Benchmarks trade firm tracking positive global cues

The Indian equity markets have made a firm start tracking positive cues from global indices. The US markets extended their rally mood for the second consecutive day and all the major indices surged by over a percent overnight, while all the Asian equity indices barring Shanghai Composite were trading in the green at this point of time, indicating strong investors' sentiments. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE's -- Sensex -- and NSE's -- Nifty -- to regain their crucial 18,600 and 5,550 mark. Power witnessed the maximum gain in trade followed by metal and software while, there were no losers on the BSE sectoral space. Sugar stocks like Shree Renuka Sugars, Balrampur Chini Mills, EID Parry and Rana Sugars all were trading in jubilant mood with a gain in the range of 3-7 percent on reports that the government on June 28, 2011, issued a formal order for exports of an additional 5 lakh tonnes of sugar. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,203 shares on the gaining side against 447 shares on the losing side while 58 shares remained unchanged.

The BSE Sensex opened at 18,552.19; about 60 points higher compared to its previous closing of 18,492.45, and has touched a high of 18,654.72 while low remain its opening.

The index is currently trading at 18,617.25, up by 124.80 points or 0.67%. There were 26 stocks advancing against just 4 declines on the index.

The overall market breadth has made a strong start with 70.43% stocks advancing against 26.17% declines. The broader indices were going neck to neck with benchmarks; the BSE Mid cap and Small cap indices surged 0.54% and 0.80% respectively.

The top gaining sectoral indices on the BSE were, Power up by 1.13%, Metal up by 1.05%, IT up by 1.02%, TECk up by 0.85% and FMCG was up by 0.68%. While, there were no losers on the index.

The top gainers on the Sensex were BHEL up by 2.35%, Sterlite Industries up by 1.91%, Reliance Infra up by 1.71%, TCS up by 1.57% and HDFC was up by 1.16%.

On the flip side, Bajaj Auto was down by 2.12%, ONGC was down by 1.18%, Jaiprakash Associates was down by 1.16% and L&T was down by 0.52% were the only losers on the Sensex.

Meanwhile, the Goods and Services Tax (GST) regime is expected to be between 16-20% in India. The Central Board of Excise and Customs (CBEC) Chairman Sumit D Majumdar said 'World over, GST rates are typically between 16% and 20%. In India it is likely to be the same."

S D Majumdar said tax rates under the proposed GST would come down sharply and the number of assesses would rise by 5-6 times. Although rates would come down, tax collection would go up due to increased buoyancy, he said on the sidelines of a session organized by the Bharat Chamber of Commerce.

In the last budget session, a constitutional amendment bill on GST was introduced in Lok Sabha. The GST would include most of the indirect taxes like excises duty and service tax at the central level and Value Added Tax (VAT) on the state level, besides local taxes. The execution of GST is considered to be a major tax reform, and has been stuck for many years due to differences between central and state government on the new structure of GST. CBEC chairman said a dispute settlement authority would be set up to resolve conflicts between the Centre and states, by adding further, he said that the GST would be introduced any time during the next financial year. 'Since it is a transaction-based tax unlike direct tax, it is not necessary to be implemented from April 1, 2012. A special purpose vehicle has been set up by states, Centre and NSDL to develop software to implement GST. The software is now being tested in 11 states. Initially, petroleum products and alcohol would be kept out of the purview of GST, Majumdar said.

While customs duty would be out of GST net, countervailing duty would be covered by it, CBEC chairman said. A taskforce has been set up to frame the GST legislation. 'The mandate given to the body is to keep the legislation as simple as possible,' he added.

Earlier, finance minister Pranab Mukherjee had said that GST would come into effect from April 1, 2012.

The S&P CNX Nifty opened at 5,566.50; about 21 points higher compared to its previous closing of 5,545.30, and has touched a high of 5,591.80 while low remain its opening.

The index is currently trading at 5,581.15, higher by 35.85 points or 0.65%. There were 45 stocks advancing against 5 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 2.58%, BHEL up by 2.22%, Sterlite Industries up by 2.12%, TCS up by 1.62% and Sesa Goa up by 1.60%.

On the flip side, Reliance Capital down by 0.89%, BPCL down by 0.75%, ONGC down by 0.33%, L&T down by 0.16% and JP Associates down by 0.06%, were the major losers on the index.

All the Asian equity indices barring Shanghai Composite were trading in the green; Hang Seng was up 70.09 points or 0.32% to 22,131.87, KLSE Composite was up 2.85 points or 0.18% to 1,572.87, Nikkei 225 was up 106.70 points or 1.11% to 9,755.68, Straits Times was up 13.22 points or 0.43% to 3,064.01, Seoul Composite was up 27.62 points or 1.34% to 2,090.53 and Taiwan Weighted was up by 92.92 points or 1.10% to 8,571.78.

On the flip side, Shanghai Composite was down by 11.82 points or 0.43% to 2,747.38 

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