Key benchmark indices ended with decent gains as optimistic buying activity ahead of the Union budget on Thursday, 1 February 2018, buoyed the trading sentiment. The barometer index, the S&P BSE Sensex, rose 232.81 points or 0.65% to 36,283.25, as per the provisional closing data. The Nifty 50 index rose 60.75 points or 0.55% to 11,130.40, as per the provisional closing data.
Key indices opened higher and firmed up further as the session progressed. The Sensex and the Nifty, both, scaled fresh record high in afternoon trade as the Economic Survey tabled in the Parliament today, 29 January 2018, showed that Indian economy is expected to expand at 7-7.5% in 2018-19. However, profit booking emerged at higher levels in mid-afternoon trade.
The Sensex rose 393.54 points, or 1.09% at the day's high of 36,443.98 in afternoon trade, its record high level. The index rose 42.92 points, or 0.12% at the day's low of 36,093.36 in early trade. The Nifty rose 101.90 points, or 0.92% at the day's high of 11,171.55 in afternoon trade, its record high level. The index rose 6.30 points, or 0.06% at the day's low of 11,075.95 in early trade.
Broader market witnessed selling pressure. Among secondary barometers, the BSE Mid-Cap index provisionally fell 0.73%. The BSE Small-Cap index provisionally fell 1.10%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,876 shares fell and 972 shares rose. A total of 183 shares were unchanged.
The total turnover on BSE amounted to Rs 5399.19 crore, higher than turnover of Rs 4791.43 crore registered during the previous trading session.
Auto stocks nudged higher on hopes of tax rationalization in the automobile sector in the Union Budget slated on Thursday, 1 February 2018. Eicher Motors (up 3.52%), Ashok Leyland (up 2.33%), Hero MotoCorp (up 2.08%), TVS Motor Company (up 1.89%), Bajaj Auto (up 1.79%) and Mahindra & Mahindra (up 1.07%), edged higher. Escorts (down 0.36%) and Tata Motors (down 0.49%), edged lower.
Among the slew of suggestions in its budget wish list, the Society of Indian Automobile Manufacturers (SIAM) has suggested that all passenger vehicles be kept under two tax rates under the GST vs. multiple tax rates levied currently.
Currently, small petrol cars (engine capacity less than 1,200cc) attract 28% GST plus 1% cess, diesel cars (engine capacity less than 1,500cc) attract 28% GST plus 3% cess and hybrid cars, including mid, large and SUVs, attract 15% cess.
The SIAM has once again moved the government to abolish the cess applicable on these categories, but it is likely that instead of an entire removal of cess, the government might look to standardise slabs, with fewer variations, reports suggested.
Car major Maruti Suzuki India (MSIL) rose 3.51% at Rs 9,603 after net profit rose 3% to Rs 1799 crore on 13.9% rise in net sales to Rs 18940 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours on Thursday, 25 January 2018. The market remained shut on Friday, 26 January 2018 on account of holiday.
MSIL said that the board discussed and approved a revision in the method of calculating royalty which would result in lower royalty payments for new model agreements starting the Ignis. This would be implemented after approval by the board of parent firm, Suzuki Motor Corporation.
Housing finance major HDFC rose 3.12% to Rs 1,961.90 after consolidated net profit surged 144.7% to Rs 6677.06 crore on 12.4% rise in total income to Rs 16846.77 crore in Q3 December 2017 over Q3 December 2016. The result was announced during market hours today, 29 January 2018.
Meanwhile, the board of directors of the company approved issuance of secured, redeemable, non convertible debentures aggregating Rs 35000 crore in various tranches on a private placement basis. The board also approved issuance of rupee denominated bonds/foreign currency denominated bonds to overseas investors for an additional amount not exceeding $1500 million in various tranches under medium term note programme.
On the macro front, the Economic Survey 2017-18 was tabled in Parliament today, 29 January 2018. India's economy should grow between 7% and 7.5% in the 2018/19 (April-March) with exports and private investment set to rebound. The survey estimates that gross domestic product will have grown 6.75% in the current fiscal year ending in March 2018.
India's external sector continued to be resilient and strong in 2017-2018. The global economy is gathering pace and is expected to accelerate from 3.2% in 2016 to 3.6% in 2017 and 3.7% in 2018 which reflects an upward revision of the earlier projections by the International Monetary Fund (IMF).
FDI equity inflows to the services sector grew by 15% during 2017-18 (April-October). It has been possible because the Government has undertaken a number of reforms to ensure that India remains an increasingly attractive investment destination, which include announcement of National Intellectual Property Rights (IPR) policy, implementation of GST, reforms for ease of doing business.
The survey highlighted that against the emerging macroeconomic concerns, policy vigilance will be necessary in the coming year, especially if high international oil prices persist or elevated stock prices correct sharply, provoking a ―sudden stall in capital flows.
Meanwhile, the total revenue received under Goods and Services Tax (GST) for the month of December 2017 (received in December/January up to 24 January 2018) has been Rs 86703 crore till 24 January 2018. The last date for filing of GSTR 3B return for the month of December 2017 was 22 January 2018, the Finance Ministry said in a statement on 25 January 2018.
The next major trigger for the market is Union Budget 2018-2019, which will be presented by the finance minister Arun Jaitley in the parliament on Thursday, 1 February 2018.
The Budget Session of the parliament began today, 29 January 2018. The session began with the address of the President. The first phase of the budget session of the parliament is being held from 29 January 2018 to 9 February 2018. After a recess, Parliament will meet again from 5 March 2018 to 6 April 2018, as per reports.
Overseas, most European shares were trading lower as investors monitored fresh economic data and corporate earnings.
Asian shares were mixed after several stocks gave up gains from upbeat openings that tracked Friday's rally on Wall Street. US stocks surged on Friday, 26 January 2018. A reading of fourth-quarter gross domestic product came in slightly softer than expected but was viewed by investors as healthy enough to perceive that the economy is on firm footing. The Dow Jones Industrial Average rose 0.85%. The S&P 500 index climbed 1.18%. The Nasdaq Composite Index surged 1.28%.
US gross domestic product (GDP) for the fourth quarter rose 2.6% as consumption and business activity picked up.
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