Benchmarks trade in fine fettle in early deals

After making a cautious start, Indian equity benchmarks have gained grounds and are trading in fine fettle in early deals on Monday, as traders reacted positively to the outcome of the no-confidence motion as the day progresses. The Narendra Modi government comfortably defeated the no-confidence motion in the Lok Sabha on Friday. Traders took some support with a private report that the 10 major economies of Asia, including India, are expected to see robust growth and amount to over $28 trillion in real GDP terms on aggregate, more than the US by 2030. Some support also came with retirement fund body EPFO’s payroll data suggesting that as many as 4,474,859 jobs created during September 2017 to May this year. Meanwhile, the GST Council announced the reduction of rates on a list of 100 items, including sanitary pads, small TVs and footwear.

On the global front, Asian markets are exhibiting mixed trend at this point of time on fears of more protectionist measures from the United States while the dollar declined against major currencies after US President Donald Trump criticised the Federal Reserve’s tightening policy. The US markets ended lower on Friday, as White House comments on monetary policy sent the dollar and government bond prices sliding.

Back home, industry chamber CII said that the decision of the GST Council to cut rates and simplification of return filing process will increase the compliance rate and add to revenue buoyancy. Steel sector stocks edged lower with the Joint Plant Committee’s latest report stating that India’s export of finished steel slumped by 33.7% to 1.351 million tonnes (MT) during the first quarter of the current fiscal. The country had exported 2.037 MT finished steel during the same quarter a year ago. In scrip specific developments, Tata Steel gained on planning to increase India’s revenue share to 91% and JMC Projects edged higher on securing orders worth Rs 556 crore.

The BSE Sensex is currently trading at 36596.78, up by 100.41 points or 0.28% after trading in a range of 36491.83 and 36623.65. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.65%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were FMCG up by 1.77%, Telecom up by 1.35%, Utilities up by 0.90%, Basic Materials up by 0.88% and Capital Goods was up by 0.87%, while Auto down by 0.44% and Energy was down by 0.25% were the only losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.16%, Asian Paints up by 3.04%, Adani Ports up by 2.41%, Bharti Airtel up by 2.13% and NTPC was up by 1.90%. On the flip side, Hero MotoCorp down by 2.44%, Wipro down by 2.14%, Bajaj Auto down by 2.09%, HDFC Bank down by 1.28% and Reliance Industries was down by 0.93% were the top losers.

Meanwhile, a day after the all-powerful Goods and Services Tax (GST) Council decided to cut tax rates and simplification of return filing process, the industry body, Confederation of Indian Industry (CII) has said this decision will increase the compliance rate and add to revenue buoyancy. It added that this will greatly benefit trade and industry. It also said that the government and GST Council have been responsive and proactive to the requirements of trade and industry since the very roll out of GST, which has made its implementation the shortest period of adjustment as compared to other countries.

The industry chamber said raising the limit for composition scheme from Rs 1 crore to Rs 1.5 crore, permitting composition dealers to supply services (other than restaurants) for up to a value not exceeding 10% of turnover in preceding financial year or up to Rs 5 lakh and other decisions shall particularly benefit the SME sector. GST Council also allowed businesses with turnover of up to Rs 5 crore to file quarterly returns -- a move which will benefit 93% of the GST registered taxpayers. However, they will have to pay taxes monthly. So far, businesses with turnover of up to Rs 1.5 crore were permitted to file returns quarterly.

Meanwhile, the GST council in its 28th meeting gave approval to cut tax rates on several products. GST rates on articles including consumer durables like smaller television sets, refrigerators, washing machines, paints and varnishes, lithium ion batteries, and more were brought down from 28% to 18%. The tax council rationalised rates on several other items too. The GST Council also exempted sanitary napkins from taxes under the GST regime.

The CNX Nifty is currently trading at 11046.55, up by 36.35 points or 0.33% after trading in a range of 11010.95 and 11055.45. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were UPL up by 5.98%, Asian Paints up by 3.04%, ITC up by 2.99%, Adani Ports up by 2.46% and Bharti Airtel was up by 2.35%. On the flip side, Hero MotoCorp down by 2.55%, Wipro down by 2.07%, Bajaj Auto down by 2.07%, Titan Co down by 1.55% and HDFC Bank was down by 1.24% were the top losers.

Asian markets are trading mixed; Taiwan Weighted gained 2.99 points or 0.03% to 10,935.10, Jakarta Composite jumped 37.02 points or 0.63% to 5,909.80, Hang Seng rose 41.74 points or 0.15% to 28,266.22 and Shanghai Composite was up 10.56 points or 0.37% to 2,839.83. On the flip side, Straits Times declined 13.30 points or 0.4% to 3,284.53, KOSPI shed 10.35 points or 0.45% to 2,278.84 and Nikkei 225 was down by 329.49 points or 1.47% to 22,368.39.