Benchmarks extend gains in morning session

Indian equity benchmarks extended their gains in morning session on account of buying in frontline blue chip counters. The rupee opened higher against the US dollar on account of selling of American currency by banks and exporters. The sentiments were upbeat as Union commerce and industry minister Suresh Prabhu exuded confidence that India will become a $5 trillion economy in the next seven years, adding that India will be a bigger economy than China at some point of time. He also said that manufacturing sector would contribute $1 trillion, services sector $3 trillion and the rest would come from agriculture for the country to become a $5 trillion economy in the next seven years. Besides, the IMF said that the Indian economy now seems to be on its way to recovering from disruptions caused by demonetization and roll-out of goods and services tax. At the same time, the IMF underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems. Separately, industry body FICCI enlightened that manufacturers in the country have a positive outlook for the sector in the January-March quarter on the back of higher production. The proportion of respondents reporting higher output growth during the Q4 2017-18 has increased significantly to 55% from 47% in Q3 while the percentage of respondents reporting low production has come down to 11% in the fourth quarter from 15% in the preceding quarter.

Meanwhile, real estate stocks were buzzing on report that housing sales exceeded new supply by 5% during the last two years in seven major cities. The private report advised end-users and investors to buy flats as prices are stable and interest rate low. It highlighted that housing sales stood at 2,44,830 units during 2016 and 2017 calendar years in seven major cities, while cumulative new launches of homes were 2,33,387 units. PSU banking stocks were under pressure on report that the gross non-performing assets (NPAs) of all the banks in the country amounted to Rs 8,40,958 crore in December, led by industry loans followed by services and agriculture sectors. The highest amount of gross NPAs was for country’s largest lender SBI at Rs 2,01,560 crore. Among others, Punjab National Bank was at Rs 55,200 crore; IDBI Bank - Rs 44,542 crore; Bank of India - Rs 43,474 crore; Bank of Baroda - Rs 41,649 crore; Union Bank of India - Rs 38,047 crore; Canara Bank - Rs 37,794 crore and ICICI Bank - Rs 33,849 crore. Indian Overseas Bank had gross NPAs of Rs 31,724 crore; Central Bank of India - Rs 32,491 crore; UCO Bank - Rs 24,308 crore; Allahabad Bank - Rs 23,120 crore; Andhra Bank - Rs 21,599 crore and Corporation Bank - Rs 21,818 crore.

Investors shrugged off the S&P Global Ratings’ report that US President Donald Trump’s decision to hike duties on steel and aluminium could result in retaliatory action from EU and China, triggering a trade war and hurting global economic growth. It said the overall economic impact of the tariffs on the United States in the near term is likely to be minimal, with a mixed impact on corporate sectors. Separately, CARE Ratings said that the Reserve Bank of India is likely to increase its key rates by 0.25 per cent this year as inflation is expected to be at a higher range due to wide fiscal deficit and high prices of oil and farm produce.

Traders were seen buying in IT, TECK and FMCG stocks, while selling was witnessed in PSU sector stocks. In scrip specific development, Andhra Bank slipped after the Enforcement Directorate filed a charge sheet against a former bank director in an alleged Rs 5,000-crore bank fraud case involving a Gujarat-based pharma firm. The final report was filed before Additional Sessions Judge Sidharth Sharma against Anup Prakash Garg under the sections of Prevention of Money Laundering Act (PMLA). Man Infraconstruction was trading in green on receiving orders worth Rs 220.75 crore from Pimpri Chinchwad Municipal Corporation (PCMC) under the Pradhan Mantri Awas Yojna (PMAY) Housing Scheme.

On the global front, Asian markets were trading in green as US job data revive risk appetite. Chinese Commerce Minister Zhong Shan said that any trade war with the United States will only bring disaster to the world economy, as Beijing stepped up its criticism on proposed metals tariffs by Washington amid fears it could shatter global growth. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,600 and 10,300 levels respectively. The market breadth on BSE was positive in the ratio of 1373:923, while 121 scrips remained unchanged.

The BSE Sensex is currently trading at 33642.19, up by 335.05 points or 1.01% after trading in a range of 33468.16 and 33673.83. 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 0.51%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were IT up by 1.97%, TECK up by 1.68%, FMCG up by 1.36%, Metal up by 0.95% and Basic Materials up by 0.90%, while PSU down by 0.27% was the sole losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.91%, Infosys up by 2.29%, Wipro up by 2.16%, Tata Steel up by 2.01% and Bharti Airtel up by 1.58%.

On the flip side, Coal India down by 2.59%, SBI down by 1.03%, Power Grid down by 0.44%, Tata Motors - DVR down by 0.36% and Asian Paints down by 0.35% were the top losers.

Meanwhile, the Goods and Services (GST) Council at its 26th meeting, has decided to extend the available tax exemptions on imported goods for a further 6 months beyond March 31. Thus, exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October 1, 2018, by which time an e-Wallet scheme is expected to be in place to continue the benefits in future.

Besides, the Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, has reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit. It has appreciated that the pace of grant of IGST refund has picked up. Thereafter, it has directed GSTN to expeditiously forward the balance refund claims to the central GST or state GST authorities, for their immediate sanction and disbursal.

In its meeting on October 6, 2017 the Council had taken up the issues faced by exporters due to cash blockage on account of having to upfront pay GST or IGST on the inputs, raw materials etc. and finished goods imported or procured for purposes of exports. As an interim solution, the Council had decided to re-introduce the pre-GST tax exemptions on such imports till March 31. Additionally, for merchant exporters, a special scheme of payment of GST at 0.1 per cent on their procured goods was introduced.

The permanent solution agreed to by the Council was to introduce an e-Wallet scheme with effect from April 1, 2018. The e-Wallet scheme is basically the creation of electronic e-Wallets, which would be credited with notional or virtual currency by the DGFT. This notional or virtual currency would be used by the exporters to make the payment of GST or IGST on the goods imported or procured by them so their funds are not blocked. 

The CNX Nifty is currently trading at 10333.55, up by 106.70 points or 1.04% after trading in a range of 10295.45 and 10342.35. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.35%, ITC up by 2.91%, Wipro up by 2.40%, Infosys up by 2.30% and Vedanta up by 2.20%.

On the flip side, Coal India down by 2.35%, SBI down by 1.01%, Bosch down by 0.62%, Asian Paints down by 0.54% and Aurobindo Pharma down by 0.41% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 15.53 points or 0.84% to 1,859.45, KOSPI Index increased 19.3 points or 0.78% to 2,478.75, Shanghai Composite increased 19.68 points or 0.59% to 3,326.84, Jakarta Composite increased 37.38 points or 0.58% to 6,470.70, Taiwan Weighted increased 124.52 points or 1.15% to 10,989.34, Nikkei 225 increased 327.62 points or 1.53% to 21,796.82 and Hang Seng increased 483.41 points or 1.56% to 31,479.62.