GST rate slabs to be reduced to three in coming months- Daily Market update-25 July 2024 | Globe Capital Market LTD.
25-Jul-2024
GST rate slabs to be reduced to three in coming months- Daily Market update-25 July 2024

India is working on simplifying the country’s sales tax regime by introducing three slabs instead of the existing four rates, a top tax official said. “Too many rates in goods and services tax are leading to classification disputes and that needs to be resolved,” Sanjay Agarwal, chairman of the Central Board of Indirect Taxes and Customs said in an interview Wednesday. Agarwal said GST compliance has improved since the tax was introduced in July 2017 and revenue growth has stabilized. That gives the government room to review the rates to simplify the system, he said. Revenue from GST has been steadily rising over the years and increased 11.7% in the fiscal year through March 2024. The collections rose to 1.74 trillion rupees in June.

Overview and Outlook

Global Stock Market Today

  • US equity markets settled lower in range 1.25% to 3.50%.
  • European equity markets also settled lower in range 0.15% to 1%.
  • Asian equity markets are trading lower.
  • GIFT Nifty is down by 100 points, Nifty futures likely to open around 24150 levels (as on 8:20AM).

 

News highlights from across the globe

  • Markets in Asia-Pacific region trading lower on Thursday as technology stocks tumbled on Wall Street after traders started to pull back from artificial intelligence driven frenzy.
  • US stocks plummeted following a disappointing start to the mega-cap earnings season. After driving the rally for most of 2024, big tech pulled the markets down on Wednesday, with the S&P 500 seeing its sharpest decline since December. The Nasdaq 100 ended 3.7% as Apple Inc. dragged.
  • Brent crude was trading 0.40% lower at $81.38 a barrel.

 

Important news updates from the domestic front

  • Axis Bank Q1 FY25 (Standalone, YoY) NII up 12% at Rs 13,448 crore versus Rs 11,959 crore. Net profit up 4% at Rs 6,035 crore versus Rs 5,797 crore. Gross NPA at 1.54% versus 1.43% (QoQ). Net NPA at 0.34% versus 0.31% (QoQ).
  • L&T Q1 FY25 (Consolidated, YoY) Revenue up 15% at Rs 55,120 crore versus Rs 47,882 crore (Bloomberg estimate Rs 53,601 crore). Ebitda up 15% at Rs 5,615 crore versus Rs 4,867 crore (Bloomberg estimates Rs 5,540 crore). Ebitda margin at 10.20% versus 10.16% (Bloomberg estimate 10.3%). Net profit up 10.4% at Rs 3,440 crore versus Rs 3,116 crore (Bloomberg Rs 2,639 crore).
  • SBI Life Q1 FY25 (YoY) Net premium income up 15.3% at Rs 15,106 crore versus Rs 13,105 crore. Net profit up 36.5% at Rs 520 crore versus Rs 381 crore (Bloomberg estimate Rs 419 crore).
  • SBI signed a non-binding MoU worth £750 million as a as a joint investment with the UK’s Foreign, Commonwealth and Development Office.
  • RBL Bank: Hong Kong-based Baring Private Equity Asia plans to exit the company Ltd. by divesting its entire 7.9% equity via open market transactions on Thursday. The foreign portfolio investor, through its vehicle Maple II BV, has offered to sell 4.78 crore shares at a floor price of Rs 226 per share, according to people in the know.
  • Shipping Corporation of India will explore possible business collaborations with central and state enterprises and private entities.
  • DishTV approved setting up a new subsidiary for digital platforms and ancillary services.
  • Nestle India and Dr Reddy’s Laboratories have announced the formation of a joint venture, which will be called Dr. Reddy’s and Nestlé Health Science Ltd. The partnership was reportedly made to combine the established and reputed range of nutritional products of Nestlé Health Science with the nutraceutical portfolios and established market share of Dr. Reddy’s Laboratories in India.
  • BSE received SEBI’s nod to act as a research analyst and investment adviser administration body. The company is to undertake the business of an administrative and supervisory body effective July 25.

 

Nifty Overview & Outlook

After the Budget day, the Indian benchmark index Nifty started the session on a negative note and maintained a downward trend throughout the day following the announcement of increased equity taxes by the Finance Minister. However, a recovery in Reliance Industries, following a sharp decline over three trading sessions, cushioned the benchmark index, resulting in a marginal loss on closing basis. Nifty closed 0.3% lower, while Bank Nifty continued to underperform with a 0.9% decline, primarily impacted by Axis Bank among private banks.

In contrast, broader markets outperformed the benchmark index, with the Midcap and Smallcap indices closing higher by 0.7% and 1.9%, respectively. The Nifty Media index showed the strongest performance, rising by 2.5%, followed by the Nifty Energy index which gained 1.2%. Conversely, Nifty Bank recorded the largest decline, falling by 0.9%. Market breadth remained largely positive, with 344 stocks advancing and 154 declining, indicating weakness primarily in the banking and non-banking financial frontline stocks.

From a technical perspective, Nifty closed with slight losses, continuing its consolidation phase after recent volatility. With, the ongoing formation of a Head & Shoulders pattern we maintain our current key resistance levels at 24560 and 24690, with support levels seen at 24330 and 24140. Activation of the Head & Shoulders pattern would occur below 24140, while its formation would be invalidated upon breaking the recent peak.

 

Derivatives Overview & Outlook

Yesterday, short buildup was seen in Nifty and Banknifty futures with increase in open interest by 8.7% and 12.2% respectively. On the other hand, Finnifty futures open interest shed around 5% on long unwinding.

Nifty and Banknifty futures have rolled 48% & 47% of open interest each into next contracts so far.

On options front, put writing along with call writing was seen at multiple strikes and maximum positions are at 24000 PE and 25000 CE closely followed by 24500 CE.

 

Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 5131 Cr in the cash segment, sold stocks futures worth Rs 3008 Cr and also sold index futures worth Rs 3588 Cr.  DIIs were net buyer in the cash segment to the tune of Rs 3137 Cr.

 

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 24500-24600; Supports 24100-24300

Banknifty – Resistances 52000-52400; Supports 50800-50600

Finnifty – Resistances 23400-23600; Supports 23000-22950

 

Security in Ban Today: IDEA, INDIACEM.

 

Imporatnt Results Today: ADANIGREEN, ASHOKLEY, AUBANK, CANBK, CYIENT, DLF, LAURUSLABS, NESTLEIND, PNBHOUSING.

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