Firm trade persists over Dalal Street

Firm trade persisted over the Dalal Street in early noon deals, with both Sensex and Nifty holding notable gain, amid positive cues from other Asian markets along with heavy buying at Healthcare and Metal counters. Sentiments remained optimistic, after credit rating agency, India Ratings and Research (Ind-Ra) in its ‘September 2023 edition of its Credit Market Tracker’ report said that the tightness in the liquidity market is likely to ease meaningfully in the coming quarter, as the government spending has increased, followed by a further release of money from the incremental cash reserve ratio funds. Besides, Central Board of Indirect Taxes and Customs (CBIC) chief Sanjay Kumar Agarwal has said that increased monthly GST collections are mainly on account of higher compliance, and the GST Council’s decision to tighten return filing and registration process would help reduce fake ITC claims in evasion prone sectors, including iron and steel. 

On the global front, Asian markets were trading mostly in green, after the Singapore government announced an additional S$1.1 billion support package to help Singaporean households to cope with the rising cost of living. The latest announcement is an extension of the measures unveiled at this year's budget.

The BSE Sensex is currently trading at 65960.67, up by 452.35 points or 0.69% after trading in a range of 65570.38 and 65987.07. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 1.23%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.35%, Metal up by 1.99%, PSU up by 1.55%, Oil & Gas up by 1.22% and Energy up by 1.13%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were NTPC up by 3.81%, Sun Pharma up by 2.86%, Tata Motors up by 2.53%, Tata Steel up by 1.50% and JSW Steel up by 1.41%. On the flip side, P Power Grid Corporation of India down by 0.37%, Asian Paints down by 0.18%, Infosys down by 0.15%, Tech Mahindra down by 0.05% and Bharti Airtel down by 0.02% were the top losers.

Meanwhile, Central Board of Indirect Taxes and Customs (CBIC) chief Sanjay Kumar Agarwal has said that increased monthly GST collections are mainly on account of higher compliance, and the GST Council’s decision to tighten return filing and registration process would help reduce fake ITC claims in evasion prone sectors, including iron and steel. He said the CBIC has received suggestions regarding streamlining tax rates in evasion-prone sectors and all that is being discussed. The Goods and Services Tax (GST) collection was Rs 1.87 lakh crore in April and in the first four months of the current fiscal, the collections have averaged Rs 1.67 lakh crore.

CBIC chief has stated that the buoyancy of revenue is 1.43 of nominal GDP growth meaning thereby revenue collection is not entirely on account of growth in GDP, but a major contribution is made by increased compliance level. Tax buoyancy explains the relationship between changes in government tax revenue growth and changes in GDP. To enhance compliance, he said the department has taken a soft approach of nudging taxpayers for timely and accurate filing of returns and selecting taxpayers for scrutiny and audit by risk analysis. He said less than 1 per cent of taxpayers are selected for scrutiny by way of audit based on risk behaviour analysis.

Agarwal said the government is taking all possible measures to encourage tax compliance and dissuade fraudsters from entering the GST system. He said the recent decisions in successive council meetings to make changes in return filing are in that direction so that menace of fake ITC can be curbed and adding that many sectors, like that of iron and steel, are impacted by the menace of fake input tax credit to a large extent. He also said that the solution to deal with fake ITC generation is quite complex and the department has received various suggestions regarding rates. 

The CNX Nifty is currently trading at 19671.00, up by 147.45 points or 0.76% after trading in a range of 19551.05 and 19679.30. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were NTPC up by 4.26%, Hindalco up by 3.68%, Dr Reddy's Laboratories up by 3.42%, Divi's Laboratories up by 3.07% and Sun Pharma up by 2.97%. On the flip side, Adani Enterprises down by 1.52%, LTIMindtree down by 1.14%, Asian Paints down by 0.36%, Power Grid Corporation of India down by 0.32% and HDFC Life Insurance Company by 0.23% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 493.8 points or 2.84% to 17,866.83, Jakarta Composite gained 23.66 points or 0.34% to 6,961.49 and Straits Times rose 12.49 points or 0.39% to 3,219.48, while Nikkei 225 slipped 14.9 points or 0.05% to 31,857.62.