Sensex, Nifty gain traction in late morning session

Indian equity benchmarks gained traction in late morning session, with both Sensex and Nifty adding more gains, on the back of positive cues from other Asian markets. Domestic sentiments remained upbeat, as the Centre approved the continuation of the Prime Minister Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) scheme till December 2024. Adding more comfort among traders, a private report stated that as the country recovers from the pandemic, the retail industry has resumed its growth trajectory and is likely to witness 10 per cent annual growth to reach approximately USD 2 trillion by 2032.

On the global front, Asian markets were trading in green, after Industrial production in Japan was up a seasonally adjusted 0.3 percent on month in March. That was shy of expectations for an increase of 0.5 percent and down from 2.0 percent in February. On a yearly basis, industrial production slipped 1.7 percent, also missing forecasts for a decline of 0.5 percent following the 0.5 percent increase in the previous month.

The BSE Sensex is currently trading at 57201.63, up by 382.24 points or 0.67% after trading in a range of 56936.94 and 57296.44. There were 21 stocks advancing against 8 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.10%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were FMCG up by 1.44%, Capital Goods up by 0.98%, Energy up by 0.85%, Oil & Gas up by 0.76% and Consumer Durables up by 0.62%, while Telecom down by 0.85%, Realty down by 0.40%, Metal down by 0.28% and Auto down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.85%, Asian Paints up by 2.46%, Larsen & Toubro up by 1.91%, Reliance Industries up by 1.66% and Infosys up by 1.51%. On the flip side, HCL Tech. down by 1.44%, Bajaj Finance down by 1.29%, Bajaj Finserv down by 0.57%, HDFC Bank down by 0.53% and Mahindra & Mahindra down by 0.51% were the top losers.

Meanwhile, the Finance Ministry said that the Centre has already released eight months of GST compensation dues to the states for the fiscal ended March 2022 and Rs 78,704 crore is pending due to inadequate balance in the cess fund. It said normally, GST compensation for 10 months (April-January) of any financial year is released during that year and the compensation of February-March is released only in the next financial year.

Under GST essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. This cess collection is used to compensate states for the revenue loss due to GST rollout. At the time of GST implementation on July 1, 2017, the Centre had agreed to compensate states for five years till June 2022, and protect their revenue at 14 per cent per annum over the base year revenue of 2015-16.

The ministry further said that after taking into account the back to back loan, Rs 7.35 lakh crore has been released to the states to compensate for revenue loss. Currently, only for the year 2021-22, compensation of Rs 78,704 crore is pending due to inadequate balance in the fund, which is equivalent to compensation of four months. For 2020-21 fiscal no compensation is pending to the states and a total of Rs 2.78 lakh crore, which includes back to back loan, has been released to states.

The CNX Nifty is currently trading at 17144.30, up by 105.90 points or 0.62% after trading in a range of 17071.05 and 17189.50. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.86%, Asian Paints up by 2.54%, UPL up by 2.29%, HDFC Life Insurance up by 2.28% and Larsen & Toubro up by 2.02%. On the flip side, Hindalco down by 1.69%, Bajaj Auto down by 1.54%, HCL Tech. down by 1.23%, Bajaj Finance down by 1.09% and Mahindra & Mahindra down by 0.79% were the top losers.

All Asian markets were trading in green; Nikkei 225 surged 411.57 points or 1.56% to 26,798.20, Taiwan Weighted strengthened 103.76 points or 0.64% to 16,407.11, Jakarta Composite soared 49.49 points or 0.69% to 7,246.25, KOSPI rose 17.57 points or 0.67% to 2,656.63, Straits Times advanced 9.44 points or 0.28% to 3,330.11, Shanghai Composite gained 7.28 points or 0.25% to 2,965.56 and Hang Seng increased 243.70 points or 1.22% to 20,190.06.