Post Session: Quick Review

Extending jubilation for second straight session, Indian equity benchmarks ended Monday’s trade with a gain of over half a percent, with Sensex hitting new lifetime high, while Nifty ending above its crucial 11,050 mark. Final hour surge in midcaps, PSU banks, metals as well as FMCG ensured that markets ended the session on a bullish note. After making a cautious start, markets gained traction and traded in fine fettle, 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. The street was also finding support from a report that the GST Council on July 21 reduced the tax rates on several items, including an array of white goods and consumer articles, and extended big compliance relief to taxpayers with new simplified returns and quarterly returns filing facility for 93% of the businesses registered for the tax.

Markets extended their upside in last hour of trade and were trading at intraday high points, as investors’ morale also remained upbeat 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.  Investors continued to take 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. Adding the confidence among investors, the steel ministry said that India’s steel exports to America are very low and hence the import tariff hike by the US will not pose any immediate threat to the domestic industry.

On the global front, Asian markets ended mixed, as jitters grew over a potential trade and currency war. European markets were trading in red in early deals on Monday, mimicking weaker trading in markets overseas. Back home, Steel sector stocks ended 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. However, Footwear stocks such as Bata India, Khadim India and Mirza International ended with decent gains, after the GST Council lowered GST rates on footwear below Rs 1,000 to Rs 5 percent from 18 percent earlier.

The BSE Sensex ended at 36703.80, up by 207.43 points or 0.57% after trading in a range of 36491.83 and 36749.69. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.26%, while Small cap index was up by 0.94%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.51%, FMCG up by 2.23%, Basic Materials up by 2.11%, Realty up by 2.05% and Metal up by 1.62%, while Energy down by 0.31% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Vedanta up by 4.49%, Adani Ports &SEZ up by 3.78%, ITC up by 3.77%, Bharti Airtel up by 3.47% and Maruti Suzuki up by 3.29%. (Provisional)

On the flip side, Hero MotoCorp down by 6.32%, Bajaj Auto down by 5.23%, Wipro down by 2.84%, HDFC Bank down by 1.60% and Reliance Industries down by 0.78% were the top losers. (Provisional)

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 ended at 11083.55, up by 73.35 points or 0.67% after trading in a range of 11010.95 and 11093.40. There were 33 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were UPL up by 15.92%, Vedanta up by 4.79%, Bajaj Finserv up by 4.17%, Bharti Airtel up by 3.89% and ITC up by 3.70%. (Provisional)

On the flip side, Hero MotoCorp down by 6.55%, Bajaj Auto down by 5.31%, Wipro down by 2.49%, Grasim Industries down by 1.96% and HDFC Bank down by 1.56% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 dipped by 27.33 points or 0.36% to 7,651.46, France’s CAC shed 23.23 points or 0.43% to 5,375.09 and Germany’s DAX was down by 13.25 points or 0.11% to 12,548.17.

Asian equity markets ended mixed on Monday after US President Donald Trump threatened to slap punitive tariffs on all Chinese imports and the Group of G20 finance ministers warned of increased risks to global economic growth. Trump's remarks criticizing the Federal Reserve for raising interest rates and accusations that the European Union and China are manipulating their currencies to gain on edge in global trade also weighed on markets. Japanese shares ended lower as the yen surged against the dollar on speculation the Bank of Japan (BoJ) might announce changes to its ultra-loose monetary policy. Meanwhile, Chinese shares ended higher as banking and industry sectors climbed, but a slump in healthcare shares amid a vaccine scandal capped the gains.