Benchmarks trade jubilantly in early deals; Nifty reclaims 11,300 mark

Indian equity benchmarks made a gap-up opening and are trading jubilantly in early deals with frontline gauges recapturing their crucial 11,300 (Nifty) and 37,400 (Sensex) levels. Sentiments remained up-beat with a private report that India’s economic growth momentum is likely to pick up further in the April-June period and the country is expected to clock GDP growth of 7.5% in this financial year. Traders shrugged off International Monetary Fund’s latest report where it stated that Real interest rates in India may drop by more than 150 basis points over the next decade. It also said that a decline in the India’s dependent youth (those from ages 0-15 years) between 2020 and 2030 is expected to result in a reduction of long-term interest rates in the country. Investors also paid no heed towards former Reserve Bank Governor C Rangarajan’s statement the full implementation of recent hike in Minimum Support Prices (MSP) for some of the agricultural products may push financial system under stress.

Global cues remained supportive with Asian markets trading mostly in green at this point of time, despite an elevation in trade tensions between the US and China. The US markets ended mostly higher on Thursday, as investors eyeing the July US jobs report due later on Friday, which will give a reading on the health of the world’s largest economy and possible clues about the pace of Federal Reserve interest rate rises.

Back home, the trade ministry has said India plans to delay the imposition of retaliatory duties on US goods, to allow time to resolve disputes that worsened after President Donald Trump imposed tariff hikes on steel and aluminium. In scrip specific developments, Indiabulls Housing Finance surged on reporting 30% rise in Q1 consolidated net profit and JBM Auto gained on planning to raise funds via NCDs.

The BSE Sensex is currently trading at 37422.54, up by 257.38 points or 0.69% after trading in a range of 37319.61 and 37455.42. All the 31 stocks are trading in green on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.13%, while Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.39%, Utilities up by 1.20%, Metal up by 0.97%, Power up by 0.85% and PSU up by 0.84%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Yes Bank up by 1.80%, Vedanta up by 1.56%, HDFC up by 1.52%, Coal India up by 1.43% and Axis Bank up by 1.32%, while there were no losers on the Sensex.

Meanwhile, the Goods and Services Tax (GST) Implementation Committee’s Chairman Sushil Modi has said that the recent reduction in indirect tax rates on several items may lead to revenue shortfall in the next three-four months. Thought, he also said that in the long-run revenue collections will increase due to improvement in tax compliance.

Modi said the way GST is being implemented successfully, no States would require to be paid any compensation after three years.  He added that the revenue shortfall of manufacturing States was lower than the consuming ones despite GST being a destination-based tax. He also noted that small manufacturers, traders and service providers have been facing difficulty due to the new system.

Expressing hope of being able to achieve the monthly revenue target of Rs 1 lakh crore in the ‘not so distant future’, the Chairman said the GST Council could think of bringing the petroleum products under GST once the target is achieved. However, he added that there was ‘no guarantee’ that the prices of petroleum products would come down if these items were brought under the GST.

The GST Council had recently lowered rates on over 80-odd items, including footwear, refrigerator, washing machine and small screen TV; and had also rationalised rates on some services. In all, the rates on close to 450-odd items have been brought down in the last few months.

The CNX Nifty is currently trading at 11325.90, up by 81.20 points or 0.72% after trading in a range of 11294.55 and 11331.45. There were 46 stocks advancing against 3 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Indiabulls Housing up by 6.18%, GAIL India up by 2.37%, Vedanta up by 2.01%, Yes Bank up by 1.95% and Dr. Reddys Lab up by 1.91%. On the flip side, Tech Mahindra down by 0.93%, Bharti Infratel down by 0.09% and Grasim Industries down by 0.07% were the few losers.

Most of the Asian markets are trading in green; Nikkei 225 rose 24.04 points or 0.11% to 22,536.57, Taiwan Weighted increased 56.01 points or 0.51% to 10,985.78, KOSPI gained 12.95 points or 0.57% to 2,283.15 and Shanghai Composite was up by 2.12 points or 0.08% to 2,770.14.

On the flip side, Straits Times shed 6.68 points or 0.2% to 3,279.64, Jakarta Composite decreased 12.88 points or 0.21% to 5,998.84 and Hang Seng was down by 35.00 points or 0.13% to 27,679.56.