Range bound movement continued for key benchmark indices. At 14:20 IST, the barometer index, the S&P BSE Sensex, was up 35.56 points or 0.14% at 26,163.76. The 50-unit Nifty 50 index was currently up 5.30 points or 0.07% at 7,948. The lacklustre move for key indices came ahead of a scheduled monetary policy review from the Reserve Bank of India (RBI) tomorrow, 1 December 2015, morning and on the eve of the release of Q2 September 2015 GDP data. The government is set to announce the Q2 September 2015 GDP data after trading hours. The data is expected to be announced at 17:30 IST. The GDP grew 7% on year in Q1 June 2015.
The market breadth indicating the overall health of the market was strong. On BSE, 1,599 shares rose and 964 shares fell. A total of 221 shares were unchanged. The BSE Mid-Cap index was up 0.35%. The BSE Small-Cap index was up 0.82%. Both these indices outperformed the Sensex.
In overseas equity markets, European stocks reversed initial losses amid speculation that the European Central Bank will announce a round of fresh measures to boost the eurozone economy at its regular monetary policy review scheduled later this week. Asian stocks edged lower. US stocks finished slightly lower during an abbreviated, post-Thanksgiving trading session on Friday, 27 November 2015.
Bank stocks edged higher on renewed buying. Among public sector banks, UCO Bank (up 1.57%), Syndicate Bank (up 1.06%), Punjab National Bank (up 0.69%), Corporation Bank (up 0.24%), Allahabad Bank (up 0.92%), Bank of Baroda (up 0.98%), State Bank of India (SBI) (up 0.88%), Union Bank of India (up 2.71%), Canara Bank (up 1.57%), Bank of India (up 0.96%) and United Bank of India (up 0.9%) edged higher.
IDBI Bank jumped 8.97% after media reports suggested that the principal shareholder in the bank viz. the Government of India is in talks with the International Finance Corporation to sell a 15% stake in the bank. The Government of India holds 76.5% stake in IDBI Bank (as per the shareholding pattern as on 30 September 2015). IDBI Bank issued a clarification stating that the bank has not received any official communication from the Government of India in this regard.
Among private sector banks, Axis Bank (up 0.1%), ICICI Bank (up 2.23%), Federal Bank (up 0.61%), Yes Bank (up 0.55%), and IndusInd Bank (up 1.24%) edged higher. HDFC Bank (down 0.45%) and Kotak Mahindra Bank (down 0.65%) declined.
IT stocks were mixed. TCS (up 0.33%), Infosys (up 0.25%), and Wipro (up 0.35%) edged higher. Tech Mahindra (down 0.03%) and HCL Technologies (down 0.09%) declined.
Welspun Corp rose 8.12% after media reports that it has put renewable energy business on the block and has appointed a British investment bank to look for a buyer. The move is reportedly aimed at trimming the company's debt amid weakening business margins due to consistent fall in solar power prices.
Meanwhile, the opposition Congress party has said that the Goods and Services Tax (GST) should not exceed 18% so that the tax rate is kept moderate and does not impose a burden on the consumer. The Congress also said that the proposed extra 1% interstate tax is against the very idea of having a uniform GST. Considering that there will be 100% compensation for state governments for five years, this extra levy will be market distorting, the principal opposition party said. The Dispute Mechanism of the GST council should be made independent of political parties, the Congress party said.
The Congress' stand on GST comes as the Indian industry keenly awaits the progress on the ambitious indirect tax reform. On Friday, 27 November 2015, Prime Minister Narendra Modi met Congress president Sonia Gandhi and former Prime Minister Dr. Manmohan Singh in an effort to break the impasse over the passage of the GST constitutional amendment bill in parliament. The constitutional amendment bill for the implementation of GST, which subsumes all indirect taxes to create a unified market across the country, has been cleared by the Lok Sabha and is awaiting legislative passage in the Rajya Sabha. The government has listed GST constitutional amendment bill for its passage in the Rajya Sabha during the ongoing winter session of the parliament. A constitutional amendment bill requires a majority of two thirds in the house for its passage. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
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