Key indices add gains amid firm global cues

Indian equity markets extended their gains in afternoon session on fresh buying by investors, amid a firm trend in Asian markets. Sentiments remained up-beat with Finance Minister Nirmala Sitharaman’s statement that the government is committed to the path of fiscal consolidation without compromising on public expenditure. She said several steps including enhancing investments in infrastructure, liberalisation in the foreign direct investment policy and lowering of corporate tax are being taken to make India a $5 trillion economy by 2024-25 as stated by government. The domestic sentiment was also buoyed with Commerce and Industry Minister Piyush Goyal’s statement that foreign direct investments (FDI) into the country grew 3 per cent to $6.95 billion in April. During 2018-19, the country recorded the highest-ever total FDI inflow of $64.38 billion, which is 6 per cent higher as compared to 2017-18. On the sectoral front, Pharma stocks were in focus with Ind-Ra in its latest report stating that the US-focused domestic pharmaceutical companies need to step up their regulatory compliance to secure impeccable status as dependable suppliers and provide the targeted return on the ongoing and planned research and development (R&D) and capital investments over the next decade.

On the global front, Asian markets were trading in green, after Federal Reserve Chair Jerome Powell reinforced prospects of a US interest rate cut later this month. Back home, the BSE Sensex is currently trading at 38791.57, up by 234.53 points or 0.61% after trading in a range of 38631.31 and 38793.63. 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 0.39%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Realty up by 1.55%, Metal up by 1.08%, Utilities up by 0.86%, Telecom up by 0.82% and Healthcare was up by 0.81%, while Consumer Durables down by 0.37%, Capital Goods down by 0.29% and Industrials was down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.72%, Hero MotoCorp up by 2.29%, Bajaj Finance up by 1.65%, Vedanta up by 1.37% and SBI was up by 1.31%. On the flip side, Bajaj Auto down by 2.26%, Tech Mahindra down by 1.78%, Yes Bank down by 1.72%, ICICI Bank down by 0.85% and Axis Bank was down by 0.55% were the top losers.

Meanwhile, CBDT Chairman Pramod Chandra Mody has said that the government’s direct taxes collection target of Rs 13.35 lakh crore for the current financial year (FY20) is difficult, but achievable. He also said that the government can only think of further lowering corporate tax rates once the exemptions and deductions in this sector are phased out.

Mody said “I am happy to say that the government in its wisdom was appreciative of that and they went by the actual collections which happened last year. And consequent to that the budget (collection target for direct taxes) has now been fixed at Rs 13.35 lakh crore.” He indicated that this translates to about 17.5 percent increase year-on-year. He noted that now, this current target has to be seen in the perspective of the historical growth rate in collections in the past three years. He said “this gives me lot of hope and confidence that we will be able to achieve the 17.5 percent growth that we are mandated to achieve. It would be a difficult task but not totally unachievable.”

CBDT Chairman further highlighted that the direct tax revenue collection has increased from Rs 6.38 lakh crore in FY 2013-14 to Rs 11.37 lakh crore in the FY 2018-19 i.e the direct tax collection has witnessed a rise of approximately 78%. Besides, he expressed hoped that the economy would do well and consequently the revenue collection will also do well with the kind of push that has been given to investment and growth in the latest budget.

The CNX Nifty is currently trading at 11572.85, up by 73.95 points or 0.64% after trading in a range of 11519.50 and 11576.00. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.74%, JSW Steel up by 3.43%, Indusind Bank up by 2.89%, Indiabulls Housing Finance up by 2.62% and Dr. Reddys Lab was up by 2.57%. On the flip side, Bajaj Auto down by 2.05%, Tech Mahindra down by 1.86%, Yes Bank down by 1.61%, Titan Company down by 0.84% and ICICI Bank was down by 0.72% were the top losers.

All Asian markets were trading in green; Taiwan Weighted strengthened 44.94 points or 0.42% to 10,843.42, Hang Seng increased 209.00 points or 0.74% to 28,413.69, Jakarta Composite soared 1.12 points or 0.02% to 6,411.80, Straits Times advanced 21.20 points or 0.63% to 3,361.62, KOSPI rose 21.80 points or 1.06% to 2,080.58, Shanghai Composite gained 0.18 points or 0.01% to 2,915.48 and Nikkei 225 was up by 110.05 points or 0.51% to 21,643.53.