Benchmarks trade slightly in green in early deals

Indian equity benchmarks made an optimistic start and are trading slightly in green in early deals, as traders took note of private report stating that the government is considering to set a time limit for withdrawing cases admitted for insolvency resolution, ending ambiguity on a key aspect of the procedure. Companies referred to bankruptcy courts may not be allowed to leave the process once bids have been invited or a resolution plan has been accepted. Gains were also led by buying witnessed in banking stocks, with ICICI Bank trading more than 7 per cent higher. Private sector bank ICICI Bank had the previous day reported its smallest quarterly profit in two years as stricter RBI rules forced the country’s third-biggest lender by assets to account for more bad loans. But the earnings were in line with expectations.

Global cues too remained supportive with Asian shares trading mostly in green at this point of time with technology stocks resilient after generally upbeat earnings despite weakness in the global smartphone market and concerns about more regulation. The US markets ended higher on Monday as upward momentum seen last Friday in response to the Labor Department’s monthly jobs report.

Back home, power stocks remained on buyers’ radar after World Bank said, India is doing extremely well on the electrification front and about 30 million people received electricity between 2010 and 2016, which is much more than any other country in the world. However, telecom stocks edged lower after Telecom Regulatory Authority of India (Trai) issued 26 orders imposing fines of over Rs 2.81 crore for unsolicited commercial calls and pesky messages last year.

The BSE Sensex is currently trading at 35291.68, up by 83.54 points or 0.24% after trading in a range of 35252.10 and 35388.87. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.07%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Bankex up by 1.14%, Healthcare up by 0.56%, Realty up by 0.51%, Energy up by 0.41% and FMCG was up by 0.18%, while IT down by 0.65%, TECK down by 0.62%, Metal down by 0.34%, Auto down by 0.27% and Consumer Durables was down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.98%, Axis Bank up by 1.98%, ONGC up by 1.25%, Yes Bank up by 1.12% and Dr. Reddys Lab up by 0.82%. On the flip side, Indusind Bank down by 1.52%, Infosys down by 1.33%, Kotak Mahindra Bank down by 1.17%, Mahindra & Mahindra down by 1.13% and Wipro down by 1.09% were the top losers.

Meanwhile, with government introducing various anti-evasion measures like TDS, TCS and credit matching, SBI Research in its latest report has expressed hope that the Goods and Services Tax (GST) collection will be very good in the ongoing financial year (FY19) and revenue target of Rs 12.9 trillion also seems feasible.

As per the report, out of all the 15 States, seven states -- Karnataka, West Bengal, Haryana, Bihar, Odisha, Chhattisgarh and Jharkhand are expected to post lower than 14% growth in tax revenue in the current year, while remaining states may see better tax collection. It also said that looking at the GST budgetary estimates for FY19 across the states, Gujarat, Karnataka, Bengal, Haryana and Bihar are highly depending on GST and will get over 38% GST share to tax revenue, while for Andhra, Chhattisgarh, and Jharkhand it is less than 25% and may rely on the other sources of revenue to meet their funds.

SBI Research has urged states to focus on increasing the tax-base to improve tax collection, rather than imposing higher taxes on other sources. It further expressed need of some time for state GST to get settle down and added that with the increased tax base and better compliance, the revenue collection for the state will improve in next two to three years down the line.

The CNX Nifty is currently trading at 10726.85, up by 11.35 points or 0.11% after trading in a range of 10718.65 and 10758.55. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 6.78%, Axis Bank up by 1.85%, Cipla up by 1.41%, ONGC up by 1.20% and Yes Bank up by 1.06%. On the flip side, Indusind Bank down by 1.96%, HCL Tech. down by 1.42%, Indian Oil Corporation down by 1.37%, Infosys down by 1.35% and Wipro down by 1.33% were the top losers.