Market edges higher amid initial volatility

Key benchmark indices edged higher amid initial volatility wherein indices alternately hovered between the positive and negative terrain in a narrow range near the previous session's close. At 9:25 IST, the barometer index, the S&P BSE Sensex, was up 21.59 points or 0.08% at 26,149.79. The Nifty 50 index was up 3.45 points or 0.04% at 7,946.15. Auto and realty stocks led gains on the bourses.

The market breadth indicating the overall health of the market was strong. On BSE, 849 shares rose and 296 shares fell. A total of 80 shares were unchanged. The BSE Mid-Cap index was up 0.36%. The BSE Small-Cap index was up 0.43%. Both these indices outperformed the Sensex.

In overseas markets, Asian stocks fell led by losses in Chinese stocks as material and consumer-staple shares dropped. US stocks closed mixed on Friday, 27 November 2015.

Back home, Maruti Suzuki India (up 1.48%), Tata Motors (up 1.22%) and Mahindra & Mahindra (M&M) (up 1.01%) were among the leading gainers from the 30-share Sensex pack.

Tata Global Beverages (TGBL) was flat at Rs 136.95. Tata Coffee gained 0.78%. Tata Coffee (TCL) and its holding company, Tata Global Beverages (TGBL), have jointly developed an instant coffee product for the Indian market, which was launched on Sunday, 29 November 2015, by TGBL under the brand name 'Tata Coffee Grand'. The product will be manufactured by TCL and marketed and distributed by TGBL. The announcement was made before trading hours today, 30 November 2015.

In macroeconomic data, the government will release India's gross domestic product (GDP) data for Q2 September 2015 today, 30 November 2015. India's GDP grew 7% in Q1 June 2015 over Q1 June 2014.

The Reserve Bank of India (RBI) will announce its fifth bi-monthly monetary policy decision at 11:00 IST tomorrow, 1 December 2015. There are expectations that the RBI may hold rates steady after its policy meet. In the fourth bi-monthly monetary policy on 29 September 2015, the central bank reduced the policy repo rate by 50 basis points from 7.25% to 6.75%. The RBI has kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liability (NDTL).

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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