Domestic bourses trade jubilantly in early noon session

Domestic bourses fervently gained from strength-to-strength on fresh buying by investors as the July derivatives contracts started on a strong note amid recovery in the rupee. Heavy buying in Energy, Capital Goods and Metal stocks drive Sensex and Nifty up by over 200 points and 70 points respectively. Some support came in with Economic Affairs Secretary Subhash Chandra Garg’s statement that India has adequate ‘firepower’ of foreign exchange reserves to deal with the current volatility in the rupee. Meanwhile, investors took note with a report which stated that India is preparing Plan B for its oil consumption after the United States administration under President Donald Trump declared zero tolerance against any country or entity that flouts its diktat to stop buying crude from Iran after November 4 and when the 180-day wind-down period ends.

On the sectoral front, Public sector bank was in focus after a report highlighted that Public sector banks are planning a common portal to offer competitive and instant personal, housing and retail loans to customers as a part of scaling up the government's financial inclusion drive. Oil & Gas sector stocks were amongst the top gainers amid a private report stating that Indian refiners are confident that US sanctions on Iran will not disrupt crude oil supplies because the global market has abundant supplies and numerous sellers.

On the global front, all the Asian markets were trading in fine fettle. After falling to fresh two-year lows on Thursday, shares in China rebounded on Friday. A move in China to reduce restrictions on foreign investment and open up the market helped to lift the index. Bach home, International Monetary Fund (IMF) suggested that the country should carry out banking sector reforms, continue with fiscal consolidation, simplify & streamline GST and renew impetus on reforms in order to sustain the high growth rate India has achieved. Besides, broader markets have gained strength as the BSE Small-cap index has surged by 1.41% and the Mid-cap index advanced by 1.38%.

The BSE Sensex is currently trading at 35256.48, up by 218.84 points or 0.62% after trading in a range of 35099.65 and 35271.20. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index soared 1.38%, while Small cap index up by 1.41%.

The top gaining sectoral indices on the BSE were Energy up by 1.97%, Capital Goods up by 1.94%, Metal up by 1.92%, Oil & Gas up by 1.86% and PSU up by 1.75%, while there were sectors on the losing front.

The top gainers on the Sensex were Tata Steel up by 2.67%, Bajaj Auto up by 2.46%, Reliance Industries up by 2.40%, Larsen & Toubro up by 1.97% and SBI up by 1.97%. On the flip side, Mahindra & Mahindra down by 1.13%, Indusind Bank down by 0.63%, Asian Paints down by 0.59%, Axis Bank down by 0.50% and HDFC Bank down by 0.37% were the top losers.

Meanwhile, Finance Secretary Hasmukh Adhia has said that the new Goods and Services Tax (GST) return forms would be rolled out from January 1 after successful beta-testing of the software. He also said that wrong input tax credit claims are a potential area of evasion in the new tax regime and one-to-one invoice matching is the key to checking evasion.  He noted that invoice matching has to happen in the GST system. Besides, he said “The only thing is the way we collect details about invoices is what matters. So in the new system of filing return we will have all the sales invoice being uploaded along with returns only for B2B. For B2C you don't need to give invoice wise details at all.”

Adhia further stated that while GST collection every month is about Rs 94,000 crore to Rs 1 lakh crore, the total tax liability discharged by businesses every month is Rs 5 lakh crore.  He said “But Rs 4 lakh crore of this liability is being discharged by way of input tax credit claims. Now you can understand what a scope (is) for improving our revenue if we streamline and if we have a check on input tax credit.” Moreover, he pointed out that the only place where there is a scope for tax evasion is in the area of claiming wrong ITC and that's an area which can be plugged by using technology. He said “Even if we make a 10 per cent difference in Rs 4 lakh crore by keeping an eye on them (wrong ITC claims), by having a one-to-one invoice matching, what an improvement in revenue collection can happen.”

Talking on scope for rationalisation of items in the 28 percent tax bracket, the Secretary said that that reducing the number of items in the tax slab would depend on revenue position of the government. He also noted that there are 50 items left in the highest tax slab and most of these items attract a cess as these are either demerit or luxury goods. Besides there are some construction and automobile items. He said “We have not still reached the magic number of Rs 1 lakh crore (revenue) every month consistently. We will have to keep watching our revenue and whenever there is a scope created for giving more concessions, then we can one by one or in batches we can start looking at those items.”

The CNX Nifty is currently trading at 10659.90, up by 70.80 points or 0.67% after trading in a range of 10612.35 and 10665.30. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.98%, GAIL India up by 3.29%, Tata Steel up by 2.65%, Bajaj Auto up by 2.49% and Titan up by 2.46%. On the flip side, Tech Mahindra down by 1.97%, Dr. Reddys Lab down by 1.94%, Mahindra & Mahindra down by 1.22%, Indusind Bank down by 0.77% and Asian Paints down by 0.71% were the top losers.

All the Asian counters were trading in green; Nikkei 225 increased 1.49 points or 0.01% to 22,271.88, Straits Times gained 21.84 points or 0.67% to 3,279.41, Hang Seng surged 368.69 points or 1.28% to 28,866.01, Taiwan Weighted jumped 162.30 points or 1.50% to 10,816.58, KOSPI advanced 10.63 points or 0.46% to 2,324.87, Jakarta Composite added 53.56 points or 0.94% to 5,720.88 and Shanghai Composite was up by 41.66 points or 1.47% to 2,828.56.