Local equities continue firm trade

Local equity benchmarks continued their firm trade in morning session, with gains of around one third of a percent. Traders remained optimistic with Commerce and Industry Minister Suresh Prabhu’s statement that India's exports would register healthy growth rates in the coming months and are expected to touch $350 billion in 2018-19. He also stated that services sector is set to become a dominant driver of the Indian economy and will contribute $3 trillion to the GDP by 2025. Trader took note of a private report that the demand for credit from companies in the manufacturing and services sectors is moving up, in tandem with economic growth showing clear signs of gathering steam. The working capital has a major share in this higher demand, corporates are also beginning to seek credit for creating new capacities and to finance acquisitions.

On the global front, Asian markets were trading mixed, taking leads from gains on Wall Street after US President Donald Trump and European Commission President Jean-Claude Juncker agreed to work toward eliminating trade barriers on industrial goods. On the sectoral front, PSU Bank index surged over 4% on NSE, as the government is looking at setting up an asset management company to help banks sell non-core assets including real estate. The government wants state-run banks to sell these non-core assets to beef up capital. Back home, in scrip specific development, NTPC gained on planning to raise Rs 12,000 crore via NCDs. Besides, Blue Star soared with its arm bagging order worth Rs 100 crore from UPMHS.

The BSE Sensex is currently trading at 36957.29, up by 99.06 points or 0.27% after trading in a range of 36894.82 and 37014.65. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.69%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were PSU up by 1.18%, Basic Materials up by 0.80%, Bankex up by 0.77%, Realty up by 0.57% and FMCG was up by 0.46%, while Metal down by 0.33%, TECK down by 0.31%, IT down by 0.27% and Capital Goods was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.89%, Tata Motors - DVR up by 1.24%, Tata Motors up by 1.01%, Bharti Airtel up by 0.99% and ITC was up by 0.86%. On the flip side, Asian Paints down by 1.14%, Larsen & Toubro down by 0.91%, Wipro down by 0.82%, Hero MotoCorp down by 0.51% and Kotak Mahindra Bank was down by 0.44% were the top losers.

Meanwhile, Minister of State for Civil Aviation Jayant Sinha has said that there was no proposal to bring Aviation Turbine Fuel (ATF) under goods and services tax (GST), despite there is a demand from airlines for inclusion of aviation turbine fuel in new tax regime. ATF constitutes approximately 35-40% of operational cost of an airline in India. Airlines, which are making a persistent demand for this, maintain that they would get an annual relief of Rs 3,000 to Rs 5,000 crore if ATF is included in GST.

Earlier, Civil Aviation Minister Suresh Prabhu had said the move will help cut the cost as airlines would get input tax credit. He stated that ‘We are very keen. I am pursuing this with the GST council that it (ATF) is brought under the purview of the GST, then off course (we can get) input tax credit and as a result of which, cost of aviation will go down’.

Besides, civil aviation secretary R.N. Choubey had said that the matter will be taken up with the finance ministry as jet fuel prices have risen 40% since January, 2017. Additionally, since January 2017 - May 2018, the rise in global crude oil prices has pushed ATF cost by 40%. ATF has been subject to an excise duty of 14% and on top to this, state governments impose a value-added tax (VAT), which varies from 4-30%.

The CNX Nifty is currently trading at 11163.35, up by 31.35 points or 0.28% after trading in a range of 11129.85 and 11172.20. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were SBI up by 3.84%, Indiabulls Housing Finance up by 2.76%, Ultratech Cement up by 2.67%, Eicher Motors up by 2.60% and Grasim Industries was up by 1.51%. On the flip side, Tech Mahindra down by 1.37%, Asian Paints down by 1.05%, Wipro down by 0.89%, Larsen & Toubro down by 0.79% and Bharti Infratel was down by 0.73% were the top losers.

Asian market were trading mixed; Straits Times surged 3.06 points or 0.09% to 3,329.89, Jakarta Composite gained 13.94 points or 0.23% to 5,947.83, KOSPI strengthened 16.04 points or 0.7% to 2,289.07 and Taiwan Weighted was up by 18.32 points or 0.17% to 10,984.11.

On the other side, Nikkei 225 slipped 40.40 points or 0.18% to 22,573.85, Hang Seng fell 235.86 points or 0.82% to 28,685.04 and Shanghai Composite was down by 18.36 points or 0.64% to 2,885.29.