GST rate cut, upbeat Q3 results propel Nifty50 to 10,900-mark

Indian equity

Extending gains for the third consecutive session, the key Indian equity indices on Friday zoomed to new highs, with the NSE Nifty50 crossing the psychologically important 10,900-mark for the first time.

According to market observers, positive global cues, coupled with upbeat quarterly corporate earnings and healthy buying in banking stocks, gave momentum to the upward rally of the key indices.

In addition, the Goods and Services Tax (GST) Council’s decision on Thursday to slash the GST rate on 54 services and 29 items, including old and used motor vehicles, public transport buses run on bio-fuels, sugar-boiled confectionery and packaged water, cheered investors.

The wider Nifty50 of the National Stock Exchange (NSE) touched a record intra-day high of 10,906.85 points.

However, the Nifty50 failed to sustain the 10,900-mark and closed at a new high of 10,894.70 points — higher by 77.70 points, or 0.72 per cent, from its previous close.

On the BSE, the barometer 30-scrip Sensitive Index (Sensex) provisionally closed at a new high of 35,511.58 points — up 251.29 points or 0.71 per cent from its previous session’s close — after touching a fresh high of 35,542.17 points during intra-day trade.

In contrast, the BSE market breadth remained bearish as 1,506 stocks declined as compared to 1,393 advances.

“Markets surged higher in late afternoon trade to yet another new record high after opening on a negative note,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

“Sentiments were boosted on the back of firmness in global markets and slashing the tax rate on 54 services and 29 items by the GST council in its latest meet and also the proposal for simplifying return filing process for businesses,” he added.

In the broader markets, the S&P BSE mid-cap index fell sharply to close higher by 0.77 per cent and the small-cap index by 0.88 per cent.

Vinod Nair, Head of Research, Geojit Financial Services, said: “The government’s decision to cut GST rate for a few more items and a good start to earnings season added energy in the market.

“The market is anticipating a sea change in the earnings with a growth of 15-20 per cent in PAT (profit after tax) led by revamp in businesses and low base effect. Moreover, positive trend in global market and drop in crude prices influenced buying pattern.”

On the currency front, the Indian rupee strengthened by three paise to close flat at 63.85 against the US dollar.

Provisional data with the exchanges showed that foreign institutional investors purchased scrips worth Rs 988.25 crore, and the domestic institutional investors worth Rs 209.86 crore.

“Markets ended with spectacular record highs and closed in green for the third straight time, led by financial stocks. Both indices posted their seventh consecutive weekly gains,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

All the 19 sub-indices of the BSE ended with gains. The S&P BSE banking index surged the most — up 456.01 points — followed by capital goods index by 183.62 points and metals index by 137.48 points.

Major Sensex gainers on Friday were: Adani Ports, up 4.68 per cent at Rs 433.75; Yes Bank, up 2.37 per cent at Rs 348.30; ICICI Bank, up 2.15 per cent at Rs 353.55; State Bank of India, up 2.08 per cent at Rs 309.05; and Tata Consultancy Services, up 1.53 per cent at Rs 2,954.75.

Major Sensex losers were: Infosys, down 0.82 per cent at Rs 1,143.25; Sun Pharma, down 0.74 per cent at Rs 572; Power Grid, down 0.61 per cent at Rs 196; Maruti Suzuki, down 0.40 per cent at Rs 9,321.35; and ONGC, down 0.23 per cent at Rs 193.60.