Firm trade persists over Dalal Street

Firm trade continued over the Dalal Street in early noon deals with both Sensex and Nifty trading around 0.40% higher each, despite negative cues from other Asian markets. Buying at Telecom, Auto and IT counters helped indices to maintain their gains, while Bajaj Finserv leads the gainers. The street took a note of Union finance minister Nirmala Sitharaman’s statement that regulators should maintain a constant vigil as ensuring financial sector stability is a shared responsibility of the regulators.

On the global front, Asian markets were trading mostly in red, as China's exports grew at a slower pace in April and imports posted a sharp decline signaling that the expected rebound in the economy after the lifting of Covid controls is unlikely to last long. Exports registered an annual growth of 8.5 percent in April.

On the sectoral front, beverages industry stocks were in watch, as Confederation of All India Traders (CAIT) urged the union finance minister to consider reducing the Goods and Services Tax (GST) rate on beverages from 28 per cent, which comes to 40 per cent after inclusion of cess, arguing that it blocks the working capital of small retailers.

The BSE Sensex is currently trading at 62014.74, up by 250.49 points or 0.41% after trading in a range of 61808.50 and 62027.51. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Telecom up by 0.98%, Auto up by 0.75%, IT up by 0.63%, Energy up by 0.62% and Metal up by 0.52%, while Utilities down by 0.22%, PSU down by 0.18% and Power down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.56%, Asian Paints up by 1.50%, Indusind Bank up by 1.48%, Tata Motors up by 1.26% and HDFC up by 1.14%. On the flip side, Sun Pharma down by 0.89%, ITC down by 0.79% and SBI down by 0.68% were the few losers.

Meanwhile, Confederation of All India Traders (CAIT) has urged the union finance minister to consider reducing the Goods and Services Tax (GST) rate on beverages from 28 per cent, which comes to 40 per cent after inclusion of cess, arguing that it blocks the working capital of small retailers. The CAIT suggested that India should move to a Sugar Based Tax (SBT) system keeping the tax slabs proportional to the sugar in products, which means, higher the sugar in products, higher the tax.

CAIT stated that for beverages that are in the low and no sugar category, this will reduce taxes, opening up capital for the retailers to make more purchases, increase sales and double their incomes. This also benefits the common man significantly, by reducing their household costs at the same time. The traders' body said it will launch a campaign among stakeholders and citizens to forge an alliance with other verticals of the economy like farmers, transporters, SMEs, women entrepreneurs, consumers, hawkers etc. to impress upon both the Centre and state governments to lower the tax rate on beverages.

The Goods and Services Tax (GST) Council in its meeting held on September 17, 2021 had recommended that 'Carbonated Fruit Beverages of Fruit Drink' and 'Carbonated Beverages with Fruit Juice' would attract GST rate of 28 per cent and cess of 12 per cent. This is being prescribed specifically in the GST rate schedule.

The CNX Nifty is currently trading at 18332.60, up by 68.20 points or 0.37% after trading in a range of 18276.90 and 18344.20. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 1.60%, Coal India up by 1.59%, Indusind Bank up by 1.56%, Asian Paints up by 1.51% and Mahindra & Mahindra up by 1.23%. On the flip side, UPL down by 2.38%, Sun Pharma down by 0.92%, ITC down by 0.81%, Hindalco Industries down by 0.69% and SBI down by 0.68% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 398.65 points or 1.96% to 19,898.38, Shanghai Composite weakened 36.08 points or 1.06% to 3,358.92, Straits Times fell 10.32 points or 0.32% to 3,247.34, KOSPI dropped 3.15 points or 0.13% to 2,510.06 and Jakarta Composite plunged 0.9 points or 0.01% to 6,768.73, while Nikkei 225 surged 292.94 points or 1% to 29,242.82 and Taiwan Weighted added 28.13 points or 0.18% to 15,727.70.