Benchmarks end in green snapping three-day losing streak

Snapping three days losing streak, Indian equity benchmarks ended the Thursday’s trade in green terrain with frontline gauges recapturing their crucial 38,200 (Sensex) and 11,500 (Nifty) levels. Markets gained strength soon after their cautious start, as traders took encouragement with Finance Minister Arun Jaitley’s statement that there is no need to worry over the steep fall in the Indian rupee’s value against the US dollar as the inherent strength of the country’s economy will aid in arresting the downtrend. Some support also came with the Finance Ministry’s statement that Goods and Services Tax (GST) refunds can be claimed by simply submitting a printout of GSTR-2A form to tax authorities instead of giving all purchase invoices of a month. Traders also took note of the Securities and Exchange Board of India’s (SEBI) statement that it would review an order tightening rules on foreign funds ownership by entities of Indian origin, after some fund managers said it could lead to massive dollar outflows.

Markets pared all of their gains in noon deals to turn red, as Indian rupee touched a fresh record low of 72 against the US dollar amid concern that US President Donald Trump may order additional tariffs on China. This was the seventh consecutive fall, its longest losing streak since May 2016. However, selling proved short-lived and markets regained momentum to enter into green terrain, as market participants got some relief with private report that companies are willing to raise their staff level, and the pace of hiring is expected to be faster than last year, riding high on strong demand conditions. Optimism remained among the investors with a private report stating that Corporate India announced merger and acquisition (M&A) deals worth $34.8 billion during April-June this year, registering nearly 7-fold jump over the same period last year. Adding some comfort, Finance Ministry simplified GST refund claim process for businesses.

Positive opening in European counters too aided sentiments, as the euro area private sector expanded slightly more than initially estimated in August. The final data from IHS Markit showed that the composite output index rose to 54.5 in August from July's 54.3. Besides, UK services sector expanded at a faster pace in August on stronger new orders. As per survey data from IHS Markit, the IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index rose to 54.3 from 53.5 in July. Asian markets ended mostly lower on Thursday, on the back of ongoing concerns over emerging markets and potential new US tariffs on China.

Back home, steel sector stocks edged higher with ICRA’s report that sharp depreciation in the rupee is likely to help the domestic steel industry lower imports and boost exports in the coming months, which in turn may improve the country’s overall steel trade balance. Sugar sector stocks remained in sweet spot, as facing an unprecedented crisis of surplus production, the Indian sugar industry demanded the government hike the minimum sale price (MSP) of sugar to Rs 36 a kilo (kg), from the current Rs 29 and mandatorily fix a quota of export of 7 million tonnes (MT) for the 2018-19 season that starts from October. Shares of paper manufacturing companies remained in focus with West Coast Paper Mills, Star Paper Mills, Seshasayee Paper, Emami Paper, and Balkrishna Industries rallied on good demand outlook.

Finally, the BSE Sensex surged 224.50 points or 0.59% to 38,242.81, while the CNX Nifty was up by 59.95 points or 0.52% to 11,536.90.

The BSE Sensex touched a high and a low of 38,320.96 and 37,912.50, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.31%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.20%, Energy up by 2.12%, Power up by 1.21%, Oil & Gas up by 1.15% and Utilities was up by 1.01%, while Telecom down by 0.30%, Consumer Discretionary Goods & Services down by 0.16%, Consumer Durables down by 0.13% and TECK was down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.80%, Power Grid Corporation up by 2.21%, Coal India up by 2.05%, Sun Pharma up by 2.00% and Adani Ports & SEZ up by 1.70%. On the flip side, Yes Bank down by 1.42%, Maruti Suzuki down by 1.33%, Bharti Airtel down by 0.83%, ICICI Bank down by 0.45% and Asian Paints down by 0.28% were the top losers.

Meanwhile, reducing the compliance burden of companies, the Finance Ministry has said that Goods and Services Tax (GST) refunds can be claimed by simply submitting a printout of 'GSTR-2A' form to tax authorities instead of giving all purchase invoices of a month. GSTR-2A is a purchase-related tax return that is automatically generated for each business by the GST portal.

The ministry has said that the proper officer shall rely upon form GSTR-2A as an evidence of the account of the supply by the corresponding supplier in relation to which the input tax credit has been availed by the claimant. It also pointed out that there may be situations in which Form GSTR-2A may not contain the details of all the invoices relating to the input tax credit availed, possibly because the supplier's Form GSTR-1 was delayed or not filed. In such situations, it said that the proper officer may call for the hard copies of such invoices if he deems it necessary for the examination of the claim for refund.

The GST Policy Wing in the Ministry has said that the proper officer shall not insist on the submission of an invoice (either original or duplicate) the details of which are present in GSTR-2A of the relevant period submitted by the claimant. It further said that a few cases have come to notice where a tax authority, after receiving a sanction order from the counterpart tax authority (Centre or State), has refused to disburse the relevant sanctioned amount calling into question the validity of the sanction order on certain grounds.

The CNX Nifty traded in a range of 11,562.25 and 11,436.05. There were 30 stocks in green as against 20 stocks in red on the index.

The top gainers on Nifty were Reliance Industries up by 2.77%, Cipla up by 2.31%, Coal India up by 2.07%, NTPC up by 2.02% and Sun Pharma up by 1.92%. On the flip side, Zee Entertainment down by 2.44%, Hindalco down by 1.73%, Bajaj Finance down by 1.65%, Maruti Suzuki down by 1.59% and Indiabulls Housing Finance down by 1.42% were the top losers.

European markets were trading in green; UK’s FTSE 100 rose 3.03 points or 0.04% to 7,386.31, France’s CAC increased 12.69 points or 0.24% to 5,272.91 and Germany’s DAX was up by 7.66 points or 0.06% to 12,048.12.

Asian markets ended mostly lower on Thursday as renewed global trade tensions as well as emerging market woes kept investors in a defensive mode. A sharp fall in oil prices overnight also weighed on markets. Chinese shares ended lower on fears of additional tariffs as a public comment period on the possibility of fresh US tariffs on another $200 billion of Chinese goods ends today. Further, Japanese shares closed lower, with a firmer yen, an annual reshuffle of the Nikkei index and a powerful earthquake in Hokkaido, the latest in a series of natural disasters to hit the country this year keeping investors nervous.