Markets trade higher in early deals

Indian equity benchmarks made slightly positive start and are trading higher with gains of around quarter a percent each in early deals on Friday. The positive trade was led by gains in index heavyweights Infosys and ITC. Traders took encouragement with Finance Minister Nirmala Sitharaman’s statement that efforts will be made to further simplify Goods and Services Tax, and expressed hope that it will help in further improving India’s ranking in the World Bank’s ease of doing business index. Some support also came with report that notwithstanding global and domestic economic uncertainties, private equity funds recorded an all-time-high investment of $9.4 billion in the third quarter this year, driven by big-ticket transactions. Traders took note of Director of Development Economics at the World Bank Simeon Djankov’s statement that India needs a fresh set of bold reforms in the next three to four years if it wants to be among the top 50 countries with ease of doing business. Though, upside remained capped with report that the government might be impelled to steeply cut its direct tax collection target, with growth in this regard slumping to 3.5 per cent up to mid-October from the same period in the earlier financial year, as against the Budget target of 17.3 per cent.

On the global front, Asian markets were trading mostly in red following the mixed cues overnight from Wall Street amid continued uncertainty over Brexit and the US-China trade tensions. Investors also turned cautious following the release of Amazon.com's earnings results that showed the e-commerce giant's first quarterly profit drop in more than two years. Investors are also cautious as they digested news that Japan's Trade Minister Isshu Sugawara has resigned, following allegations of election law violations.

Back home, telecom stocks were in focus as the Supreme Court rejected telecom companies' appeal against the government's definition of adjusted gross revenue (AGR) and allowed the Department of Telecommunications (DoT) to recover dues worth Rs 1.33 lakh crore from telecom companies - Bharti Airtel, Reliance Communications (RCom) and Vodafone Idea. In scrip specific development, ITC gained on reporting better than expected earnings. The company reported a 36.16% jump in its September quarter standalone profit, beating Street estimates. Net profit of the company rose from Rs 2,954.67 crore in the year-ago period to Rs 4,023.10 crore in the three months ended September 30.

The BSE Sensex is currently trading at 39148.05, up by 127.66 points or 0.33% after trading in a range of 39007.06 and 39241.61. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.37%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were IT up by 0.60%, Bankex up by 0.59%, FMCG up by 0.54%, PSU up by 0.53% and Oil & Gas was up by 0.50%, while Telecom down by 2.97%, Power down by 0.43%, Realty down by 0.24%, Utilities down by 0.21% and Healthcare was down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.31%, SBI up by 2.07%, ITC up by 1.93%, ICICI Bank up by 1.42% and Bajaj Finance up by 0.92%. On the flip side, Tech Mahindra down by 1.89%, Bharti Airtel down by 1.87%, HCL Technologies down by 1.21%, ONGC down by 1.14% and NTPC down by 1.12% were the top losers.

Meanwhile, expressing optimism over improvement in India’s business ranking, Finance Minister Nirmala Sitharaman has said efforts will be made to further simplify Goods and Services Tax (GST). She added that it will help in further improving India’s ranking in the World Bank’s (WB) ease of doing business index. India has jumped 14 places to rank 63rd out of 190 countries in the WB’s Doing Business 2020 report on account of significant improvement in resolving insolvency and obtaining construction permits. The other parameters where the country has done well include trading across borders, registering property, paying taxes, getting electricity connections and starting a business. However, the improvement in the remaining three parameters - getting credit, protecting minority investors, enforcing contracts - are not impressive.

The Minister said that the effort will be now to achieve the target to reaching within top 50 rank. She added that as there is just one rank improvement in the parameter of starting a business, enough effort will be made to improve on this scale, as it is a ‘very critical’ in a cycle of an industry. She said ‘in GST, it is an ongoing process to understand where the difficulties are…We are also looking at what were the glitches in using online filing of returns. So, GST is an ongoing process in improving. Even now for the next meeting, as and when it happens, we want to make sure that several steps are taken to simplify compliance.’ On income tax front, she said ‘At this stage, there may not be much to say’.

Sitharaman further said from next year two more cities - Kolkata and Bengaluru - will be included in the preparation of the ranking index. Currently, the report covers Delhi and Mumbai. She said ‘till now two cities in India were covered all these years. For a large country and regional diversity being so distinct, we were impressing upon the World Bank that having just two cities may not be adequately representative. So, from the coming year Kolkata and Bengaluru will be added to the list of cities.’  With this, the World Bank will take views of industry from these two cities while formulating the ranking index. She said that ‘there is a significant jump in the parameter of resolving insolvency, but that does not make me complacent’.

The CNX Nifty is currently trading at 11605.50, up by 22.90 points or 0.20% after trading in a range of 11568.20 and 11646.90. There were 22 stocks advancing against 27 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Infosys up by 2.25%, SBI up by 2.06%, ITC up by 1.95%, BPCL up by 1.92% and Eicher Motors up by 1.39%. On the flip side, Bharti Infratel down by 6.63%, Tech Mahindra down by 1.99%, Bharti Airtel down by 1.48%, Grasim Industries down by 1.42% and Dr. Reddy’s Laboratories down by 1.37% were the top losers.

Asian markets were mostly trading in red; Hang Seng decreased 119.03 points or 0.44% to 26,678.92, Taiwan Weighted dropped 30.21 points or 0.27% to 11,289.93, Jakarta Composite lost 27.59 points or 0.44% to 6,312.06, KOSPI fell 1.36 points or 0.07% to 2,084.30 and Shanghai Composite declined 0.31 points or 0.01% to 2,940.6. On the flip side, Nikkei 225 surged 11.20 points or 0.05% to 22,761.80 and Straits Times was up by 14.65 points or 0.46% to 3,183.52.