India : Sensex closes rangebound session flat after passage of GST Bill

Equity benchmarks ended flat with a positive bias after a consolidation on Thursday as investors digested the passage of a long-awaited Goods & Services Tax (GST) Bill. The Sensex started off on a strong note, rallying more than 200 points in opening but immediately wiped out gains to trade in a tight range for rest of the session.The 30-share BSE Sensex was up 16.86 points at 27714.37 and the Nifty gained 6.25 points at 8551.10 while the broader markets mildly outperformed benchmarks, up 0.4 percent on positive breadth. About 1432 shares advanced against 1267 declining shares on the BSE.

“Indian equities have been rallying over the last quarter in anticipation of the GST legislation going through. With the event out of the way, near term we look for consolidation and shedding of some froth,” Bharat Iyer of JP Morgan says.

However, he remains positive with one year view.

The market rallied more than 21 percent on more than Rs 47,000 crore worth of inflow of foreign money since March, especially on hopes of the GST Bill getting passed in the monsoon session of Parliament and also due to delay in rate hike by Federal Reserve.

The Rajya Sabha passed the GST Constitutional Amendment Bill in a bi-partisan manner on Wednesday, paving the way for the introduction of GST regime in India.

Sanjeev Prasad of Kotak Institutional Equities says the Government should be able to implement GST from April 1, 2017 although a significant amount of legislative and administrative process remains to be completed.

It will remove barriers to trade, improve economic efficiency and lead to higher growth in the long run, says Fitch Ratings.

Tata Motors surged 4.4 percent after reporting a 51 percent growth YoY in July US sales by Jaguar Land Rover.

Lupin lost 1.3 percent after Credit Suisse has downgraded the stock to underperform as the risk-reward is no longer favourable with the stock pricing in upside from clearance of Goa facility.

Tata Steel was the biggest gainer among Sensex 30 stocks, up 4.6 percent followed by Sun Pharma, Adani Ports, Bharti Airtel, Hero Motocorp and NTPC with 1-2 percent upside while Infosys and Asian Paints fell over a percent.

At the time of writing this article, European markets were trading marginally higher ahead of Bank of England decision. Asian stocks closed higher with Nikkei rising over a percent on weaker yen against US dollar.