Mumbai: Markets closed with modest gains on Friday, giving a guarded response to the goods and service tax (GST) council’s decision to reduce tax rate on a host of daily-use items.
After some dithering, the 30-share Sensex scaled the day’s high of 33,380.42 after the GST Council slashed tax rates, but closed at 33,314.56, a moderate gain of 63.63 points, or 0.19%. The gauge had inched up 32.12 points on Thursday. The NSE 50-share index Nifty finished higher by 12.80 points, or 0.12%, at 10,321.75.
For the week, the Sensex recorded a fall of 371 points, or 1.10%, and the NSE Nifty 130.75 points, or 1.25%.
The GST Council on Friday provided some relief to several sectors by slashing tax rates on a host of consumer items—from chewing gums to detergents—to 18% from the current 28%. It also trimmed the list of items attracting the top 28% tax rate to just 50, from the 227 previously. In effect, the Council, at its 23rd meet, slashed rates on 177 goods.
“The outcome of the GST Council will decide the trajectory of some sectors like consumer durables, auto ancillaries, infra and building products. Weaknesses in global market and rising oil prices may push investors to turn conservative on the board market,” said Vinod Nair, head of research, Geojit Financial Services Ltd.
The country’s largest lender, SBI, surged 6.20% to Rs333.20—the maximum jump in the Sensex kitty—after the company posted strong quarterly earnings. L&T followed with a gain of 3.90% after the company’s construction arm won big job orders. Other big gainers included Hindustan Unilever, M&M, ICICI Bank, Bajaj Auto and PowerGrid, rising up to 2.99%.
Domestic institutional investors stuck to their buying behaviour, picking up shares net Rs231.25 crore. Outflows from foreign portfolio investors continued at a net Rs713.75 crore on Thursday, as per provisional data. BSE capital goods took the pole position, gaining 1.87%. Consumer durables, banking and PSU advanced too. The broader market showed a mixed movement, with BSE small-cap rising 0.07% and mid-cap declining 0.09%.
Other Asian shares traded mixed following political developments in Saudi Arabia and a surging oil, tracking overnight weakness at Wall Street amid fears of delay in US corporate tax cut. European shares were down.