Key benchmark indices extended gains and hit fresh record highs in early afternoon trade. Buying gathered pace after the media reported that China has exempted tariff on more US products.
At 12:25 IST, the barometer index, the S&P BSE Sensex, was up 116.17 points or 0.28% at 41,674.74. The Sensex hit a record high of 41,685.02.
The Nifty 50 index was up 32.3 points or 0.26% at 12,253.95. The index hit a record high of 12,261.25.
The S&P BSE Mid-Cap index was up 0.21% while the S&P BSE Small-Cap index was up 0.24%.
The market breadth was positive. On the BSE, 1118 shares rose and 1008 shares fell. A total of 166 shares were unchanged. In Nifty 50 index, 29 stocks advanced while 21 stocks declined.
Economy:
The 38th meeting of the Goods and Services Tax (GST) Council under the Chairmanship of the Union Minister for Finance & Corporate Affairs Nirmala Sitharaman took place on Wednesday (18 December 2019).
The council decided to tax woven and non-woven bags at 18%, compared with 12% at present. It exempted from tax the upfront amount payable for long-term lease of industrial and financial infrastructure plots by any entity that is owned 20% or more by the Centre or state governments. Presently, the exemption is available to an entity having 50% or more ownership of Central or State Government. This change shall become effective from 1 January 2020.
On lotteries, the new unified rate of 28% will be applicable from 1 March 2020. The tax is levied on the face value of the lottery tickets, inclusive of the prize money to be distributed to the winners, margin of agents, retailers and distributors.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, declined 2.24% to 12.06. The Nifty December 2019 futures were trading at 12,266.45, a premium of 16.8 points compared with the spot at 12,249.65.
On the options front, the Nifty option chain for 26 December 2019 expiry showed maximum call open interest (OI) of 19.96 lakh contracts at the 12,300 strike price. Call writing was witnessed at 12,400 strike price, which added 2.6 lakh contracts. Call unwinding was seen at the 12,150 strike price, which shed 26,700 contracts.
Maximum put OI of 40.57 lakh contracts was seen at 12,000 strike price. Significant put writing was seen at the 12,200 strike price, which added 8.82 lakh contracts. Put unwinding was witnessed at 12,000 strike price, which shed 1.42 lakh contracts.
The option chain indicates that Nifty will stay between 12,000 and 12,300 in December expiry. The December contracts expire on Thursday, 26 December 2019.
Stocks in Spotlight:
Lemon Tree Hotels surged 3.59% to Rs 60.6 after the hospitality company signed a license agreement for a 44 room Hotel located at Baga, Goa under the company's brand 'Lemon Tree Hotel'. This will be its fifth Hotel in Goa.
CanFin Homes declined 1.02% to Rs 402.35 after credit rating agency India Ratings revised outlook to negative from stable. India Ratings also downgraded ratings on company's NCD from IND AA to IND AAA.
Global Market:
Asian markets dipped on Thursday after the Bank of Japan (BoJ) kept its monetary policy unchanged.
BoJ kept monetary policy steady. The BOJ voted 7-2 to keep short-term interest rates at minus-0.1% and long-term rates at around 0%. The bank downgraded its view on industrial production but said it sees overseas risks as significant, a change from October's statement that they were increasing.
In its statement, the BoJ said: Japan's economy is likely to continue on a moderate expanding trend, as the impact of the slowdown in overseas economies on domestic demand is expected to be limited, although the economy is likely to continue to be affected by the slowdown for the time being.
Meanwhile, China on Thursday released another list of U.S. products that will be exempted from the first round of additional tariffs on U.S. products.
This is the second set of U.S. goods to be excluded from China's first round of tariff countermeasures against the U.S. Section 301 measures, the Customs Tariff Commission of the State Council said in a statement.
The exemption list will be valid from 26 December 2019 to 25 December 2020, said the statement.
In US, House of Representatives voted to impeach President Donald Trump, sending his case to the Senate for trial. Republicans who control that house say they plan to acquit him.
Trump is accused of abusing his office by pressing the government of Ukraine to investigate a potential political rival ahead of next year's presidential election. He also is accused of obstructing efforts by Congress to investigate those allegations.
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