Late recovery helps Sensex gain, Nifty begins July series higher ahead of GST rollout

Recovery in late trade helped the market close higher on Friday, with the Nifty starting July series on a positive note as investors maintained caution ahead of the rollout of much awaited indirect tax reform, the Goods and Services Tax (GST), with effect from midnight today.

The 30-share BSE Sensex was up 64.09 points at 30,921.61 while the 50-share NSE Nifty rose 16.80 points to 9,520.90 after hitting an intraday low of 9,448.75, led by stock specific buying ahead of GST implementation.

Healthy rollover numbers suggest that traders are still positive, and are expecting the headwinds related to the GST implementations to be over soon, Anand James, chief market strategist, Geojit Financial Services said.

The broader markets outperformed benchmarks, with the BSE Midcap and Smallcap indices rising 0.6 percent each on positive breadth. About 1,347 shares advanced against 1,222 declining shares on the exchange.

Select FMCG stocks gained strength ahead of the tax structure reform, while healthcare stocks continued recovery from their recent fall. Select auto and banking & financial stocks were under pressure.

ITC ended at record closing high, up 4 percent as CLSA retained its buy call on the stock with a target price of Rs 375, citing likely neutral GST outcome.

“With GST set to roll-out from July 1, there still is uncertainty on rates for tobacco; our calculation suggests a decline assuming additional duty surcharge (ADS) is not charged on top of GST & cess. We, however, model in a neutral outcome which itself would drive double-digit earnings growth after two years,” the research house reasoned.

Yes Bank gained 1.7 percent. With maintaining a buy call and target price of Rs 1,832, Edelweiss said amid current asset quality hullaballo, the bank’s strengths – loan underwriting & structuring and longer term business momentum (retailisation) – would aid it clock best-in-class return ratios. The bank has limited exposure to 12 NPA accounts, which are referred under Insolvency & Bankruptcy Code.
Central Depository Services (CDSL), the country’s second largest securities depository, had a stellar performance on debut. The stock price closed at Rs 261.60, up 75.57 percent over issue price of Rs 149.