Post Session: Quick Review

Indian equity benchmarks ended with gains of over 1% on Wednesday. The start of the day was on a cautious note, amid concerns about steep hikes in COVID-era interest rates globally and their impact on economic growth. Besides, rating agency Crisil has warned of more companies defaulting on their debt obligations as it expects the withdrawal of pandemic-induced relief measures coupled with volatile input prices creating cost pressures for entities, especially those rated in the sub-investment-grade category.

But soon, markets added gains and remained firm till the end, as sentiments remained positive with Tarun Bajaj, Revenue Secretary, Ministry of Finance, stating that simplification of Goods and Services Tax (GST) law, rationalisation of rates, and removal of tax inversion are among the priority for the government of India. He also said the government is looking forward to having lower rates on fewer products, with indirect taxes contributing 35-40 per cent of the tax revenue.

In the second half of the trading session, indices gained more traction, amid a private report stating that the Centre's production-linked incentive (PLI) scheme has the potential to add nearly 4 per cent to GDP in terms of incremental revenues. The PLI scheme aims to provide nearly Rs 2.4 lakh crore worth of incentives over the next five years, with the lion's share going to electronics, auto components, and pharma. Some support also came as foreign institutional investors (FIIs) turned net buyers for the first time since May 30, buying shares worth Rs 1,295.84 crore on July 5, as per provisional data available on the NSE.

On the global front, European markets were trading higher as an end to strike by Norwegian oil and gas workers eased worries of energy supply crunch. Asian markets ended lower, after the private sector in Hong Kong continued to expand in June, albeit at a slower pace, the latest survey from S&P Global showed on Wednesday with a PMI score of 52.4. That's down from 54.9 in May, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex ended at 53750.97, up by 616.62 points or 1.16% after trading in a range of 53143.28 and 53819.31. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.76%, while Small cap index up by 0.94%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 2.73%, Consumer Disc up by 2.47%, FMCG up by 2.45%, Consumer Durables up by 2.42% and Realty up by 2.39%, while Energy down by 0.27% and Metal down by 0.25% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Finserv up by 4.54%, Bajaj Finance up by 4.51%, Hindustan Unilever up by 4.01%, Maruti Suzuki up by 3.48% and Asian Paints up by 3.45%. On the flip side, Power Grid down by 1.63%, NTPC down by 1.03%, Reliance Industries down by 0.87%, Larsen & Toubro down by 0.50% and Tata Steel down by 0.22% were the top losers. (Provisional)

Meanwhile, a few days after the GST Council meeting, Revenue Secretary Tarun Bajaj has said that there is scope for further pruning of the GST exemption list. He is also hoping that the rough edges in the indirect tax regime will be ironed out in the next 2-3 years.

Tarun Bajaj further underlined multiple factors like increased economic activity post-Covid and better compliance which were responsible for the rise in GST collection. He noted that in the 47th GST Council meeting a lot of exemptions have been taken away but exemptions still remain. Work needs to be done on that.

On the services side, he said ‘we still have a large number of exemptions. The CBIC, GST Council, in collaboration with the trade and industry, will continue to work on that if we can prune this list of exemptions.' Bajaj also added that there would be some categories, like healthcare, on which exemptions would have to be continued.

Besides, Revenue Secretary said that there was good buoyancy in GST revenue last fiscal and the GST Council, comprising finance ministers from the Centre and states, is cautious not to burden the common man with increased rates.

The CNX Nifty ended at 15989.80, up by 178.95 points or 1.13% after trading in a range of 15800.90 and 16011.35. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia up by 4.76%, Bajaj Finance up by 4.52%, Bajaj Finserv up by 4.37%, Hindustan Unilever up by 4.03% and Eicher Motors up by 3.65%. On the flip side, ONGC down by 5.06%, Power Grid down by 1.73%, NTPC down by 1.35%, HDFC Life Insurance down by 1.31% and Hindalco down by 1.25% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 115.70 points or 1.65% to 7,141.17, France’s CAC increased 85.65 points or 1.48% to 5,880.61 and Germany’s DAX was up by 167.48 points or 1.35% to 12,568.68.

Asian markets ended lower on Wednesday as recession worries deepened, while investors awaited an update from the FOMC meeting minutes due later in the day. Chinese shares declined as another wave of Covid infections across Shanghai rekindled fears of further lockdowns in the world’s second-largest economy. Seoul shares hit a 20-month low as bleak data from Europe fueled recession worries globally.