Local equities continue to show positive trend

Local equity benchmarks continued to show a positive trend in morning session, with Sensex and Nifty gaining more than 300 and 70 points, respectively. ITC, SBI, and Bharti Airtel are the top gainers, while Yes Bank, Adani Ports & SEZ, Power Grid and ONGC have lost the most. Sentiments remained upbeat with a private report that after almost a year and half of disruptions in Indian economy due to demonetisation and the Goods and Services Tax (GST), the consumer sentiment is up in the month of July on all fronts from jobs, investments, health of the economy to personal finance. The markets took support from a private report which stated that trading across borders, payment of indirect taxes and insolvency resolution are the three sets of reforms where India is upbeat, ahead of the release of the World Bank's ease of doing business report later this year. The domestic sentiments also remained upbeat with a private report that Goods and Services Tax Appellate Tribunal (GSTAT) will come into effect soon, providing a higher judicial forum for businesses to redress disputes under the new tax framework. Traders also remained optimistic with Minister of State for External Affairs V K Singh’s statement that there is scope for India and Vietnam to deepen cooperation in the oil and gas sector despite ‘all the troubles’ the Southeast Asian country faces. There was also great potential to enhance cooperation in the pharmaceutical and the healthcare sectors.

On the global front, Asian markets were trading mixed, following a mixed end to Wall Street trade and as the worsening Sino-US trade dispute kept investors in the region cautious. Back home, in scrip specific development, Cholamandalam Investment & Finance Company gains on getting nod to raise funds up to Rs 11,500 crore through issuance of Non-convertible Debentures. Besides, Hindalco Industries surged with arm inking agreement to acquire 100% control in Aleris Corporation.

The BSE Sensex is currently trading at 37312.59, up by 327.95 points or 0.89% after trading in a range of 37134.88 and 37325.62. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.60%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were FMCG up by 2.59%, Telecom up by 1.87%, Metal up by 1.32%, Bankex up by 1.07% and PSU up was by 0.89%, while there were no losing sectoral indices on BSE.

The top gainers on the Sensex were ITC up by 5.97%, SBI up by 3.23%, Tata Motors - DVR up by 2.77%, Bharti Airtel up by 2.63% and Axis Bank was up by 1.88%. On the flip side, Yes Bank down by 0.81%, Adani Ports & SEZ down by 0.70%, Power Grid down by 0.55%, ONGC down by 0.43% and Hindustan Unilever was down by 0.41% were the top losers.

Meanwhile, with an aim to protect the domestic industry, the Central Board of Indirect Taxes and Custom (CBIC) has said it would look into suggestions of hiking import duty on consumer durable items after the peak goods and services tax (GST) rate on a number of consumer durables was cut. The suggestions came in following the GST Council recently decided to lower tax rates on 17 categories of white goods, including smaller TV, fridge and washing machines. Rates have been lowered to 18% from 28%.

An imported item attracts customs duty as well as counter veiling duty (CVD) which is equal to GST. Since GST rates have come down, the imported items will also attract lower CVD and thus gap between domestic and imported good will reduce.

Besides, CBIC Chairman, S Ramesh stated the GST council cut rates on a host of items, which was decided on the basis on revenue neutrality and reduction of additional burden on taxpayers. Moreover, he underlined ‘the domestic industry has said it needs protection. We are looking into all the proposals that have come in’.

The CNX Nifty is currently trading at 11239.35, up by 72.05 points or 0.65% after trading in a range of 11210.25 and 11252.90. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were ITC up by 5.87%, Hindalco up by 4.12%, Bharti Airtel up by 2.82%, SBI up by 2.61% and Axis Bank was up by 2.33%. On the flip side, Dr. Reddy’s Lab down by 2.00%, Bajaj Finserv down by 1.92%, Grasim Industries down by 1.33%, Tech Mahindra down by 1.15% and BPCL was down by 1.12% were the top losers.

Asian markets were trading mixed; Jakarta Composite rose 17.84 points or 0.3% to 5,963.98, KOSPI gained 1.98 points or 0.09% to 2,291.04, Taiwan Weighted strengthened 43.39 points or 0.39% to 11,054.00 and Nikkei 225 was up by 70.16 points or 0.31% to 22,657.03.

On the other side; Straits Times declined 6.82 points or 0.21% to 3,321.78, Hang Seng slipped 67.06 points or 0.23% to 28,714.08 and Shanghai Composite was down by 1.72 points or 0.06% to 2,880.51.