Sensex, Nifty manage to trade in green terrain

Indian equity benchmarks were managing to trade in green terrain in late morning session, with both Sensex and Nifty trading higher. Positive cues from other Asian markets helped key indices to trade in green terrain. Traders were positive, as industry bodies said that the government's decision to expand the scope of the Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) to support micro, small and medium enterprises would help deal with funds shortage and promote exports. Besides, Commerce and Industry Minister Piyush Goyal said that India and the US should engage in a much bigger way and New Delhi is ready and willing to expand the economic partnership with America.

On the global front, Asian markets were trading mostly in green, after the manufacturing sector in China was steady in September, the latest survey from Caixin showed on Thursday with a manufacturing PMI score of 50.0. That beat expectations for a score of 49.5 and it's up from 49.2 in August. It moves out of contraction territory and right onto the line that separates expansion from contraction.

The BSE Sensex is currently trading at 59454.54, up by 41.27 points or 0.07% after trading in a range of 59228.22 and 59549.57. There were 18 stocks advancing against 11 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.49%, Realty up by 1.25%, Telecom up by 1.14%, Healthcare up by 0.81% and Industrials up by 0.55%, while Oil & Gas down by 0.26%, Energy down by 0.20%, Metal down by 0.19%, IT down by 0.08% and Auto down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.02%, Dr. Reddy's Lab up by 1.65%, Sun Pharma up by 1.58%, Titan Co up by 1.30% and NTPC up by 1.17%. On the flip side, Power Grid down by 2.43%, Bajaj Auto down by 1.27%, Asian Paints down by 1.20%, Kotak Mahindra Bank down by 0.92% and Tech Mahindra down by 0.67% were the top losers.

Meanwhile, domestic rating agency Icra has said that goods and services tax (GST) levy on annuity payments of BOT-HAM projects will have limited impact on project cash flows. Vinay Kumar G, assistant vice-president and sector head (corporate ratings) of ICRA said ‘with NHAI reimbursing additional tax burden on account of GST levy on annuity payments for BOT (build-operate-transfer)-HAM (hybrid annuity model) projects, there would be no impact on the cashflows, project debt coverage and return metrics of the concessionaire’.

It said for projects bid between July 1, 2017, and October 13, 2017, NHAI would not reimburse the GST on annuity under the change in law as bids were invited inclusive of GST. During the period, HAM projects with an approved total project cost of Rs 4,329.9 crore were awarded. The GST Council, through its clarification dated June 17, 2021, and subsequent policy circular issued by the National Highways Authority of India (NHAI) on September 1, 2021, has made 12 per cent GST applicable on annuity payments for HAM projects, received during the operations period.

So far, goods and services tax (GST) for BOT-HAM projects is applicable on the grants received from the authority during the construction period and the O&M (operation and maintenance) payments received during the operations period. However, clarity was missing on the applicability of GST on the annuity payments received during the operations period due to differing interpretations of GST notifications and other appellate rulings. The concessionaires can use the accumulated input tax credit (ITC) during the construction period to set off the GST liability on annuity payments received during the operations period.

It  said ‘Thus, the impact of GST liability on annuity was expected to be limited on the project return metrics with cash outflow towards GST liability being restricted to the last three-year period of operations’. However, it added as per the latest circular issued by NHAI on September 1 this year, NHAI will reimburse the net impact of additional GST on an annuity (adjusted for ITC) to the concessionaire under the change in law for projects bid on or before June 30, 2017, and between October 14, 2017, and June 16, 2021.

The CNX Nifty is currently trading at 17722.85, up by 11.55 points or 0.07% after trading in a range of 17658.45 and 17739.90. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 1.97%, Sun Pharma up by 1.90%, Dr. Reddy's Lab up by 1.71%, Titan Co up by 1.35% and Bajaj Finance up by 1.19%. On the flip side, Power Grid down by 2.44%, Asian Paints down by 1.42%, Indian Oil Corp. down by 1.41%, Eicher Motors down by 1.31% and Hero MotoCorp down by 1.29% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 115.99 points or 0.69% to 16,971.45, Jakarta Composite soared 63.40 points or 1.03% to 6,225.95, Nikkei 225 surged 26.79 points or 0.09% to 29,571.08, KOSPI rose 15.52 points or 0.51% to 3,075.79, Straits Times advanced 14.85 points or 0.48% to 3,089.16 and Shanghai Composite gained 13.17 points or 0.37% to 3,549.46. On the flip side, Hang Seng decreased 212.77 points or 0.86% to 24,450.73.