Local bourses continue to trade higher in afternoon deals

Key benchmark indices continued to trade higher in afternoon session on the back of firm trend in the global markets coupled with sustained buying by domestic institutional investors. Sentiments remained upbeat with report that the Reserve Bank of India (RBI) has relaxed the leverage ratio (LR) for banks to help them boost their lending activities. The leverage ratio stands reduced to 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for other banks effective from the quarter commencing October 1, 2019. Some support also came with report that foreign investors infused a net amount of Rs 10,384. Market participants overlooked monthly survey showing that the Indian manufacturing sector growth moderated in June, largely owing to softer increase in new work intakes, which in turn translated into slower rises in output and employment. The IHS Markit India Manufacturing Purchasing Managers' Index (PMI) was at 52.1 in June, down from May's three-month high of 52.7, indicating a slight setback in the Indian manufacturing sector. On the sectoral front, stocks related to chemical sector were in focus with private report stating that the ongoing trade war between US and China may prove beneficial to chemical manufacturers in India. It also stated that global firms in the chemical sector would soon eye procuring chemicals from Indian companies because of duty issues in China.

On the global front, Asian markets were trading mostly in green, on revived hopes for progress in trade negotiations between the U.S. and China after President Donald Trump met with China’s Xi Jinping at the Group of 20 Summit in Japan. Back home, the BSE Sensex is currently trading at 39673.03, up by 278.39 points or 0.71% after trading in a range of 39541.09 and 39704.97. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.32%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Realty up by 1.71%, Auto up by 1.35%, Healthcare up by 0.91%, Consumer Disc up by 0.72% and Bankex was up by 0.67%, while Oil & Gas down by 1.42%, PSU down by 0.93%, Utilities down by 0.62%, Power down by 0.38% and Metal was down by 0.23% were top the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.04%, Tata Motors - DVR up by 2.95%, Bajaj Auto up by 2.27%, Hero MotoCorp up by 1.91% and HDFC was up by 1.87%. On the flip side, ONGC down by 3.58%, HCL Tech. down by 0.80%, NTPC down by 0.67%, Power Grid down by 0.43% and Vedanta was down by 0.32% were the top losers.

Meanwhile, on the second anniversary of Goods & Services Tax (GST) on July 1, the finance ministry will come up with some reforms in the indirect tax regime including new return system, rationalisation of cash ledger system and a single refund-disbursing mechanism, among others. It noted that GST is a game changer for the Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology-driven tax regime.

The ministry will introduce the new return system on a trial basis from July 1 and on mandatory basis from October 1. It also said that with regards to single cash ledger, the government will rationalise the ledger in such a manner that earlier 20 heads are merged into 5 major heads. There is only one cash ledger for tax, interest, penalty, fee and others. It noted that a single refund-disbursing mechanism will come into play wherein the government which sanctions refund disburses all four major heads of refunds namely CGST, SGST, IGST and cess.

According to the ministry, threshold limit of Rs 40 lakh is offered of suppliers of goods as per the choice of states. It also said that introduction of composition scheme for small service providers up to an annual turnover of Rs 50 lakh with a tax rate of 6 percent, electronic invoicing system in a phase-wise manner for B2B transactions is proposed to be introduced and GST Appellate Tribunals are being established at various state headquarters and area benches also.

The CNX Nifty is currently trading at 11857.40, up by 68.55 points or 0.58% after trading in a range of 11830.80 and 11875.10. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 3.22%, Tata Motors up by 3.05%, Indiabulls Housing Finance up by 2.52%, Bajaj Auto up by 2.28% and Eicher Motors was up by 2.04%. On the flip side, ONGC down by 3.87%, Indian Oil Corporation down by 2.95%, BPCL down by 2.20%, Coal India down by 1.71% and HCL Technologies was down by 1.01% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 454.05 points or 2.13% to 21,729.97, Taiwan Weighted strengthened 164.63 points or 1.53% to 10,895.46, Shanghai Composite gained 63.55 points or 2.13% to 3,042.43, Straits Times advanced 48.27 points or 1.45% to 3,369.88 and Jakarta Composite soared 27.65 points or 0.43% to 6,386.28.

On the flip side, KOSPI was down by 0.88 points or 0.04% to 2,129.74.