2017 gave a fresh start to the market with Nifty standing 8179.50 points, definitely going for a Bull Run.
2017 Booked its 28.54% return by ending the year.
Likewise Sensex Booked 27.27% return by ending 2017, currently standing at 34,056.83 points.
2017 was definitely a market of twist and turns, be it GST or be it Kim Jong-Un.
Some key Factors which helped market to go for a Bull Run.
The government increased the Security Transaction Tax (STT) on sale of an option in securities, where option is not exercised from 0.017 per cent to 0.05 per cent.
The government said foreign entities would be allowed to own up to 15 per cent stake in domestic stock exchanges, a move that would help boost their global competitiveness.
Which helped to attract more investments in India by creating stronger links with the best foreign exchanges.
Movements in Stock market in Budget –
When Jaitley took his seat after finishing his speech, the Sensex was more than 300 points up and the Nifty was up by 80. Both indices seemed to show no signs of slowing their rise.
The rupee too has added of positivity to Budget 2017 day+ , appreciating 24 paise, to Rs 67.63 to the dollar.
Budget definitely forced market to go for a Bull Rally.
Followed by GST the size of the BJP victory in March 2017 came as a surprise and emboldened investors to make optimistic bets on India’s future under its now hugely popular prime minister, Narendra Modi. On the first trading day after the BJP’s victory in UP, the National Stock Exchange’s benchmark equity index, the Nifty, touched a all-time high of 9,122 before closing at 9,087 – the first time it has closed above the 9,000 mark in its trading history of just over 20 years.
BJP being the ruling party and a BIG VICTORY in Uttar Pradesh was a big Support for BULLS.
Everything is Globally connected of course, As US President Mr. Donald Trump took his seat. H-1B Visa rolled on the floor. Indian IT stocks took a beating on the bourses, falling up to 9 percent on a same day following news that a legislation has been introduced in the US House of Representatives. This seeks among other things for more than doubling the minimum salary of H-1B visa holders to $130,000, making it difficult for firms to use the programme to replace American employees with foreign workers, including from India.
Market cap of IT stocks eroded sharply by Rs 44,000 crore on the bourses.
The Bombay Stock Exchange Index went down by 2.79 percent to 9602.79.
Compared to that, the broader Sensex was marginally down by 0.30 percent at 27760.38.
The bill on the much-awaited Goods and Services Tax or GST was been cleared by the Rajya Sabha,. It has been dubbed as the biggest tax reform in independent India. GST intends to dismantle inter-state barriers to trade in goods and services, and would be far simpler than the current system, where a good is taxed multiple times at different rates.
The GST replaced at least 17 state and federal levies, making the movement of goods faster and cheaper across a market holding 1.3 billion consumers.
Here is a closer look at top stocks that stand to gain from GST.
Maruti Suzuki India Ltd
The transportation time and the overall cost for inter-state transfer the goods came down by surpassing various check points.The cost for the logistics and supply chain inventory will be decreased by almost 30%-40%.
Maruti which wa trading at 21.22 times fiscal year 2018 price-to-earnings (P/E), Its shares touched a record high of Rs.5,037.90.
The country’s top carmaker’s June quarter profit rose 23%, as it benefited from lower material costs and a surge in income from activities other than its core business operations.
Asian Paints Ltd
Operational profitability boosted by 200-300 basis points for the paint maker, on the back of savings from warehouse rationalisation, lower carrying costs for inventory and reduction in overall tax rates. Overall tax incidence came down as GST rate became 18%.
Asian Paints’ June quarter consolidated net profit rose 18.46% to Rs.552.56 crore, driving the stock to a record high of Rs.1,152.65 on 28 July.
18% GST and the Cement maker reported a 79% growth in consolidated net profit at Rs..239.12 crore for the quarter ended June, but reported a 1.3% decline in cement sales due to muted demand in some markets.
Its express logistics segment witnessed higher volume growth. GST implementation lead to lower transit time and thereby generate higher truck utilisation. It facilitated seamless inter-state flow of goods, which idirectly accelerate the demand for logistics services.
GST tax rate to trickle down to 18%-20%, from the pre tax rate of 22%-24%. Reduction in taxes lead to an increase in average ticket price (ATP) and higher revenue for the multiplex operator.
Havells India Ltd
For Havells, the lowering of tax rates, at consumer level, from 26%-29% to 18% lead to a combination of volume increase and margin expansion. Increase in addressable market size, as most of the product segments such as fans, lighting, water heaters, and air coolers, in which the company operates has large unorganized markets, which came under the tax net post GST and provide level playing field for all players.
The electrical goods maker reported a 36.27% increase in stand-alone net profit at Rs.145.58 crore for the quarter ended June.
Crompton Greaves Consumer Electrical Ltd (CGCEL)
The shift from the unorganised to the organised sector post GST, Ended up benefitting the company. Fans which make up 45% of sales for CGCEL had 25% of sales from the unorganised sector, while lighting, which is the second-largest category (30% of company’s sales), had 40% sales from the unorganised sector.
CGCEL is the demerged arm of Crompton Greaves Ltd. and the demerger was approved in March. The company’s net profit jumped 38.03% to Rs.91.94 crore, from the preceding March quarter.
Dish TV India Ltd
The reduction in indirect taxes from around 23%-24%, to around 18-20%, part of which the company was able to retain, and there was a higher availability of input credits on set top boxes.
Some ups and down and then came some Quiting decisions.
The fortunes of the Infosys stock, took a beating. A share buyback proposal, its approval, the daddy resignation of Vishal Sikka as the company’s MD (Managing Director) and CEO (Chief Executive Officer) and a board meeting later, the IT giant’s scrip tanked over 5 per cent on the Nifty to hit the intra day low of Rs 870 on Monday. After it the last two trading sessions the Infosys stock took a beating of 15 per cent.
With Infosys’ first non-founder CEO resigning and an ugly spat between the board and founder Narayana Murthy coming out in the open, the stock slipped 13 per cent in intra day trade to touch its multi-year low of Rs 884.20. Despite paring to some extent and closing , the IT behemoth’s market capitalisation tanked by nearly Rs 30,000 crore+ .
The stock should have moved up as a result of the buyback as the price was high at Rs 1,150 but it has failed to arrest the breakdown due to the overall negative sentiment.
This played a major role in showing how Indian Sentiments affects Market.
NORTH KOREAN CRISIS
“The biggest determinant of the financial markets movement across the world will be what North Korea does next.”
The fundaments took a beating for Kim Jong Un. The nation launched an ICBM (intercontinental ballistic missile) at full range. South Korean media reported that a North Korean ICBM was on the move. Investors appear to be sitting on the edge with a keen eye on Pyongyang’s activities. Further escalation bounded to rattle financial market.
On the other hand the domestic equity market witnessed rangebound trade throughout the week gone by owing to mixed global cues and the North Korean crisis.
Fears that Kim Jong-un-led North Korea may launch ICBM missile anytime later restricted investors across the globe from entering the market, thus pushing them to safe havens like gold.
Stock markets in India had a roller coaster ride on 18 December, the day the Gujarat election results came in.
Initial trends suggested that the ruling BJP was going to lose the state which resulted in the Sensex opening with a cut of 98 points and went on to crash 866 points compared to the previous close.
However, the moment the trend changed in favour of the BJP, the Sensex started moving up and finally closed the day with a 139 points gain—up by more than 1,000 points from the days low.
Politics Definitely plays a major role in Indian Stock Market.
Shares of 2G scam-linked companies rose up to 20 per cent in day after a special CBI court in Delhi acquitted all the accused in the 2G scam case.
Shares of Unitech rallied 11.86 per cent to close at Rs 7.92 on BSE. Unitech MD Sanjay Chandra was one of the accused in the scam. Shares of DB Realty hit 20 per cent upper circuit limit at Rs 43.70.
Shares of Reliance Communication rose4.05 per cent to close at Rs 17.97. Later giving a return of 120% in 5 days, after Mukesh Ambani talking about acquiring RCOM.
It was a journey of Bull and Bear running together, but its Bull who emerged as a winner and helped Indian Stock Market to attain new highs.
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