Indian equities pared most of their early gains, but the major averages are managing to trade in green in the afternoon session, on account of sustained buying by fund and retail investors in the blue-chip counters. Investors got some support with International Monetary Fund's (IMF) report that India’s growth has been ‘impressive’ in the recent years which makes room for tax broadening efforts by the government. Investors' sentiments got some support with positive global cues and healthy buying witnessed in Realty, Energy, Consumer Durables and Telecom stocks. However, gains were muted with global ratings agency Fitch’s report that more than half of the country’s Public Sector Banks (PSBs) can be impacted by the Reserve Bank of India’s (RBI) revised Prompt Corrective Action (PCA) framework and they would breach at least one of the new thresholds, primarily due to high non-performing loans (NPLs). In scrip specific development, Reliance Industries was up by around three and half percent after commissioning the second and final phase of paraxylene project at Jamnagar in Gujarat.
On the global front, Asian markets were trading in green, following the overnight rally on Wall Street amid renewed hopes of tax reform in the U.S. Treasury Secretary Steven Mnuchin indicated that the Trump administration plans to unveil a major tax reform plan very soon.
The BSE Sensex is currently trading at 29442.29, up by 19.90 points or 0.07% after trading in a range of 29435.56 and 29584.34. There were 14 stocks advancing against 16 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index was up by 0.71%.
The top gaining sectoral indices on the BSE were Realty up by 2.89%, Energy up by 1.49%, Consumer Durables up by 0.86%, Telecom up by 0.80% and Oil & Gas up by 0.63%, while Healthcare down by 0.29%, Auto down by 0.12%, FMCG down by 0.09%, Metal down by 0.05% and Basic Materials down by 0.03% were the losing indices on BSE.
The top gainers on the Sensex were Reliance Industries up by 3.45%, Axis Bank up by 1.31%, NTPC up by 1.28%, ONGC up by 0.98% and Larsen & Toubro up by 0.65%. On the flip side, Sun Pharma down by 2.01%, Cipla down by 1.25%, ICICI Bank down by 1.21%, HDFC down by 1.09% and Power Grid down by 1.05% were the top losers.
Meanwhile, the International Monetary Fund (IMF) in its report on Fiscal Monitor has said that India has recorded quite an impressive growth performance in recent years which makes room for tax broadening efforts by the government. The report also stated that India returned to fiscal consolidation in the fiscal year 2016-17 largely due to the near-elimination of fuel subsidies and enhanced targeting of social benefits, notwithstanding the impact of demonetization. It further stated that India is also making progress toward strengthening its fiscal responsibility framework, through anchoring fiscal adjustment by means of a debt-to-GDP ratio of 60 per cent to be achieved by fiscal year 2022-23.
The director of IMF Fiscal Affairs Department, Vitor Gasper said the elimination of fuel subsidies and the targeting of social benefits have delivered in terms of allowing the union budget target to be achieved at 3.5 percent of Gross Domestic Product (GDP). He added that they have been collaborating with the Indian authorities in terms of looking at fiscal structural measures, including expenditure rationalization, while protecting infrastructure investment, tax broadening efforts.
Gasper further said that in this context, the rollout of Goods and Services tax (GST) is an extremely important step that will create a true unified national market in India. He also said that there are rooms for tax broadening efforts and for more progressive income taxes in line with trends in income inequality.
The CNX Nifty is currently trading at 9142.30, up by 5.90 points or 0.06% after trading in a range of 9140.40 and 9183.65. There were 26 stocks advancing against 25 stocks declining on the index.
The top gainers on Nifty were Reliance Industries up by 3.42%, Bharti Infratel up by 2.31%, Tech Mahindra up by 1.93%, Axis Bank up by 1.43% and NTPC up by 1.34%. On the flip side, Sun Pharma down by 2.10%, Bank of Baroda down by 1.53%, Grasim Industries down by 1.36%, Cipla down by 1.19% and Power Grid down by 1.17% were the top losers.
Most of the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 10.09 points or 0.58% to 1,751.70, KOSPI Index gained 15.89 points or 0.74% to 2,165.04, Jakarta Composite was up by 35.59 points or 0.64% to 5,630.89, Hang Seng added 37.6 points or 0.16% to 24,094.58, Taiwan Weighted rose 84.72 points or 0.88% to 9,717.41 and Nikkei 225 surged 190.26 points or 1.03% to 18,620.75.
On the flip side, Shanghai Composite was down by 7.34 points or 0.23% to 3,164.76.