Benchmarks trade at all-time highs; Nifty conquers 11,400 mark

Indian equity benchmarks made an optimistic start and are trading at all-time high levels with frontline gauges conquering their crucial 11,400 (Nifty) and 37,700 (Sensex) levels for the first time ever. Sentiments remained up-beat with the Confederation of Indian Industry’s (CII) statement that with the US imposing an additional 25% duty on imports worth $34 billion from China, certain Indian products may become more competitive. Traders also reacted positively to a report that the Goods and Services Tax (GST) Council headed by Finance Minister Piyush Goyal approved setting up of a group of ministers (GoM) to tackle taxation related issues faced by micro, small and medium enterprises (MSMEs). Traders also took note of Principal Economic Adviser to the Finance Ministry, Sanjeev Sanyal’s statement that GST slabs may come down to three in addition to the exempted category, in the long-term. He also said the three slabs could be a low of 5%, a central 15% (merging the 12% and 18% slabs that exist now) and a top rate of 25%.

Global cues too remained supportive with Asian markets trading mostly in green at this point of time, after China’s central bank took steps to try to drag the yuan away from 14-month lows. The People’s Bank of China late on Friday raised the reserve requirement on foreign exchange forward positions, making it more expensive to bet against the Chinese currency. The US markets ended higher on Friday, after a string of upbeat earnings, while traders digested the Labor Department’s data showing weaker than expected job growth in the month of July.

Back home, banking sector’s stocks edged higher with Reserve Bank of India’s (RBI) report that bank credit grew by 12.44% to Rs 86131.64 billion in the fortnight to July 20. In the year-ago period, bank credit had stood at Rs 76598.98 billion. The report showed that during the reporting fortnight, deposits increased by 8.15% to Rs 114381.21 billion from Rs 105756.15 billion a year ago. Stocks related to textile sector remained in lime-light with a report that the government is likely to hike import duty on about 300 textile products to boost domestic manufacturing and create employment opportunities.

The BSE Sensex is currently trading at 37738.01, was up by 181.85 points or 0.48% after trading in a range of 37699.37 and 37805.25. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.52%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.17%, Metal up by 1.06%, PSU up by 1.00%, Bankex up by 0.96% and Utilities was up by 0.68%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 2.62%, SBI up by 2.55%, Tata Steel up by 1.15%, Yes Bank up by 1.07% and Mahindra & Mahindra was up by 0.98%. On the flip side, Hindustan Unilever down by 0.83%, Kotak Mahindra Bank down by 0.66% and Infosys was down by 0.12% were the few losers.

Meanwhile, in order to further simplify the India’s tax regime, Principal Economic advisor to the Finance Ministry Sanjeev Sanyal has said that the Goods and Services Tax (GST) slabs may be brought down to three in the long-term, along with the exemption category. He added that the three slabs could be a low of 5 percent, the middle bracket of 15 percent (merging 12 percent and 18 percent slabs that exist now) and a top rate of 25 percent. Presently, there are four GST slabs of 5, 12, 18 and 28 percent, plus the exempted category which attracts zero percent GST.

Sanyal also said that the central rate of 15 percent will be applied for the bulk of goods. He said they are looking to have a simple tax rate with round figures and most of the goods with the same rate. He further said that as the tax system gets simplified, more and more people will be paying their taxes.

Principal Economic advisor added that the tax collection has significantly gone up since the introduction of GST and now a lot of people are paying direct taxes. He noted that so if the direct tax revenues continue to do well, the centre may further simplify the direct tax system, lower the rates and would ultimately move towards the corporate tax rate of 25 percent.

The CNX Nifty is currently trading at 11405.05, up by 44.25 points or 0.39% after trading in a range of 11394.65 and 11427.65. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 3.05%, UPL up by 2.78%, SBI up by 2.31%, Zee Entertainment up by 1.22% and Tata Steel was up by 1.06%. On the flip side, Hindustan Unilever down by 0.84%, Infosys down by 0.59%, Kotak Mahindra Bank down by 0.48%, Dr. Reddys Lab down by 0.40% and Power Grid was down by 0.21% were the top losers.

Asian market mostly traded in green, Jakarta Composite rose 67.95 points or 1.12% to 6,075.49, Straits Times surged 26.74 points or 0.81% to 3,292.47, Taiwan Weighted gained 2.30 points or 0.02% to 11,014.73, KOSPI advanced 7.10 points or 0.31% to 2,294.78, Nikkei 225 jumped 32.65 points or 0.14% to 22,557.83 and Hang Seng was up 193.75 points or 0.7% to 27,870.07.

On the other side, Shanghai Composite was down by 21.06 points or 0.77% to 2,719.38.