Domestic bourses pare initial gains; trade flat in early noon deals

Domestic bourses pared most of their initial gains and were trading flat in the early noon session as investors turned a little pessimistic after a report showed that India’s per capita income grew at a slower pace of 8.6 per cent to Rs 1,12,835 during the last fiscal ended March 2018. There was some level of cautiousness on the street as foreign institutional investors (FIIs) sold shares worth a net Rs 15.31 crore and Domestic Institutional Investors (DII) sold shares worth a net Rs 266.02 crore on May 31, 2018.  However, markets managed to trade above neutral line as some comfort came with Union Finance Minister Piyush Goyal stating that Indian economy is on the right track and the country is now set to achieve even higher growth in the future. Investors also got some solace with Economic Affairs Secretary Subhash Chandra Garg indicating that the retail prices of petrol and diesel might see a further decline.

On the global front, Asian markets were trading mostly in green. Investors shrugged of fears of a trade war after Donald Trump imposed stiff tariffs on European, Mexican and Canadian steel and aluminium. Back on the domestic turf, gems & jewellery sector remained in focus after Commerce and Industry Minister Suresh Prabhu said that the government is mulling a proposal to import gold from Russia to help gems and jewellery exporters provided they agree to ship out the entire consignment after value addition. Besides, auto stocks also remained in limelight as companies report their sales number today.  In scrip specific development, Ashok Leyland jumped on reporting 51% growth in May sales and Dilip Buildcon gained on emerging lowest bidder for project worth Rs 1750.05 crore.

The BSE Sensex is currently trading at 35353.36, up by 30.98 points or 0.09% after trading in a range of 35267.81 and 35438.22. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined by 0.60%, while Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were Auto up by 1.11%, Consumer Durables up by 0.36%, Capital Goods up by 0.32%, Metal up by 0.23% and Telecom up by 0.22%, while Power down by 1.36%, Utilities down by 1.24%, PSU down by 0.93%, Oil & Gas down by 0.58% and Bankex down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 5.10%, Maruti Suzuki up by 2.23%, Tata Motors up by 2.07%, Tata Motors - DVR up by 1.74% and ICICI Bank up by 1.61%. On the flip side, ONGC down by 2.40%, Power Grid Corporation down by 2.37%, Adani Ports down by 1.52%, Kotak Mahindra Bank down by 1.47% and Hindustan Unilever down by 1.34% were the top losers.

Meanwhile, Moody’s Investors Service in its latest report has said that India’s tax reforms are likely to expand revenue base in fast growing economies like India. However, it recommended that tax reforms must be accompanied by lowering of fiscal deficit and effective management of expenditure. It also said that tax administration and compliance is likely to be most effective in the Philippines, India, Indonesia and Thailand.

According to the report, most sovereigns including India have embarked on tax administration and compliance reforms, especially through the centralisation of multiple agencies and increased usage of technology. It also said that for many sovereigns, measures to broaden the tax base are unlikely to boost fiscal strength unless accompanied by enhanced tax administration and measures that effectively manage expenditure growth. It pointed out that the credit profiles of fast growing economies that are undertaking fiscal consolidation and which have relatively strong or strengthening institutions - such as the Philippines, India and Indonesia - are likely to garner the most support from ongoing tax reforms in the medium term.

On indirect revenue mobilization, the report stated that India and Sri Lanka have both recently streamlined and levied their value-added tax (VAT) or goods and services tax (GST) regimes. For India, it said that this was the result of replacing a system of taxation at multiple points of production with taxation at a sole point. Overall, it noted that indirect revenue mobilisation is likely to be most effective in the Philippines, India and Sri Lanka, as these economies benefit from ongoing reforms.

The CNX Nifty is currently trading at 10737.30, up by 1.15 points or 0.01% after trading in a range of 10716.40 and 10764.75. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 5.01%, Vedanta up by 2.78%, Maruti Suzuki up by 2.42%, Tata Motors up by 2.11% and Hero MotoCorp up by 1.55%. On the flip side, Power Grid Corporation down by 2.70%, ONGC down by 2.64%, Eicher Motors down by 2.55%, Bajaj Finserv down by 2.24% and GAIL India down by 1.91% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 17.38 points or 0.72% to 2,440.39, Nikkei 225 increased 40.02 points or 0.18% to 22,241.84, and Taiwan Weighted increased 74.12 points or 0.68% to 10,949.08. On the other hand, Shanghai Composite decreased 20.99 points or 0.68% to 3,074.49 and Hang Seng decreased 20.39 points or 0.07% to 30,448.17.