Equity indices trade slightly higher in late morning deals

Domestic equity indices remained in green and were trading slightly higher in late morning deals. Buying in HDFC Bank, Mahindra & Mahindra, Reliance Industries and Asian Paints helped the markets to trade above neutral lines. Meanwhile, broader indices outperformed their large peers with BSE Mid cap index and Small cap index gaining in the range of 0.75-1.10%. Traders were getting some encouragement as Moody's Ratings said that fuelled by domestic demand growth, India is expected to remain the region's fastest-growing economy in the Asia-Pacific region in the second half of the year 2024. It also noted that India, Indonesia, and the Philippines were the key growth outperformers in the first half of the year 2024. On the BSE sectoral front, traders were seen pilling up position in Consumer Durables, Industrials, Capital Goods, Consumer Disc and Auto, while selling was witnessed only in IT and TECK. 

On the global front, Asian markets were trading mixed after the Bank of Japan kept its benchmark interest rate unchanged. The central bank left short-term rates unchanged at between 0% to 0.1% as widely expected, but said it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled for July 30 and 31. Back home, in the stock specific development, Shipping Corporation of India surged after it has been granted in-principle approval to form a wholly-owned subsidiary at GIFT City. 

The BSE Sensex is currently trading at 76865.99, up by 55.09 points or 0.07% after trading in a range of 76549.05 and 77001.70. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.76%, while Small cap index up by 1.06%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.24%, Industrials up by 1.18%, Capital Goods up by 0.96%, Consumer Disc up by 0.91% and Auto up by 0.82%, while IT down by 0.59%, TECK down by 0.44% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.03%, HDFC Bank up by 0.74%, Asian Paints up by 0.48%, Titan up by 0.40% and Reliance Industries up by 0.39%. On the flip side, HCL down by 1.08%, Tech Mahindra down by 0.96%, TCS down by 0.94%, Wipro down by 0.87% and NTPC down by 0.80% were the top losers.

Meanwhile, Economic think tank Global Trade Research Initiative (GTRI) has said that implementation of key strategic reforms such as simplification of customs duty structure, Goods and Services Tax (GST), and not incentivising low value-added electric vehicles would help India ensure its sustainable development and inclusive growth. It also said that India is standing on the cusp of a transformative era and there is an urgent need for comprehensive economic reforms. It said ‘from simplifying the convoluted customs duty structure to pioneering regulatory sandboxes for cryptocurrencies, and from boosting the MSME sector through GST reforms to fortifying our energy security, this agenda lays the foundation for a robust, resilient, and globally competitive India’. 

GTRI stated that the current basic customs duty structure, which affects $680 billion worth of imports, has not been reviewed in 20 years, leading to over 27 different duty rates and over 100 specific or mixed duty slabs. Currently, 85 per cent of customs duty revenue comes from less than 10 per cent of tariff lines (or product categories), while 60 per cent of tariff lines contribute less than 3 per cent of revenue. It noted that with some adjustments, the average import tariff could be reduced from 18.1 per cent to below 10 per cent without impacting important products. Simplification is necessary to avoid global criticism, as highlighted by former US President Donald Trump calling India the tariff king.

The think tank suggested increasing the GST exemption limit for a firm’s annual turnover from Rs 40 lakh to Rs 1.5 crore as this will be transformative for India’s MSME sector, promoting job creation and growth. Firms with less than Rs 1.5 crore turnover make up over 80 per cent of registrations but contribute less than 7 per cent of the tax collected, and a yearly turnover of Rs 1.5 crore equals Rs 12-13 lakh monthly turnover, translating to just Rs 1.2 lakh at a 10 per cent profit margin. It also asked the government not to incentivize low value-added Electric vehicles (EVs). Further, it suggested focusing on developing capacity to produce inputs and intermediates for both chemical and fermentation-based Active Pharmaceutical Ingredients (APIs).

The CNX Nifty is currently trading at 23433.95, up by 35.05 points or 0.15% after trading in a range of 23334.25 and 23469.45. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.28%, Adani Ports up by 2.04%, Shriram Finance up by 1.80%, Grasim Industries up by 1.79% and BPCL up by 1.04%. On the flip side, HCL down by 1.04%, TCS down by 0.99%, Tech Mahindra down by 0.95%, Wipro down by 0.90% and NTPC down by 0.82% were the top losers.

Asian markets were trading mixed; Shanghai Composite strengthened 2.96 points or 0.1% to 3,031.88, KOSPI increased 9.56 points or 0.35% to 2,764.45, Nikkei 225 surged 143.76 points or 0.37% to 38,864.23 and Taiwan Weighted added 153.76 points or 0.68% to 22,465.80. However, Hang Seng declined 90.62 points or 0.5% to 18,022.01, Jakarta Composite plunged 67.38 points or 1% to 6,764.18, Straits Times fell 16.05 points or 0.48% to 3,308.48.