Key indices may edge lower in early trade tracking weakness in Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 17.50 points at the opening bell. In overseas markets, Asian stocks fell led by losses in material and consumer-staple shares. US stocks closed mixed on Friday, 27 November 2015.
Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 519.25 crore on Friday, 27 November 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 900.48 crore on Friday, 27 November 2015, as per provisional data.
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. 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.
Meanwhile, amid expectations that a meeting between Prime Minister Narendra Modi and Congress president Sonia Gandhi will help break the impasse over the passage of the Goods and Services Tax (GST) constitutional amendment bill in parliament, key benchmark indices clocked modest gains on Friday, 27 November 2015. The Sensex gained 169.57 points or 0.65% to settle at 26,128.20, its highest closing level since 6 November 2015.
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