Dear Trader…
Indian equity benchmarks ended near day’s high point on Wednesday, led by strong gains in Auto, Consumer Discretionary and FMCG stocks amid positive opening in European stock markets. After the initial uptick, the benchmarks gradually inched higher as the session progressed and settled around the day’s high as foreign funds turning net buyers of domestic equities after a long gap. FIIs turned net buyers after remaining net sellers in the capital market for past many days, as they bought shares worth Rs 1,295.84 crore on Tuesday. Traders also took some solace 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.
Key gauges extended gains in second half of trading session, taking support from 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. Additional support also came with report stated that a rise in public investment in the production-linked incentive schemes (PLI) has resulted in a growth in hiring intent for July-September as 61 percent of companies surveyed said they are keen to hire more. Traders overlooked the Centre for Monitoring Indian Economy (CMIE) data showed the rate of unemployment in India rose to 7.8 per cent in June due to a sharp jump in unemployment in rural areas.
Nifty futures opened at 15796.85 points against the previous close of 15776.05 and opened at a low of 15781.05 points. Nifty Future closed with an average movement of 238.95 points and a rise of around 242.40 points and 16018.45 points...!!
On the NSE, the midcap 100 index will rise 1.90% and smallcap 100 index is closing rise 0.49%. Speaking of various sectoral indices Metal, IT, Pharma and Fmcg, Auto, Realty, Media, Fin Service, Bank saw heavy gains on the NSE, while all other sectoral indices also closed higher.
At the start of intra-day trading, August gold opened at Rs.51382, fell from a high of Rs.51520 points to a low of Rs.51051 with a decline of 131 points, a trend of around Rs.51171 and September Silver opened at Rs.56900, fell from a high of Rs.57278 points to a low of Rs.56100, with a decline of 52 points, a trend of around Rs.56813.
Meanwhile, pitching for the simplification of Goods and Services Tax (GST) structure, the Confederation of Indian Industry’s (CII’s) President Sanjiv Bajaj has suggested that electricity as well as fuel should be brought under the GST ambit as that will help make the industry more competitive. He also suggested that the number of tax slabs under the GST should be brought down to three. Further, he said there is justification for keeping sin and luxury goods in the highest slab.
The president of the industry body said ‘we believe there is (scope for) simplification to probably three slabs. Now that five years have gone and there is experience over there, is what makes sense and that is something that should be deliberated upon’. Besides the exempted category, GST is levied at 5 per cent, 12 per cent, 18 per cent and 28 per cent. There are separate tax rates for gold and precious and semi-precious stones.
Technically, the important key resistances are placed in Nifty future are at 16088 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 15808 – 15676 levels. Immediate support is placed at 16106 – 16133 levels.
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