Key indices add gains Monday's morning deals

Indian equity benchmarks added some gains on Monday's morning deals boosted mainly by Realty, Telecom and Energy stocks. Traders took some support with Revenue Secretary Tarun Bajaj’s statement that Indian economy has not suffered as much this year amid the second wave of COVID-19 as compared to last year when there was complete lockdown. Giving two scenarios, he said if Rs 1.10 lakh crore GST is collected per month, the deficit in states’ revenue would be Rs 1.50 lakh crore. If Rs 1.15 lakh crore GST is collected monthly, then that deficit would be Rs 1.25 lakh crore. So since Rs 1.58 lakh crore would be borrowed this fiscal towards compensating states, the extra borrowing, over and above what is the shortfall this year, would be utilised to make good the shortfall in states’ revenue of previous years. Traders also took a note of Union Finance Minister Nirmala Sitharaman’s statement that compliance burden of small taxpayers and medium-sized taxpayers has been reduced and an amnesty scheme has been recommended for reducing late fee payable, to provide relief to small taxpayers. Investors also looked ahead to the release of GDP data for the March quarter along with the core sector data for April, due out later in the day for directional cues.

On the global front, Asian markets were trading mostly in red as tension between the U.S. and China climbed amid calls for a fresh probe into the origins of COVID-19 and China said its manufacturing activity grew at a slightly slower pace in May. Back home,  on the sectoral front, Steel Industry’s stocks remained in focus as India Ratings and Research (Ind-Ra) report stated that domestic steel consumption is likely to be low over 1Q FY22 quarter-on-quarter due to the second Covid wave but not at the low levels witnessed over 1Q FY21 when there was a complete shutdown of activities.

The BSE Sensex is currently trading at 51582.20, up by 159.32 points or 0.31% after trading in a range of 51179.94 and 51584.60. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.35%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Realty up by 1.22%, Telecom up by 1.07%, Energy up by 1.07%, FMCG up by 0.83% and Consumer Durables up by 0.79%, while Auto down by 0.64%, IT down by 0.24% and TECK down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.09%, Reliance Industries up by 1.63%, ICICI Bank up by 1.62%, Bharti Airtel up by 1.40% and Asian Paints up by 1.37%. On the flip side, Mahindra & Mahindra down by 5.68%, Sun Pharma down by 0.71%, Infosys down by 0.70%, Tech Mahindra down by 0.56% and HCL Technologies down by 0.49% were the top losers.

Meanwhile, revenue Secretary Tarun Bajaj has said that Indian economy has not suffered as much this year amid the second wave of COVID-19 as compared to last year when there was complete lockdown. Giving two scenarios, he said if Rs 1.10 lakh crore GST is collected per month, the deficit in states’ revenue would be Rs 1.50 lakh crore. If Rs 1.15 lakh crore GST is collected monthly, then that deficit would be Rs 1.25 lakh crore. So since Rs 1.58 lakh crore would be borrowed this fiscal towards compensating states, the extra borrowing, over and above what is the shortfall this year, would be utilised to make good the shortfall in states’ revenue of previous years.

Bajaj has stated that the Indian economy contracted 8 percent in the previous fiscal ended March 2021. Last month, the RBI retained its growth forecast at 10.5 per cent for the current financial year, while ADB projected a growth rate of 11 per cent. However, rating agencies have lowered growth forecasts for India, saying that the second wave of infections will hamper economic recovery. They, however, have estimated that the negative impact on economic output will be limited to the April-June quarter.

Revenue Secretary further said the Centre has estimated the shortfall in GST compensation payable to the states in the current fiscal at Rs 2.69 lakh crore, of which Rs 1.58 lakh crore would have to be borrowed this year. The Centre expects to collect over Rs 1.11 lakh crore through cess on luxury, demerit and sin goods which will be given to the states to compensate them for shortfall in revenue arising out of GST implementation. The remaining Rs 1.58 lakh crore would have to be borrowed to meet the promised compensation to states under the GST regime. In the last fiscal 2020-21, the Centre had borrowed on behalf of the states and released Rs 1.10 lakh crore to compensate them for the GST revenue shortfall. Another Rs 68,700 crore was collected by way of levy of cess.

The CNX Nifty is currently trading at 15502.55, up by 66.90 points or 0.43% after trading in a range of 15374.00 and 15508.80. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Divis Lab up by 2.94%, Reliance Industries up by 2.35%, ICICI Bank up by 2.11%, Bharti Airtel up by 1.78% and ITC up by 1.69%. On the flip side, Mahindra & Mahindra down by 5.69%, Adani Ports &SEZ down by 1.41%, Tata Motors down by 1.05%, Infosys down by 1.01% and Indian Oil Corporation down by 0.59% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 331.43 points or 1.14% to 28,817.98, Hang Seng decreased 145.56 points or 0.5% to 28,978.85, Straits Times trembled 16.83 points or 0.53% to 3,161.67 and Shanghai Composite declined 7.17 points or 0.2% to 3,593.61.

On the flip side, KOSPI rose 6.23 points or 0.2% to 3,194.96, Jakarta Composite soared 47.17 points or 0.81% to 5,895.79 and Taiwan Weighted strengthened 91.55 points or 0.54% to 16,962.41.