Benchmarks trade marginally in green in early deals

Indian equity benchmarks have made a positive start and are trading with marginal gains in early deals on Friday ahead of the Index of industrial production (IIP) data for the month of November to be released later in the day. Traders took encouragement with report that the Goods and Services Tax (GST) Council approved a series of measures aimed at benefiting small businesses, such as a doubling of the exemption threshold to Rs 40 lakh and an increase in the turnover limit for service providers looking to avail of the low-compliance composition scheme. The higher turnover cap of Rs 1.5 crore, against the earlier Rs 1 crore, for availing composition scheme of paying 1 percent tax will be effective from April 01. Some support also came with Commerce Minister Suresh Prabhu’s statement that the government is considering providing transport subsidy to states for promoting agriculture exports. On credit issues being faced by exporters, he said, the financial services secretary would hold meeting with banks on the matter.

Global cues too remained supportive with Asian counters rallying at this point of time after Federal Reserve Chairman Jerome Powell reiterated the US central bank can be patient on raising interest rates further. The US markets ended higher on Thursday after Federal Reserve Chairman Jerome Powell reiterated the central bank’s willingness to adjust its pace of interest-rate increases if economic conditions weaken.

Back home, the Securities and Exchange Board of India (SEBI) announced portfolio concentration norms for equity exchange-traded funds (ETFs) and index funds. SEBI’s new guidelines are meant to address risks related to portfolio concentration in ETFs and index funds. According to the new norms, the index shall have a minimum of 10 stocks as its constituents. In scrip specific developments, Welspun Enterprises surged with its arm signing Concession Agreement and NBCC gained on securing Rs 187.90 crore business in December.

The BSE Sensex is currently trading at 36176.74, up by 70.24 points or 0.19% after trading in a range of 36118.16 and 36214.26. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were FMCG up by 0.76%, Metal up by 0.62%, Energy up by 0.61%, Oil & Gas up by 0.56% and Basic Materials up by 0.45%, while Telecom down by 1.08%, Realty down by 0.80%, IT down by 0.79%, TECK down by 0.79% and Capital Goods was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.61%, HDFC up by 1.21%, Sun Pharma up by 1.10%, ONGC up by 0.98% and HDFC Bank up by 0.59%. On the flip side, TCS down by 1.97%, Bharti Airtel down by 1.81%, HCL Tech down by 1.24%, Mahindra & Mahindra down by 0.85% and Larsen & Toubro down by 0.67% were the top losers.

Meanwhile, with an aim to give relief to small businesses, the all-powerful Goods and Services Tax (GST) Council has decided to double the limit for exemption from payment of GST to Rs 40 lakh from the earlier cap of Rs 20 lakh. It also decided that from the next fiscal year, businesses with annual turnover of Rs 1.5 crore will be able to pay GST at a fixed rate of their earnings under the composition scheme, while the current limit is Rs 1 crore. Besides, it allowed Kerala to levy a 1% calamity cess on intra-state sale of goods and services for a period of up to two years to mobilise revenues to meet the cost of rehabilitating parts of states that were ravaged by floods last year.

Finance Minister Arun Jaitley said the taxpayers with an aggregate turnover of Rs 40 lakh would now be exempted from the GST. For the north eastern states, the exemption would now be Rs 20 lakh. Currently, businesses with a turnover of up to Rs 20 lakh are exempt from GST registration, while the limit for hilly and north eastern states is Rs 10 lakh. He said the GST Composition Scheme, under which small traders and businesses pay a 1% tax based on turnover, can be availed by businesses with a turnover of Rs 1.5 crore, against the earlier Rs 1 crore, with effect from April 01, 2019. Also, service providers and suppliers of both goods and services up to a turnover of Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6%. He added that these decisions would give a relief to micro, small and medium enterprises (MSMEs).

The twin decision under the composition scheme would have an annual revenue impact of about Rs 3,000 crore. On GST rate for real estate, Jaitley said the council has decided for form a seven-member group of ministers after differences of opinion emerged at the meeting, and there were diverse views on lottery. A ministerial panel will look into it as well. He further said those opting for the composition scheme would have to file just one tax return annually but pay taxes once every quarter. He said there would be two thresholds -- Rs 40 lakh and Rs 20 lakh -- for exemption from registration and payment of the GST for the suppliers of goods, with the facility that one can 'opt up or opt down' depending on revenue.

The CNX Nifty is currently trading at 10840.85, up by 19.25 points or 0.18% after trading in a range of 10820.60 and 10850.15. There were 32 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.61%, ONGC up by 1.19%, HDFC up by 1.13%, Hindalco up by 1.10% and Indian Oil Corp. up by 1.00%. On the flip side, TCS down by 2.10%, Bharti Airtel down by 1.81%, HCL Tech down by 1.27%, Bharti Infratel down by 1.19% and Mahindra & Mahindra down by 0.89% were the top losers.

All the Asian markets are trading in green; Nikkei 225 jumped 185.63 points or 0.92% to 20,349.43, Straits Times rose 15.48 points or 0.49% to 3,198.99, Hang Seng rose 49.49 points or 0.19% to 26,570.92, Taiwan Weighted gained 39.32 points or 0.40% to 9,760.01, KOSPI increased 9.54 points or 0.46% to 2,072.82, Jakarta Composite added 15.03 points or 0.24% to 6,343.74 and Shanghai Composite was up by 2.88 points or 0.11% to 2,537.98.