The domestic market is likely to open flat to negative on Monday, reflecting the mixed global cues. Analysts predict that the market will remain volatile due to the ongoing F&O settlement week. The focus now shifts to the activity in Parliament, which is slated to open today, primarily for the oath-taking of new members.
Gift Nifty at 23,390 (7.20 am) against Nifty June futures value of 3487.30 and July futures value of 23612.20 indicates a gap down opening.
However, analysts said the GST meeting outcome remained positive, as the Centre’s intent was clear.
Krishan Arora, Partner and Leader of Indirect Taxes at Grant Thornton Bharat, said, “The 53rd GST Council meeting, held on June 22, 2023, marked a significant milestone as the first meeting in the new term of the Modi 3.0 government and the one before the budget is tabled. The industry had high expectations, and the FM has met the same with a series of positive proposals to simplify tax compliance and reduce litigation.
Key recommendations included a waiver of interest and penalties on demand notices issued under Section 73 for the financial years 2017-18, 2018-19, and 2019-20, applicable if the tax is fully paid by March 2025. The Council also proposed extending the time limit to avail input tax credit for invoices or debit notes for FYs until 2020-21 for any GSTR-3B return filed until November 30, 2021, with a retrospective amendment effective from July 1, 2017.
“These recommendations reflect the government’s continued commitment to reducing the compliance burden, promoting the ease of doing business through facilitative measures, and fostering a more business-friendly environment in line with its principle of ‘minimum government, maximum governance.’ These decisions, in addition to other recommendations, collectively, constitute a welcome stride towards clarity and relief for the taxpayer community. However, the absence of resolutions on rate rationalization and clarity on reliefs sought by the online gaming and fertilizer industries leaves avenues for future deliberation and sets up hopes for the forthcoming budget to address these crucial areas, “he added.
Meanwhile, foreign portfolio investors turned positive in June despite they were net sellers on Friday.
Sunil Damania, Chief Investment Officer, MojoPMS, said: “Foreign Portfolio Investors (FPIs) have altered their position in the equity market following the election results, injecting Rs 23,786 crore since June 10. There are three primary reasons for this positive inflow. First, the continuity of the government assures ongoing reforms. Second, the Chinese economy is decelerating, as evidenced by a 12 percent decline in copper prices over the past month. Third, certain block deals in the market have been eagerly taken up by FPIs. However, these FPI inflows are concentrated in a select few stocks rather than being widespread across the market or sectors. We believe that FPI inflows will remain constrained due to the high valuations currently commanded by the Indian equity market. Additionally, FPIs are no longer the primary market influencers, as robust domestic inflows mitigate the impact of FPI outflows. Consequently, FPI outflows are no longer significant market events. “
Asian stocks largely remained negative in the early deal on Monday.