs 3 lakh crore.” However, he indicated that according to recent Reserve Bank of India (RBI) data, bad loans of PSBs stood at Rs 7.34 lakh crore at the end of Q2 FY18, a bulk of which came from corporate defaulters.

The EAC-PM chairman also said that it was perfectly possible to scrap income tax and other direct taxes and replace them with indirect taxes, but indirect taxes could never be progressive. Referring to issue of low income tax collection, he said that one reason is that the number of personal income taxpayers is so low is because the rural sector is completely out of purview of income taxation. He added that it is a state subject, so the Union government cannot do anything.

Adding further, Debroy said “But the question I am asking is how many of us are arguing that tax should be levied and if such a tax is levied, then obviously, it should be levied above a certain threshold.” He also said that fiscal profligacy had its cost. Besides, he pointed out that fiscal deficit for the current financial year was higher because the goods and services taxes (GST) could be counted only for 11 months. He added that had it not been, fiscal deficit would have been closer to 3.2 percent of GDP this fiscal.

The CNX Nifty is currently trading at 10606.05, up by 129.35 points or 1.23% after trading in a range of 10479.55 and 10614.30. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Cipla up by 5.58%, Indiabulls Housing Finance up by 3.33%, Dr. Reddy’s Lab up by 3.23%, Sun Pharma up by 3.21% and Infosys up by 2.89%. On the flip side, Indian Oil Corporation down by 4.26%, Vedanta down by 1.82%, Power Grid Corporation down by 1.15%, NTPC down by 0.97% and Aurobindo Pharma down by 0.95% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 3.06 points or 0.17% to 1,839.74, KOSPI Index increased 16.65 points or 0.69% to 2,413.21, Hang Seng increased 247.88 points or 0.82% to 30,571.08 and Nikkei 225 increased 253.59 points or 1.17% to 21,898.96.

On the flip side, Shanghai Composite decreased 54.49 points or 1.65% to 3,254.77, Taiwan Weighted decreased 23.02 points or 0.22% to 10,528.52 and Jakarta Composite decreased 9.26 points or 0.14% to 6,525.60.