Equity benchmarks extend gains in late morning session

Indian equity benchmarks extended their gains in late morning session, with the Sensex and the Nifty gaining more than 100 and 30 points, respectively. Investors were taking note of the private report which stated that India could revive a rupee-rial payment arrangement with Iran to bail out exporters from the heat of US sanctions that have cast a shadow over any plan to further boost trade with the Islamic nation, exports to which had reversed a three-year slide in 2017-18. Traders overlooked a report stating that ballooning trade deficit, escalation in commodity prices, particularly oil, coupled with the expectation of the US Federal Reserve raising its rate further, is exerting pressure on the rupee that will widen FY19 trade deficit to 4-year high of 6.4 percent of GDP or $178.1 billion. 

On the global front, Asian market were trading in green, as inflation data provided relief to trading floors, which have fluctuated over recent months on worries that an improving US economy and an expected surge in inflation will force the Federal Reserve to tighten monetary policy. Back home, non-banking finance companies (NBFC) stocks were buzzing with India Ratings’ report that as the banks are moderating their real estate lending growth due to issues related with asset quality and capitalization, the market share of NBFCs and HFCs would continue to expand in the real estate financing space. The ability to structure loans, low credit costs, collateral comfort and attractive yields along with regulatory arbitrage will help in loan growth of NBFCs. In scrip specific development, Quick Heal Technologies edged higher on reporting 81% rise in Q4 net profit.

The BSE Sensex is currently trading at 35348.56, up by 102.29 points or 0.29% after trading in a range of 35262.06 and 35389.40. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.98%, Energy up by 0.96%, Metal up by 0.79%, Basic Materials up by 0.55% and FMCG was up by 0.42%, while Telecom down by 3.27%, Healthcare down by 0.41%, TECK down by 0.32%, Consumer Durables down by 0.29% and Utilities was down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 5.71%, Kotak Mahindra Bank up by 1.02%, ICICI Bank up by 0.99%, Reliance Industries up by 0.81% and HDFC was up by 0.68%. On the flip side, Bharti Airtel down by 4.58%, Sun Pharma down by 1.94%, Tata Motors - DVR down by 1.64%, Dr Reddys Lab down by 0.97% and Hero MotoCorp was down by 0.96% were the top losers.

Meanwhile, the Authority for Advance Ruling (AAR) has said that accommodation and restaurant services provided within premises of Hotel to employees and guests of special economic zone (SEZ) developers or units will not be treated as ‘zero-rated’ supplies and therefore will be taxable under the Goods and Services Tax (GST) regime. In an application filed before the Karnataka bench of the AAR, the applicant had sought to clarify whether hotel accommodation and restaurant services provided by them, within the premises of the hotel, to the employees and guests of SEZ units be treated as supply of goods and services.

In the earlier service tax regime, the law provided that only services which are labelled as authorised operation will be treated as zero-rated supply to the SEZ. Such operations included supply of machinery, contractor, among others. Experts said that GST laws did not specify which goods and services would be considered as authorised operations which created confusion about their taxability.

Section 16 of the Integrated GST (IGST) Act, supply of goods or services or both to a SEZ developer or unit are treated as ‘zero-rated supply’. Besides, Section 12 of the IGST Act defines the ‘place of supply’ of services by way of lodging accommodation by a hotel or for providing restaurant and catering services as the location where the services are actually performed. In the instant case, the applicant is located outside the SEZ. Therefore, the services rendered by the applicant are neither the part of authorised operations nor consumed inside the SEZ.

The CNX Nifty is currently trading at 10751.95, up by 35.40 points or 0.33% after trading in a range of 10724.45 and 10762.80. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 5.40%, HPCL up by 3.52%, Indiabulls Housing up by 2.09%, Indian Oil Corporation up by 1.88% and BPCL was up by 1.85%. On the flip side, Bharti Airtel down by 4.48%, Sun Pharma down by 2.47%, Bharti Infratel down by 1.50%, Hero MotoCorp down by 1.15% and Dr Reddys Lab was down by 1.15% were the top losers.

All the Asian market were trading in green, Shanghai Composite rose 2.55 points or 0.08% to 3,176.96, KOSPI Index gained 17.12 points or 0.69% to 2,481.28, Taiwan Weighted surged 98.77 points or 0.92% to 10,858.98, Jakarta Composite gained 108.66 points or 1.84% to 6,016.60, Nikkei 225 strengthened 222.8 points or 0.99% to 22,719.98 and Hang Seng was up by 420.7 points or 1.37% to 31,229.92.