Key benchmark indices saw a gap-up opening boosted by reports that the goods and services tax (GST) Council has backed the 1 July 2017 deadline for rolling out the unified indirect tax that will help create a single national market. At 9:30 IST, the barometer index, the S&P BSE Sensex, was up 187.27 points or 0.62% at 30,622.06. The Nifty 50 index was up 54.80 points or 0.58 % at 9,484.25.
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 goods and services tax rate structure for almost all items were finalised at the first day of the 2-day meeting in Srinagar of the GST Council headed by Arun Jaitley yesterday, 18 May 2017.
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%. The reduction in the tax incidence is likely to ease inflation.
The S&P BSE Mid-Cap index was up 0.65%.
The market breadth, indicating the overall health of the market, was strong. On the BSE, 1,194 shares rose and 295 shares fell. A total of 46 shares were unchanged.
Overseas, Asian stocks were mixed as investors were cautious due to uncertainties surrounding US President Donald Trump after reports he tried to influence a federal investigation.
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.
Back home, ITC (up 4.8%), Hindustan Unilever (up 2.64%) and Coal India (up 1.97%) edged higher from the Sensex pack.
Grasim Industries rose 1.21% ahead of its Q4 March 2017 results today, 19 May 2017.
Tata Power Company rose 0.72% ahead of its Q4 March 2017 results today, 19 May 2017.
TCS slipped 0.64%. TCS announced that it has collaborated with Qualcomm incorporated through its Qualcomm Wireless Reach initiative and FHI 360 to implement a digital solution that enriches lives of the fishing community in Senegal, leveraging the transformative power of wireless technologies. The announcement was made after market hours yesterday, 18 May 2017.
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