Key indices were trading with tiny losses after swinging between gains and losses near the flat line in afternoon trade as profit booking kicked in after Sensex hit fresh record high in intraday trade. At 13:20 IST, the barometer index, the S&P BSE Sensex, was off 37.07 points or 0.12% at 30,397.72. The Nifty 50 index was off 16.20 points or 0.17% at 9,413.25. Firmness in global stocks and reports back home suggesting that the GST Council finalised rates for most goods helped cap losses.
Domestic stocks saw a gap-up opening boosted by reports that the goods and services tax (GST) Council has finalised rates for around 1,150 items of the total of 1,211 and has backed the 1 July 2017 deadline for rolling out the unified indirect tax. Key indices extended early gains and hit fresh intraday high with Sensex scaling record high in morning trade. Stocks slipped into the red in early afternoon trade after trimming gains in mid-morning trade.
The Sensex rose 277.56 points or 0.91% at the day's high of 30,712.35 in morning trade, a record high. The index fell 96.27 points or 0.31% at the day's low of 30,338.52 in early afternoon trade, its lowest level since 15 May 2017. The Nifty rose 76.30 points or 0.8% at the day's high of 9,505.75 in morning trade, its highest level since 17 May 2017. The index fell 38.70 points or 0.41% at the day's low of 9,390.75 in early afternoon trade, its lowest level since 12 May 2017.
The broad market depicted weakness. There were more than two losers for every gainer on BSE. 1,744 shares declined and 799 shares rose. A total of 143 shares were unchanged.
Most metal and mining stocks declined. Bhushan Steel (down 1.68%), Jindal Steel & Power (down 1.28%), Vedanta (down 1.04%), Tata Steel (down 0.22%), NMDC (down 1.25%), Hindalco Industries (down 2.51%), and Steel Authority of India (down 0.08%) edged lower.
JSW Steel (up 0.42%), Hindustan Zinc (up 0.49%) and National Aluminium Company (up 0.75%) gained.
Capital goods stocks dropped after reports suggested GST Council fixed GST tax for capital goods, a key asset for the manufacturing sector at 28%. BEML (down 5.05%), Bharat Heavy Electricals (Bhel) (down 0.73%), Havells India (down 2.67%), L&T (down 0.98%), Thermax (down 2.31%), CG Power & Industries (down 0.5%) and Siemens (down 0.15%) declined.
State Bank of India rose 2.13% after net profit rose 122.72% to Rs 2814.82 crore on 7.83% increase in total income to Rs 57720.10 crore in Q4 March 2017 over Q4 March 2016. The result was announced during trading hours today, 19 May 2017.
Gross non-performing assets (NPAs) stood at Rs 112342.99 crore as on 31 March 2017 as against Rs 108172.32 crore as on 30 December 2016 and Rs 98172.80 crore as on 31 March 2016.
The ratio of gross NPAs to gross advances stood at 6.9% as on 31 March 2017 as against 7.23% as on 31 December 2016 and 6.5% as on 31 March 2016. The ratio of net NPAs to net advances stood at 3.71% as on 31 March 2017 as against 4.24% as on 31 December 2016 and 3.81% as on 31 March 2016.
Meanwhile, the goods and services tax (GST) Council yesterday, 18 May 2017 reportedly backed the 1 July 2017 deadline for rolling out the unified indirect tax that will help create a single national market, and ensured that items of mass consumption bear the least tax burden. The GST Council has yesterday, 18 May 2017, the first day of a two-day GST Council meeting reportedly finalised rates for around 1,150 items of the total of 1,211, The rates for remaining goods and all services will be discussed and finalised today, 19 May 2017, reports indicated.
Items such as cereals, which were taxed earlier at 5%, will now be zero-rated. Coffee, sugar, tea and edible oil will attract a lower GST rate of 5%. Capital goods, a key asset for the manufacturing sector, will be taxed at 28%. Several daily-use items such as hair oil, toothpaste and soap have been kept in the 18%-slab instead of at 28%.
Tax incidence on cars will remain the same. All cars will be taxed at 28% and a 1%, 3% or 15% cess is likely to be levied based on current tax incidence, reports indicated. Motorcycles above 350cc engine capacity will face a cess of 3%.
The rates for gold, beedi, cigarette, agricultural implements, footwear, textiles and biodiesel have not been decided yet. Rates on services have not been finalised yet.
The GST Council had finalised a four-tier rate structure of 5%, 12%, 18% and 28%, with an additional levy or cess on demerit goods, which will fall under the highest tax slab. On 7 April 2017, it passed the five GST bills - Central GST, State GST, Integrated GST, Compensation Bill and the Union Territories GST.
Overseas, European stocks edged higher in early trade as German producer prices posted their strongest annual gain in over five years in April, as higher metals prices drove up the costs for intermediate goods, Germany's statistics office, Destatis, said. Producer prices jumped 3.4% from April last year, which marks the strongest increase since December 2011.
Asian stocks gained after a sluggish start on strong US economic data overnight as some risk appetite returned despite caution over political turbulence in the United States.
US stocks closed higher yesterday, 18 May 2017 following the previous session's brutal selloff, as positive data offered a glimmer of optimism and technology provided an additional fillip to the market.
Investors were still watching Washington closely after reports the US President tried to interfere with an investigation into former National Security Adviser Michael Flynn's ties with Russia. In one recent development, former FBI head Robert Mueller has now been named as special counsel to investigate potential collusion between the Trump campaign and Russia.
US economic data released yesterday, 18 May 2017 showed that initial jobless claims fell by 4,000 in the latest week, the second-lowest reading of the economic recovery, which began eight years ago. Continuing claims were at their lowest level since 1988. Separately, the Philadelphia Fed manufacturing index jumped to a reading of 38.8 in May from 22 in April.
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