Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters. Traders took support with the news that the GST Council on Saturday approved a law to compensate states for any loss of revenue from the implementation of the new national sales tax but deferred approval for enabling laws to the next meeting. The council will meet again on March 4 and 5 to approve the legally vetted draft of the supporting legislations for Central GST (C-GST) and Integrated GST (I- GST), days before the start of the second leg of the Budget Session. Some support also came with the latest government figures which showed that savings due to Direct Benefit Transfer (DBT) over the last three years have touched Rs 50,000 crore as on December 31, 2016. This amount is equivalent to the subsidy paid out under DBT in this financial year, implying nearly a year’s subsidy was saved. Presently, 84 schemes in 17 ministries are covered under the DBT, up from 34 schemes as on March 31, 2015. Overseas investors have pumped in over Rs 9,500 crore ($1.4 billion) into the country’s capital markets this month so far, enthused by clarity on FPI taxation. According to depository data, Foreign Portfolio Investors (FPIs) infused a net sum of Rs 3,002 crore in equities during February 1-17 and another Rs 6,559 crore in the debt segment, translating into a total inflow of Rs 9,561 crore ($1.42 billion). Traders were seen piling position in Telecom, Consumer Durables and Basic Materials stocks, while selling was witnessed in FMCG sector stocks. In scrip specific development, Reliance Communications (RCom) was trading firm on report that RCom and the Tata Group are believed to have initiated talks to explore a possible union that could see Tata Teleservices join forces with the merged RCom-Aircel and MTS. Tata Consultancy Services (TCS) was trading in green ahead of the board meeting to consider a share buyback proposal later in the day.
On the global front, Asian shares were trading mostly in green, with Tokyo shares erasing morning losses and Hong Kong equities resuming a rally. Japan’s exports rose in January at a slower pace than the previous month due to a decline in shipments to the US and the Lunar New Year holidays and as concerns about growing trade protectionism cast doubts over the outlook. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,800 and 28,400 levels respectively. The market breadth on BSE was positive in the ratio of 1516:743, while 141 scrips remained unchanged.
The BSE Sensex is currently trading at 28499.07, up by 30.32 points or 0.11% after trading in a range of 28419.27 and 28521.16. There were 18 stocks advancing against 12 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index was up by 0.71%.
The top gaining sectoral indices on the BSE were Telecom up by 1.91%, Consumer Durables up by 1.13%, Basic Materials up by 0.88%, Realty up by 0.78% and Utilities up by 0.72%, while FMCG down by 0.04% was the sole loser on BSE.
The top gainers on the Sensex were Bharti Airtel up by 2.30%, GAIL India up by 1.80%, Tata Steel up by 1.42%, TCS up by 1.41% and Bajaj Auto up by 1.14%.
On the flip side, HDFC down by 0.86%, ITC down by 0.63%, Mahindra & Mahindra down by 0.54%, Infosys down by 0.47% and Axis Bank down by 0.46% were the top losers.
Meanwhile, a joint study carried out by the Associated Chambers of Commerce & Industry of India (Assocham) and global advisory firm Ernst & Young (EY), stated that the government's demonetisation move has led to widespread adoption of online payment and is expected to have a positive long term impact on the economy through better tax compliance, increase in the tax to GDP ratio and higher tax collections. It also highlighted that improved governance, favourable conditions to conduct business, transparency in government procedures and responsive policy making with an immediate focus on effective implementation of reforms will continue to evolve India into a preferred destination for foreign investment.
The Assocham-EY study titled 'India: Transforming through radical reforms' noted that India is set on a growth trajectory that promises all-round development, economic welfare and strong macroeconomic indicators. All these radical reforms are acting as enablers for boosting the domestic environment which in turn is improving the country's stature globally. However, it said that the government needs to continuously invest in improving the ease of doing business environment, develop sound infrastructure and ensure availability of trained workforce.
As per the report, combining demonetisation with Digital India and Pradhan Mantri Jan Dhan Yojana will ensure transparency in financial transactions. It also said that the GST (goods and services tax) which is expected to be rolled out by July 2017, will further boost the economy by simplifying the indirect tax structure, and eliminating the cascading effect of taxes on customers and make doing business easier in the country. It added that the ceasing of major proportion of unaccounted currency would reduce the government liabilities and add to its finances. Besides, the surplus liquidity in the banking system will lower borrowing costs and increase the access to credit.
The CNX Nifty is currently trading at 8831.80, up by 10.10 points or 0.11% after trading in a range of 8809.80 and 8840.05. There were 33 stocks advancing against 18 stocks declining on the index.
The top gainers on Nifty were Idea Cellular up by 2.97%, Bharti Airtel up by 2.27%, GAIL India up by 1.81%, Tata Power up by 1.66% and TCS up by 1.51%.
On the flip side, Hindalco down by 1.50%, Tech Mahindra down by 1.06%, HDFC down by 0.99%, Bosch down by 0.99% and Yes Bank down by 0.87% were the top losers.
The Asian markets were trading mostly in green; KOSPI Index increased 0.53 points or 0.03% to 2,081.11, FTSE Bursa Malaysia KLCI increased 4.09 points or 0.24% to 1,711.77, Jakarta Composite increased 15.89 points or 0.3% to 5,366.82, Nikkei 225 increased 16.76 points or 0.09% to 19,251.38, Shanghai Composite increased 27.08 points or 0.85% to 3,229.15 and Hang Seng increased 81.32 points or 0.34% to 24,115.06.
On the other hand, Taiwan Weighted decreased 25.33 points or 0.26% to 9,754.59.