Benchmarks trade flat in early deals after positive opening

Indian equity benchmarks made slightly positive start on Thursday. Soon, markets wiped out gains and turned volatile and are trading flat in early deals on account of selling in Metal, Realty and PSU stocks. Volatility came in on account of weekly F&O expiry today. Early support came in as Industry chamber PHDCCI called for a 3-tier GST rate structure, with the highest slab at 18 per cent, to help boost consumption and reduce evasion. Meanwhile, Spain has opened its doors to fully vaccinated Indians, joining France, Germany and Switzerland that did so a few weeks earlier. Delhi said it had recorded no death from Covid-19 in 24 hours; the fifth time it happened so in the second wave of the pandemic.

On the global front, Asian markets were trading mixed following the mixed cues overnight from Wall Street, on economic growth concerns, coronavirus woes and tumbling oil prices. There are renewed concerns about the pace of US economic growth after payroll processor ADP said private sector employment increased less than expected in July.

Back home, the Reserve Bank of India (RBI) gave banks time till October 31 to comply with its guidelines on current account and overdraft facilities, by which time banks must come to a resolution on the issue. In scrip specific development, Titan Company declined after it reported a whopping 97 percent fall in quarterly profit.

The BSE Sensex is currently trading at 54386.28, up by 16.51 points or 0.03% after trading in a range of 54243.97 and 54576.64. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.49%, while Small cap index was down by 0.91%.

The top gaining sectoral indices on the BSE were Telecom up by 0.85%, TECK up by 0.82%, IT up by 0.77%, Energy up by 0.09%, while Metal down by 0.97%, Realty down by 0.97%, PSU down by 0.87%, Utilities down by 0.87%, Power down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.39%, HCL Technologies up by 1.85%, Tech Mahindra up by 1.52%, Kotak Mahindra Bank up by 0.85% and TCS up by 0.69%. On the flip side, Indusind Bank down by 2.06%, Titan Company down by 1.21%, Tata Steel down by 1.16%, Mahindra & Mahindra down by 1.03% and Bajaj Finance down by 0.85% were the top losers.

Meanwhile, in order to help boost consumption and reduce evasion, industry chamber PHDCCI has called for a 3-tier GST rate structure, with the highest slab at 18 per cent. Under the Goods and Services Tax (GST), a four-rate structure that exempts or imposes a low rate of tax 5 per cent on essential items and top rate of 28 per cent is levied. The other slabs of tax are 12 and 18 per cent. Besides, a 3 per cent rate is applied on gold, silver and processed diamonds.

PHDCCI President Sanjay Aggarwal said an ideal GST rate structure would be to have two to three slabs of GST rates. He said ‘We suggest the lowest rate at 5 per cent, a moderate rate of 12 per cent, by clubbing the category of 12 and 18 per cent, and the highest rate of 18 per cent for luxury and sin goods only.’ This rationalisation of rates will increase consumption and tax revenue, reduce compliances, reduce tax evasion and help to make GST as good and simple tax, as simplified tax regime is the need of hour to reduce litigation pertaining to tax matters.

This will also lead to removal of hardships and provide ease of doing business and compliance among taxpayers. Further, he said that the government had rationalised GST rates in the 28 per cent slab category and taking out about 200 items from the highest slab and putting in either 18 or 12 per cent. Still products such as air conditioners, and cements are charged at 28 per cent GST.

The CNX Nifty is currently trading at 16248.95, down by 9.85 points or 0.06% after trading in a range of 16210.30 and 16294.65. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.85%, Bharti Airtel up by 2.42%, Wipro up by 1.99%, HCL Tech. up by 1.82% and Tech Mahindra up by 1.15%. On the flip side, IOC down by 2.23%, ONGC down by 2.22%, Indusind Bank down by 2.21%, Coal India down by 1.52% and Hindalco down by 1.40% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 133.31 points or 0.48% to 27,717.39, Hang Seng rose 36.45 points or 0.14% to 26,463.00, Jakarta Composite jumped 40.68 points or 0.66% to 6,199.72 and Shanghai Composite was up by 3.17 points or 0.09% to 3,480.39. On the other hand, Straits Times slipped 5.83 points or 0.18% to 3,177.07, Taiwan Weighted lost 28.87 points or 0.16% to 17,595.02 and KOSPI fell 0.59 points or 0.02% to 3,279.79.