Benchmarks trade in fine-fettle; Sensex above 38,100 mark

Snapping five-day losing streak, Indian equity benchmarks made optimistic start and are trading in fine-fettle in early deals on Thursday amid buying in beaten-down but fundamental strong stocks. Barring Oil & Gas index all other sectoral indices are trading higher on the BSE. Traders got encouragement with report that India improved its ranking in the global innovation index by five places to 52nd in 2019 from 57th position in the last year. Some support also came in with Revenue Secretary Ajay Bhushan Pandey’s statement that the revised direct tax target of Rs 13.35 lakh crore is realistic and achievable with the help of economic growth and exchange of data amongst various agencies and wings of the government. Traders took note of a private report indicating that the Centre is considering an option to raise $10 billion in one go from its first overseas bond sale as early as October. The government would prefer to sell yen or euro-denominated debt so as to offer lower yields.

Global cues also remained supportive with most of the Asian markets trading higher at this point of time following the record closing highs overnight on Wall Street amid gains by tech stocks. Besides, investors looking ahead to monetary policy decisions from the European Central Bank later today and the US Federal Reserve next week. Back home, in scrip specific development, Cipla surged with its arm -- Cipla USA Inc acquiring prescription drug ZEMDRI from Achaogen. Bharat Heavy Electricals (BHEL) gained on signing MoU with NTPC to set up a 800 MW Technology Demonstration Plant (TDP) in Chhattisgarh. However, Cox & Kings touched lower circuit limit after it defaulted on payment of commercial papers worth Rs 174 crore which were due on July 24. YES Bank witnessed selling pressure after ratings agency Icra downgraded the Bank’s long-term ratings on various bonds, while retaining a negative outlook.

The BSE Sensex is currently trading at 38103.25, up by 255.60 points or 0.68% after trading in a range of 37869.55 and 38110.63. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.76%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Telecom up by 1.93%, Healthcare up by 1.45%, Basic Materials up by 0.84%, TECK up by 0.76% and Power was up by 0.66%, while Oil & Gas was down by 0.11% was the only losing index on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.14%, Sun Pharma up by 1.83%, HDFC Bank up by 1.42%, Vedanta up by 1.18% and Power Grid Corporation up by 1.17%. On the flip side, Tata Motors down by 2.58%, Tata Motors - DVR down by 1.39%, Tech Mahindra down by 1.32%, Yes Bank down by 0.73% and Kotak Mahindra Bank down by 0.64% were the top losers.

Meanwhile, with the help of economic growth and exchange of data amongst various agencies and wings of the government, Revenue Secretary Ajay Bhushan Pandey has said that the revised direct tax target of Rs 13.35 lakh crore is realistic and achievable. He said “In the interim Budget direct tax target was Rs 13.80 lakh crore. Now we are saying Rs 13.35 lakh crore. It is a realistic statement. We are collecting data from various places, we feel that there will be an efficiency gain as tax collection depends on two things -- growth and efficency.”

Pandey also said “We have grown at 14% last year. This year we are having the data exchange GST, customs and various other authorities, info from banks, filing of returns, all these will give us efficiency gains including data in capital market, GST, banks, customs , e-filing of returns, export and import”. He further said there is a scope for bringing more people into the tax net. The Central Board of Direct Taxes (CBDT) will embark on faceless assessment for tax payers and required procedures are being put into place for this.

The government has re-calibrated and fixed the direct taxes collection target for this financial year at Rs 13.35 lakh crore. In the last revised estimates, the target for 2019-20 financial year was fixed as Rs 13.78 lakh crore which appeared to be unrealistic because it was showing an increase of almost 24% year-on-year. The CBDT made this submission while budget deliberations were going on. Consequently, the collection target for direct taxes has now been fixed at Rs 13.35 lakh crore and this translates to about 17.5% increase year-on-year.

The CNX Nifty is currently trading at 11345.25, up by 73.95 points or 0.66% after trading in a range of 11274.90 and 11347.95. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 5.05%, Cipla up by 3.64%, Indusind Bank up by 2.15%, Indiabulls Housing Finance up by 1.85% and Ultratech Cement up by 1.74%. On the flip side, Tata Motors down by 2.91%, Tech Mahindra down by 1.81%, Indian Oil Corporation down by 1.25%, Coal India down by 0.88% and BPCL down by 0.60% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 77.59 points or 0.36% to 21,787.16, Straits Times strengthened 8.60 points or 0.26% to 3,377.04, Hang Seng gained 75.53 points or 0.26% to28, 599.57, Jakarta Composite advanced 11.79 points or 0.18% to 6,396.78 and Shanghai Composite soared 8.62 points or 0.29% to 2,931.90. On the flip side, KOSPI declined 11.41 points or 0.55% to 2,070.89 and Taiwan Weighted was down by 9.70 points or 0.09% to 10,926.06.