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Progress on GST to set the trend for equity markets: Analysts

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Mumbai: Domestic macro-economic data, coupled with progress on getting the goods and services tax (GST) bill through parliament will determine the trajectory of the equity markets in the week ahead, market observers say.

What will also impact sentiments will be the position taken by foreign investors ahead of an imminent US interest rate hike, reforms and the pace of recovery in the industrial clusters near Chennai after incessant rains.

“We expect markets to remain volatile with a negative bias ahead of the US Federal Reserves (US Fed) meeting mid-month,” Vaibhav Agarwal, vice president and research head with Angel Broking, told a news agency.

The chances of a US interest rate hike were heightened after the US Fed Chairperson Janet Yellen made hawkish comments, indicating a certain hike in interest rates during the mid-December policy review.

On Wednesday, Yallen had said that she is looking forward to a US interest rate hike which will be seen as a testament to the country’s economic recovery.

A US rate hike could potentially lead to a massive pullback of foreign funds from emerging economies like India.

Furthermore, both the equity markets and the rupee are expected to open Monday’s trade weaker as a key US data – the non-farm payroll figures – showed healthy growth in November.

The data showed that the US economy created 211,000 jobs last month against expectations of 200,000.

“Going into the US Fed policy meet, an EM (emerging market) currency like the rupee will remain under pressure against the US dollar, as foreign funds keep exiting the equity markets,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told a news agency.

“The FPIs (foreign portfolio investors) have been consistently selling since March this year. They are reallocating funds invested in Indian equities which are increasingly being viewed as over-valued,” hr added.

Selling pressure by the FPIs has dragged the rupee’s value lower.

However, on a week-to-week basis, the rupee gained six paise at 66.70 to a US dollar (December 4) from its previous close of 66.76 (November 27). Nevertheless, the rupee had dipped to a 27-month low of 67.01 on Friday.

The value of the Indian rupee has been dented due to selling spree in the Indian debt and equity markets by foreign funds.

Figures from the National Securities Depository Limited (NSDL) showed that the FPIs sold Rs.3,362.77 crore or $503.32 million in the equity and debt markets from November 30 to December 4.

Data with stock exchanges showed that the FPIs sold stocks worth Rs.3,447.17 crore in the period under review ended December 4.

The FPIs have taken out Rs.23,352 crore in August-September. In November, the foreign investors offloaded stocks worth around Rs.9,000 crore.

On the other hand, the domestic institutional investors (DIIs) bought stocks worth Rs.2,308.29 crore during the just-concluded weekly trade.

Besides global factors, upcoming macro-economic data points like the index of industrial production (IIP) and consumer price index (CPI) will affect investors’ appetite to chase prices.

“Investors will keenly follow the CPI and the IIP data, which are crucial indicators of macro economic trends. The data points assume further significance especially after a below-expected eight core industries (ECI) and purchasing mangers index (PMIs) data,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

The monthly industrial production and retail inflation figures are expected to be released on December 11.

In addition to the macro-economic data, progress or lack of it towards getting the GST bill passed in parliament will be a key trigger going forward, elaborated Pankaj Sharma, head of equities for Equirus Securities.

“Next week, we think the markets would strongly focus more on what stand the opposition parties take on the GST bill and how the winter session progresses,” Sharma told a news agency.

“If both the government and the (principal opposition party) Congress reach a resolution on GST, it will be positive for the markets. Otherwise, we expect the markets to remain range bound next week.”

The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline, as just parliamentary approval is not sufficient for implementing the pan-India indirect tax regime.

The bill has cleared the Lok Sabha and is now with the Rajya Sabha, where the Congress and other parties have demanded a series of amendments.

The amended bill will be tabled in the Rajya Sabha and if passed, will again have to clear the Lok Sabha. Thereafter, it has to clear half of the 29 state assemblies before it is sent to President Pranab Mukherjee for his assent.

During the previous week, both the bellwether indices of the Indian equity markets ended in the red.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) declined by 490.09 points or 1.87 percent to 25,638.11 points from its previous weekly close at 26,128.20 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) receded during the weekly trade ended December 4. It ended lower by 160.8 points or 2.02 percent to 7,781.90 points.

(IANS, Rohit Vaid)
(Picture credit:www.skgadvocates.com)

 

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Medical Fraternity Asks Central Government To Withdraw GST on Hand Sanitizers, Masks

Hospitals, ambulance, nursing and support staff desperately require sanitisers, masks and other protective equipment in 24x7 mode

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, hospitals, ambulance, nursing and support staff desperately require sanitisers, masks and other protective equipment in 24x7 mode. Pixabay

In the wake of the increasing threat of Covid-19, the medical fraternity has asked the government to consider withdrawing GST on hand sanitiser and masks in these ‘difficult times’.

“We understand that certain ingredients (in sanitisers) are taxable, still in these difficult times or at least for next few months, hand sanitisers should not attract GST,” said Sandeep Sharma, President of Indian Medical Association’s (IMA) Delhi branch.

According to Sharma, hospitals, ambulance, nursing and support staff desperately require sanitisers, masks and other protective equipment in 24×7 mode.

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“We require all these items in bulk, but at present we are paying 18 per cent GST on sanitisers and 5 per cent on masks etc. Besides, medical practitioners and public at large also require hand sanitisers and masks as a major preventive measure to keep away from the highly infectious virus. It would be a big relief for people if GST is not levied on these items,” said Sharma, who coordinates with all leading chains of top private hospitals and doctors.

Meanwhile, the President of the Trained Nurses Association of India (TNAI), Roy K George, has appealed to all the state governments to ensure urgent and smooth supply of personal protective equipment (PPE), and essential items like masks and sanitisers to serve patients and combat the spread of the infectious disease to the medical staff.

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In the wake of the increasing threat of Covid-19, the medical fraternity has asked the government to consider withdrawing GST on hand sanitiser and masks in these ‘difficult times’. Pixabay

“Our state associations, particularly from Uttar Pradesh and Maharashtra, have informed us that adequate supply of PPEs, masks and sanitisers has to be provided to the nurses and other medical staff,” said George, adding, “What happened in Mumbai, where 26 nurses tested positive for Covid-19 in private hospitals, suggest that frontline soldiers of the this war against virus need more attention in terms of equipments and medical kits.”

TNAI, founded in 1908, has 6 lakh nurses as its members, making it one of the largest associations of nurses in the world. It has postponed all its celebrations related to the 200th birth anniversary of Florence Nightingale, legendary social reformer and founder of modern nursing.

ALSO READ: Actor Arjun Kapoor Pledges To Donate To Various Coronavirus Relief Funds

While nurses world over combat the dreaded infectious disease, the WHO has declared 2020 as the Year of the Nurse and Midwife in honour of Florence Nightingale. (IANS)