Firm domestic cues buoy equity markets
Mumbai, July 28 (IANS) Indian equity markets traded in the green on Thursday, supported by increased chances of the GST (Goods and Services Tax) Bill getting parliament’s nod during its ongoing monsoon session and a firm rupee.
Consequently, both the key indices traded higher during the late-afternoon session, as healthy buying was witnessed in consumer durables, automobiles and healthcare stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up 23.50 points or 0.27 per cent to 8,639.30 points.
The BSE Sensex, which opened at 28,108.78 points, traded at 28,119.44 points (at 2.30 p.m.) — up 95.11 points or 0.34 per cent from the previous close at 28,024.33 points.
The Sensex has so far touched a high of 28,151.99 points and a low of 28,064.90 points during the intra-day trade.
The BSE market breadth was slightly tilted in favour of the bulls — with 1,464 advances and 1,091 declines.
On Wednesday, the benchmark indices ended on a flat-to-positive note due to speculative buying.
Initially on Thursday, the benchmark indices opened on a flat-to-positive note on the back of firm domestic cues, despite a negative trend in the Asian markets.
Besides, increased chances of the GST Bill getting passed during parliament’s ongoing monsoon session enhanced investors’ risk-taking appetite.
Investors were hopeful about the bill’s passage after the Union Cabinet on Wednesday approved key changes in the proposed legislation.
Government sources reported that the proposal for one per cent additional tax on inter-state sale had been dropped from the constitutional amendment bill.
The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority.
However, gains were capped due to negative Asian markets, especially the Japanese indices which fell ahead of the Bank of Japan’s (BoJ) monetary policy review.
In addition, investors were spooked after the US Fed’s FOMC (Federal Open Market Committee) gave signals of an upcoming rate-hike decision.
A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
Volatility was also flared by the futures and options (F&O) expiry. Market observers cited the liquidation of long positions as a key reason that has hampered the market’s upward trajectory.
Further, lower global crude oil prices and disappointing quarterly results eroded investors’ confidence.
“Increased chances of a rate hike in the US after the FOMC meet and negative Asian markets capped gains. However, higher chances of the GST Bill getting passed supported prices at lower levels,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, banking stocks faced profit booking at higher levels.
“Most auto sector stocks traded firm. Downside in USD/INR futures is likely to limit downside in Nifty,” Desai noted.