Sensex ends flat after rising 224 points

Stock broker looking at screen outside the Bombay Stock Exchange

The benchmark Sensex on Thursday rose as much as 224 points, or 0.8 per cent, after the Rajva Sabha passed the much-awaited goods and service tax (GST) bill, but gave up all the gains to end little changed on concerns over implementation and impact on corporates. The 30-share bluechip index closed at 27,714.37, up 16.86 points, or 0.06 per cent, before climbing to a high of 27,921.91.

Although the Street welcomed the passage of the landmark GST bill by the upper house on Wednesday night, concerns remained over the further work needed for successful implementation and time lapse before its impact on corporate earnings. The broader markets also ended little changed, while the market breadth too remained mixed with slight positive bias.

The government has set a target date of April 1, 2017 for the tax to take effect. "GST Is a reform overestimated in near term, and underestimated for long term," said Nirmal Jain, CMD, IIFL Group.

Shares of finance and logistics companies dropped on profit-taking, while automobile stocks gained.

"Most stocks that stand to gain from the GST bill have already rallied anticipating its passage. The bill's implementation and details such as the tax rate will take time. It's a good step for the long term," said Andrew Holland, chief executive officer, Ambit Investment Advisors.

Overseas investors continued with their buying spree. On Thursday, the net bought shares worth Rs 560 crore. Domestic institutions, on the other hand, sold a similar amount, data provided by exchanges showed. Foreign institutional investors (FIIs) have been net buyers for a 20th straight trading sessions pumping in over Rs 13,500 crore ($2 billion) during this period.

The GST bill is being touted as one of the biggest reform for the Indian economy. Finance Minister Arun Jaitley said the reform can add 2 percentage point to the economic growth. The GST bill now has to be passed by the Lok Sabha, where the Narendra Modi government has a clear majority. Also, it needs to be ratified by at least half of all state governments, a process that could take years.

Tata Steel and Tata Motors were among the best-performing stocks in the Sensex, each gaining over four per cent. Bharti Airtel and Adani Ports, which added two per cent each, were among other major gainers. Meanwhile, Asian Paints, Lupin and Infosys, each fell over one per cent, most among Sensex components. Shares of logistics companies, including Gati and Snowman Logistics, fell sharply. Shares of the companies have risen sharply in recent months.

"It will be some time before we know the rates for various industries and companies, so it's early to take a sector call," Sampath Reddy, chief investment officer at Bajaj Allianz.


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