Local equities erase losses to turn positive in morning deals

Local benchmarks erased all the losses to turn positive in morning session, with Sensex and Nifty trading tad above the neutral lines. Yes Bank, Power Grid and Infosys were the prime gainers among heavy-weights, pushing the Sensex higher. Traders took some encouragement from a report that the government has set a target of adding 1.3 crore income tax filers in the current financial year against 1.1 crore new filers last year. However, gains remain capped with EAC-PM member Rathin Roy’s statement that the government to issue a white paper on medium-term fiscal framework, arguing that it would be difficult to meet the Budgetary tax collection target for 2019-20. He also stated his reservations over the government’s decision to start raising a part of its gross borrowing programme from external markets in foreign currencies. Beside, a report stated that investments through participatory notes (P-notes) in the capital market slipped to Rs 81,913 crore in June after posting growth for the previous four months.

On the global front, Asian markets are trading mostly in green, as investors remain encouraged with trade developments, after the South China Morning Post reported US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin would travel to Beijing next week for renewed trade negotiations with China. Back home, Finance Ministry stated that flat owners will have to pay GST at 18 per cent if their monthly contribution to resident welfare association (RWA) exceeds Rs 7,500. As per the rules, RWAs are required to collect GST on monthly subscription charged from its members if such payment is more than Rs 7,500 per flat per month and the annual turnover of RWA by way of supply of services and goods exceeds Rs 20 lakh.

The BSE Sensex is currently trading at 38055.72, up by 24.59 points or 0.06% after trading in a range of 37917.52 and 38148.63. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.22%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Realty up by 1.24%, IT up by 1.21%, Consumer Durables up by 1.01%, TECK up by 0.96% and Power was up by 0.92%, while Telecom down by 0.58%, Auto down by 0.55%, Capital Goods down by 0.47%, Industrials down by 0.25% and Healthcare was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.47%, Power Grid up by 2.01%, Infosys up by 2.00%, Axis Bank up by 1.40% and Hero MotoCorp was up by 1.32%. On the flip side, HDFC down by 2.34%, Bajaj Auto down by 1.63%, HDFC Bank down by 1.37%, Maruti Suzuki down by 1.19% and Bharti Airtel was down by 0.90% were the top losers.

Meanwhile, the Economic Advisory Council to The Prime Minister’s (EAC-PM) member Rathin Roy has said the government should issue a white paper on its medium-term targets in the backdrop of a shortfall in tax revenue targets. He said it would be difficult to meet the budgetary tax collection target for current financial year (FY20).

He further said that according to the Budget document, the government aims to collect $370 billion as taxes in the current fiscal. He said ‘in my professional judgment, you will not able to tax as much as has been forecast in FY20 Budget. Therefore either you will have to borrow more or you will have to spend less.  He added ‘If you borrow more then it has implications for the overall economy, or you spend less then it also have implications.’

Besides, he also expressed his reservations over the government's decision to start raising a part of its gross borrowing programme from external markets in foreign currencies. Talking about government’s decision to go for overseas sovereign borrowing, he said that he thinks there are serious issues regarding loss of sovereignty. He mentioned ‘I don't simple argument that something which is cheaper is a good one. I pay very careful attention to the former RBI Governor Y V Reddy's opinion that these are sovereign liabilities to perpetuity’.

The CNX Nifty is currently trading at 11347.40, up by 1.20 points or 0.01% after trading in a range of 11315.95 and 11373.30. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.52%, Infosys up by 2.01%, Power Grid up by 1.96%, UPL up by 1.90% and Eicher Motors was up by 1.63%. On the flip side, HDFC down by 2.59%, Indiabulls Housing Finance down by 2.33%, Zee Entertainment down by 2.12%, Bajaj Auto down by 1.67% and HDFC Bank was down by 1.55% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 251.88 points or 1.18% to 21,668.67, Hang Seng increased 49.09 points or 0.17% to 28,420.35, KOSPI rose 9.70 points or 0.46% to 2,103.04, Straits Times advanced 8.74 points or 0.26% to 3,365.96 and Shanghai Composite was up by 1.96 points or 0.07% to 2,888.93.

On the other side, Taiwan Weighted dropped 1.22 points or 0.01% to 10,943.31 and Jakarta Composite was down by 26.96 points or 0.42% to 6,406.59.