Firm trade persists on Dalal Street

Key barometer gauges continued their firm trade in afternoon session, with the S&P BSE Sensex hit the 37,000-mark for the first time and NSE’s Nifty 50 also touched an all-time high, driven by strong buying by domestic investors amid firm global cues. The sentiments remained positive 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 said that services sector is set to become a dominant driver of the Indian economy and will contribute $3 trillion to the GDP by 2025. The domestic sentiment was also buoyed with the global rating agency Moody’s Investor Service’s statement that the fund infusion in five weak public sector banks will be credit positive and strengthen their capitalization. Moreover, short-covering of bets, today being the last session of July expiry in the derivatives segment, and strengthening rupee against the dollar, too lifted the mood. On the sectoral front, steel sector remained in focus after a recent study by ratings agency India Ratings and Research stating that prices of steel-making raw materials are likely to move in a narrow range during the financial year 2018-19 due to increased supply pressure from major producing countries. Besides, shares of public sector banks have rallied by up to 5% on the National Stock Exchange (NSE), after Canara Bank reported a net profit of Rs 2.81 billion in June quarter (Q1FY19) on the back of higher net interest income (NII).

On the global front, Asian markets trade mostly in green, taking comfort from gains on Wall Street after U.S. President Donald Trump and European Commission President Jean-Claude Juncker agreed to work toward eliminating trade barriers on industrial goods. Back home, the BSE Sensex is currently trading at 37007.70, up by 149.47 points or 0.41% after trading in a range of 36894.82 and 37026.18. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index up by 0.37%.

The top gaining sectoral indices on the BSE were PSU up by 1.78%, Bankex up by 1.24%, Utilities up by 0.93%, Auto up by 0.65% and Oil & Gas up by 0.63%, while Metal down by 0.55%, Capital Goods down by 0.53%, TECK down by 0.43% and IT down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 5.01%, ICICI Bank up by 3.53%, Tata Motors up by 1.59%, Power Grid up by 1.42% and Bharti Airtel up by 1.19%. On the flip side, Asian Paints down by 1.53%, Larsen & Toubro down by 1.36%, Kotak Mahindra Bank down by 1.09%, Wipro down by 0.62% and Infosys down by 0.41% were the top losers.

Meanwhile, outgoing Chief Economic Adviser (CEA) Arvind Subramanian has expressed confidence that the highest, 28 percent, tax slab under the Goods and Services Tax (GST) may become virtually a hollow shell over the next year or so. Over the last one year, the GST Council, chaired by Union Finance Minister and comprising state ministers, has pruned the 28 percent slab by cutting tax rates on 191 goods, leaving just 35 items, including AC, digital camera, video recorders, dishwashing machine and automobiles, in the highest tax bracket. 

Subramanian has said that when the 28 percent tax rate was imposed on certain items under GST, there was a political reaction against it, and the GST Council responded by ‘really whittling down...quite substantially’ the number of products in that slab. He also said that a lot of effort and time was devoted to the simplifying the burden on small and medium enterprises.

CEA stressed on the need to get talent from everywhere outside the government or outside the country as well. He said ‘You need specific expertise. I think the lateral entry is a good thing. Government needs more talent than silicon valley’.

The CNX Nifty is currently trading at 11171.30, up by 39.30 points or 0.35% after trading in a range of 11129.85 and 11179.60. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were SBI up by 4.76%, Eicher Motors up by 3.60%, ICICI Bank up by 3.35%, Indiabulls Housing Finance up by 2.31% and Ultratech Cement up by 2.25%. On the flip side, Hindalco down by 2.30%, Tech Mahindra down by 1.75%, Asian Paints down by 1.60%, Larsen & Toubro down by 1.55% and Kotak Mahindra Bank down by 1.24% were the top losers.

Asian markets trade mostly in green; Jakarta Composite increased 12.98 points or 0.22% to 5,946.87, Straits Times rose 6.50 points or 0.2% to 3,333.33, Taiwan Weighted surged 44.82 points or 0.41% to 11,010.61 and KOSPI was up by 16.03 points or 0.7% to 2,289.06.

On the flip side, Hang Seng decreased 231.06 points or 0.81% to 28,689.84, Nikkei 225 dipped 27.38 points or 0.12% to 22,586.87 and Shanghai Composite was down by 24.78 points or 0.86% to 2,878.87.