Dear Trader…
Indian equity benchmarks extended their gains in today deals with Sensex and Nifty trading near 60,600 and 18,100 levels, respectively. Markets participants got boost after Government launched two consumer-centric initiatives by the Reserve Bank of India - the RBI Retail Direct Scheme and the Reserve Bank - Integrated Ombudsman Scheme.
The RBI Retail Direct Scheme is aimed at enhancing access to government securities market for retail investors, while The Reserve Bank - Integrated Ombudsman Scheme aims to further improve the grievance redress mechanism for resolving customer complaints against entities regulated by RBI. Buying in software and technology stocks too aided sentiments. Positive cues from regional peers too supported the up move.
Nifty futures opened at 17737.65 points against the previous close of 17896.85 and opened at a low of 17737.65 points. Nifty Future closed with an average movement of 422.35 points and a rise of around 244.40 points and 18141.25 points...!!
On the NSE, the midcap 100 index will rise 0.45% and smallcap 100 index is closing rise 0.29%. Speaking of various sectoral indices only Media and PSU Bank stocks were seen selling on the NSE, while all other sectoral indices closed higher.
At the start of intra-day trading, December gold opened at Rs.49104, fell from a high of Rs.49296 points to a low of Rs.48875.00 with a decline of 285 points, a trend of around Rs.48931 and December Silver opened at Rs.66800, fell from a high of Rs.67327 points to a low of Rs.66270, with a decline of 607 points, a trend of around Rs.66358.
Meanwhile, rating agency ICRA in its latest report has said that the states will forego around Rs 44,000 crore of tax revenue after they reduced VAT on petrol and diesel in the remainder of the fiscal (FY22) but higher central tax devolution of Rs 60,000 crore will offset the losses. After months of calls for lowering the taxes on the fuels, the Centre on November 4, 2021 has reduced the excise duty levied on petrol and diesel. While the excise duty on per litre of petrol has been reduced by Rs 5, the same has been brought down on diesel by Rs 10. Following this, as many as 25 states and Union territories have lowered value-added tax (VAT) on these fuels.
According to the report, the FY22 revenue loss of the states from the tax cut is around Rs 44,000 crore, of which Rs 35,000 crore is by way of lower VAT and the rest indirectly. But, the states are not losing money as they are getting Rs 60,000 crore of additional revenue from the Centre as part of the higher-than-budgeted tax devolution. While the Central excise reduction leads to no direct revenue loss to the states, the reduction of VAT, which is levied on an ad valorem basis, the excise cut will lower their VAT inflows by Rs 9,000 crore.
Accordingly, rating agency said the direct revenue loss to the states and UTs from VAT cuts is around Rs 35,000 crore, taking the total revenue foregone to around Rs 44,000 crore for FY22, which is in line with the expected revenue loss of the Centre. Factoring in the impact of the excise duty cut and expectations for mobility and the economic recovery with the rising COVID-19 vaccine coverage, it forecasts the consumption of petrol and diesel to rise 14 percent and 8 percent, respectively, in FY22. However, the Central tax devolution is likely to exceed the FY22 budget estimates by a substantial Rs 60,000 crore, and the FY21 provisional actuals by a healthy Rs 1.3 lakh crore.
Technically, the important key resistances are placed in Nifty future are at 18188 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 18202 – 18232 levels. Immediate support is placed at 18008 – 17970 levels.
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