IGI Logo

Indian equity benchmarks continued to trade in high spirit in noon session, on account of broad based buying in blue chip counters. Traders were energized as foreign investors turned net buyers after a gap of eight days of being net sellers. The foreign portfolio investors bought equities worth 590.58, according to National Stock Exchange data. Sentiments were also upbeat with Icra Ratings’ statement that credit quality of corporates has strengthened further in the first half of the current fiscal with rating upgrades being more than three times that of downgrades, carrying on with the momentum since early FY22. Broader indices were trading with healthy gains in the range of 1.99%-1.42%. All sectoral indices on BSE were into positive territory, stocks from Bankex, Metal and IT counters were the prominent gainers. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 2578: 759; while 129 shares remained unchanged. On the IPO front, Electronics Mart India's initial public offer (IPO) received a strong demand, especially from retail investors’ category, with bids recording 35 per cent of the issue size within the first two hours of Day 1 bidding process. The IPO is opened for public bidding from October 4 to October 7. On the global front, Asian markets were trading in green.

The BSE Sensex is currently trading at 57934.71, up by 1145.90 points or 2.02% after trading in a range of 57506.65 and 58035.69. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.99%, while Small cap index was up by 1.42%.

The top gaining sectoral indices on the BSE were Bankex up by 2.50%, Metal up by 2.39%, IT up by 2.38%, Power up by 2.28% and Utilities was up by 2.26%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Indusind Bank up by 4.84%, Bajaj Finance up by 3.64%, TCS up by 2.95%, HDFC up by 2.85% and Bajaj Finserv was up by 2.69%. On the flip side, Power Grid down by 0.93% and Dr. Reddy's Lab was down by 0.22% were the only losers.

Meanwhile, Federation of Indian Export Organizations (FIEO) has urged Union Finance Minister Nirmala Sitharaman to extend the Goods and Services Tax (GST) exemption on export freight that lapsed on September 30. The FIEO expressed concern that if the exemption is not extended, it will add to their liquidity challenges amid rising interest rates. Since its introduction in 2018, the government had extended the exemption twice till September this year.

FIEO President A Sakthivel has said that overseas freight rates had increased by 300–350 per cent from pre–Covid levels. Now, there has been a slight decline in such rates, but these are still 200–250 per cent higher than that of the 2019 levels. If the exemption is not renewed, exporters will be required to pay GST at 18 per cent on export freight, which will increase the logistical costs for Indian goods in the international market. Due to the recent increase in interest rates by the Reserve Bank of India, the GST payments on such high freight cost will have a significant negative impact on exporters' liquidity. Global trade is entering a very challenging era as countries are facing high inflation, with an impending recession impacting the demand.

Sakthivel said ‘this is evident from India's slowing export growth rate between April and August. Indian exporters are trying their level best despite the rupee being one of the most resilient currencies in the world, thus not providing less competitiveness to our exports as compared to our competitors as most currencies have depreciated at a much steeper pace.’ He pointed out that the GST on export freight is “revenue neutral” as exporters will pay the same, and subsequently get a refund but with a lag of 2-3 months, blocking their capital. He stated 'This may augment liquidity of the government but at the cost of exporters. Since the cost of credit for exporters is much high, an exemption will help the sector maintain better liquidity, which is the need of the hour.'

The CNX Nifty is currently trading at 17237.15, up by 349.80 points or 2.07% after trading in a range of 17117.30 and 17257.55. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.86%, Adani Ports up by 4.47%, Hero MotoCorp up by 3.60%, Bajaj Finance up by 3.57% and Adani Enterprises was up by 3.28%. On the flip side, Power Grid down by 1.00% and Dr. Reddy's Lab was down by 0.19% were the few losers.

Asian markets were trading higher; Taiwan Weighted strengthened 276.04 points or 2.08% to 13,576.52, KOSPI rose 53.89 points or 2.5% to 2,209.38, Straits Times advanced 24.82 points or 0.8% to 3,131.91, Jakarta Composite soared 55.90 points or 0.8% to 7,065.62 and Nikkei 225 was up by 776.42 points or 2.96% to 26,992.21.

Above views are of the author and not of the website kindly read disclaimer