Indian markets maintain upward momentum

Indian equity markets maintained their upward momentum in the early noon session following gains in Power, Utilities and Capital Goods stocks. Healthy buying was observed in blue-chip stocks like Yes Bank, Tata Steel and NTPC. Besides, broader indices were also trading in green, supporting their larger peers. Investors took support with the Reserve Bank of India’s (RBI) statement that it will inject Rs 15,000 crore into the financial system next month through purchase of government bonds via the auction route. The decision has been taken in view of the evolving liquidity situation. Sentiment also got a boost with industry body Ficci’s President Sandip Somany’s statement that India should cut interest rates further and adopt consistent policies for the export of agricultural produce to enable Indian exporters to take advantage of the current US-China trade war. In scrip specific development, shares of  Capacite Infraprojects edged up on receiving maiden order from Alyssum Developers part of Market City Resources for a contract value of Rs 170.40 crore (excluding GST).

On the global front, Asian markets were trading mixed with persistent concerns that the China-US trade conflict was fast turning into a technology cold war between the world’s two largest economies. Back home, India's coal import increased by 13.4 percent to 20.72 million tonnes (MT) in April compared to 18.27 million tonnes (MT) in the same last year. Of the total imports during April 2019, non-coking coal or thermal coal shipments were at 15.08 MT.

The BSE Sensex is currently trading at 39660.89, up by 226.17 points or 0.57% after trading in a range of 39353.16 and 39669.99. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.85%, while Small cap index was up by 1.49%.

The top gaining sectoral indices on the BSE were Power up by 2.64%, Utilities up by 2.45%, Capital Goods up by 2.16%, Industrials up by 1.85% and Basic Materials was up by 1.83%, while Telecom down by 0.56% and Energy was down by 0.26% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.10%, Tata Steel up by 3.73%, NTPC up by 3.64%, Larsen & Toubro up by 2.42% and SBI was up by 1.68%. On the flip side, Bharti Airtel down by 1.39%, Asian Paints down by 1.12%, Indusind Bank down by 0.92%, Bajaj Auto down by 0.72% and Reliance Industries was down by 0.71% were the top losers.

Meanwhile, in a major relief for exporters, a single authority for sanctioning and processing Goods and Services Tax (GST) refunds is in the offing as the Finance Ministry looks to speed up and simplify the process for exporters. The current mechanism entails a twin refund sanctioning authority of the central and state tax officers but that could well change by August when the proposed new structure involving a single authority comes in place.

As per the system being worked out by the Revenue Department, the taxpayer will get full refund from his jurisdictional officer once the claim is sanctioned, while at the back-end the Centre and states will apportion the amount to be paid to each other. Currently, once a taxpayer files refund claim with the jurisdictional tax authority, then he would clear 50 per cent of the claims, and the remaining is cleared by the state tax officers after further scrutiny. A similar system is followed when a taxpayer approaches the state tax officers for GST refunds. Thus, the time taken to clear the entire refund amount gets longer, leading to liquidity crunch for exporters - an issue that the proposed single mechanism for refund clearing intends to fix.

Under the proposed ‘single authority mechanism’, once a refund claim is filed with a tax officer, whether Centre or state, the officer will check, assess and sanction full tax refund both Central GST and State GST portion, thereby removing difficulties faced by the taxpayers. This will later get adjusted/settled amongst the two tax authorities through internal account adjustments. Currently, the two authorities settling the same refund claims adds to unnecessary complexities and inconvenience for the taxpayers.

The CNX Nifty is currently trading at 11909.20, up by 65.10 points or 0.55% after trading in a range of 11812.40 and 11912.75. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.18%, Tata Steel up by 3.72%, NTPC up by 3.68%, Grasim Industries up by 2.85% and Cipla was up by 2.52%. On the flip side, Bharti Airtel down by 1.40%, Tech Mahindra down by 1.39%, JSW Steel down by 1.32%, Zee Entertainment down by 1.26% and Asian Paints was down by 1.08% were the top losers.

Asian markets were trading mixed; Taiwan Weighted strengthened 5.85 points or 0.06% to 10,334.13, Shanghai Composite gained 31.17 points or 1.09% to 2,884.16, Jakarta Composite soared 44.59 points or 0.74% to 6,101.94 and Nikkei 225 was up by 67.69 points or 0.32% to 21,184.91.

On the other hand, Hang Seng decreased 25.85 points or 0.09% to 27,328.08, KOSPI fell 2.38 points or 0.12% to 2,042.93 and Straits Times was down by 9.90 points or 0.31% to 3,159.99.