ITC Leads Indian Stocks Higher as New Tax Regime Takes EffectBy
Consumer goods index at record on lower GST for staples
Sovereign bonds tumble after RBI announcement to sell debt
India’s stock benchmark posted its biggest advance in more than a month as consumer companies rallied after a nationwide tax overhaul came into effect.
The S&P BSE Sensex climbed 1 percent at the close in Mumbai, as all 13 sub-indexes compiled by BSE Ltd. rose. The benchmark’s gains follow two straight quarters of advances.
The S&P BSE Fast Moving Consumer Goods Index advanced to a record, with ITC Ltd. among the best performers after analysts said its cigarette business will benefit from lower tax on tobacco. Levies on personal care items and staples are lower under the new goods and services tax, or GST, than the previous hodgepodge of different state and territory rules.
“This is a relief rally,” said Sanjiv Bhasin, executive vice president at India Infoline Ltd. “The full impact of GST on the economy will be known only in the next 18-24 months.”
The country’s sovereign bonds plunged after the Reserve Bank of India said it plans to sell up to 100 billion rupees ($1.5 billion) of debt via open-market operations on July 6, as the authority looks to drain excess funds from the banking system.
- Ashok Leyland Ltd. rises after June sales rise 11%
- Dilip Buildcon Ltd. advances after Credit Suisse rates stock outperform
- ITC to See ‘Earnings Tailwind’ on Lower Tobacco Tax: Street Wrap