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Indian equity markets hit fresh lifetime highs on encouraging macroeconomic findings of the Economic Survey but succumbed to profit-booking. Nifty 50 hit a new high at 11,171.55 on an intraday basis, up 0.9 per cent but settled with gains of 0.55 per cent at 11,130.40 on close.
Findings of the survey, especially revised gross domestic product growth of 6.75 per cent vs earlier 6.5 per cent in FY18 and higher GDP growth of 7-7.5 per cent in FY19, were the main reasons for the boost to market sentiments. The Economic Survey 2018 bears testimony to the fact that the economy is traversing a higher growth track again,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
GST collections help
Also, robust GST collections in the first five months of the new tax regime and a whopping 50 per cent increase in the number of unique registered indirect tax payers post-GST implementation not only proved the successful implementation of GST but also allayed fears of a shortfall in indirect tax collection.
Nifty Auto was the biggest gainer, up 1.48 per cent, as the Economic Survey pointed out that rural demand, proxied by motorcycle and auto sales, is recovering, though demand is not yet back to pre-demonetisation levels. Hopes were also raised for rationalisation of taxes in the automobile sector. According to media reports, Society of Indian Automobile Manufacturers (SIAM) has suggested that all passenger vehicles be kept under two tax rates under the GST, compared to multiple tax rates levied currently.
Stocks such as Maruti Suzuki, Eicher Motors, Ashok Leyland, Hero MotoCorp, TVS Motor Company and Bajaj Auto gained in the range of 1.64-3.85 per cent.
Meanwhile Maruti Suzuki’s operational performance in the December 2017 quarter was encouraging with year-on-year growth of 11 per cent, 2.6 per cent, 14 per cent and 22 per cent in volumes, realisation, revenues and operating profit, respectively . However, profit after tax rose only 3 per cent y-o-y due to lower other income.
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