Closing Bell

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International Market Updates 28 Feb 2019

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Nifty above 10,800, Sensex up 100 pts; IOC, Sun Pharma top gainers

Market Opens: It is a strong start for the indices on Thursday with Nifty trading around 10,850 level.

At 09:18 hrs IST, the Sensex is up 139.66 points at 36045.09, while Nifty is up 40.90 points at 10847.60. About 525 shares have advanced, 138 shares declined, and 33 shares are unchanged. 

Tata Metaliks, Future Retail, Yes Bank, Tata Motors, Coal India, Adani Ports, Quick Heal, Motherson Sumi, Balrampur Chini, Maruti Suzuki are among major gainers on the indices, while losers are ONGC, Wipro, Indiabulls Housing, Jet Airways, Odisha Cement, TCS and HCL Tech.

All the sectoral indices are trading in green led by PSU bank, auto, energy and FMCG.

Rupee Opens: The Indian rupee opened lower at 71.26 per dollar on Thursday versus Wednesday's close 71.22.

Source:https://www.moneycontrol.com/news/business/markets/stock-market-live-updates-bse-nse-nifty-above-10800-sensex-up-100-pts-ioc-sun-pharma-top-gainers-3591771.html

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Closing Bell

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International Market Update (27 Feb)

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MCX Support and Resistance Level (27 Feb 2019)

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GST cut to boost sales of under-construction flats; no ITC may hit builders' profit margin: Moody's

Credit rating agency Moody's on Wednesday said the GST rate cut on under-construction flats will boost housing sales, but may hit profit margins of builders with withdrawal of input tax credit.

The GST Council had on Sunday decided to cut goods and services tax (GST) rate on affordable homes to 1 per cent without input tax credit (ITC) from earlier 8 per cent with ITC.

The GST on under-construction flats, which is not under the affordable housing segment, has been reduced to 5 per cent without ITC from earlier 12 per cent with ITC.

"The reduction in GST is credit positive for India's property developers...because the reduction in tax will boost demand and increase sales of properties under construction," Moody's Investors Service said in a statement.

"India's real estate sector has weathered difficulties in the last few years amid price reductions from a glut of inventory and lackluster demand. The reduction in GST will improve housing affordability as the amount to be paid by a potential house buyer will be reduced, which will increase demand for property," it added.

The reduction in GST rate on affordable housing is in line with the government's increased focus on this segment, Moody's said.

"The new GST measures eliminate the ability to claim input tax credit, which may hit the profitability of the developers," the rating agency said.

Currently, the developers are able to reduce the tax liability when it makes a sale by claiming tax paid on goods and services required for the construction of properties. "This will further impact developers' profit margins that are already under pressure."

Moody's said that the developers have the option to mitigate this loss by increasing prices slightly given that overall pricing for the customer has reduced with lower GST.

Meanwhile, Fitch Ratings said the move to reduce the GST on under-construction properties and expand the scope of the affordable-housing category would improve affordability and support demand.

"We believe this will boost consumer sentiment and cut transaction costs, which can be as high as 18 per cent in Mumbai after including other taxes, such as stamp duty, surcharge and registration fees," it said.

"The measure also withdraws input-tax credits for developers, but we still expect marginal savings on overall transaction costs and more so for affordable housing as well as improved buyer confidence, as the measure eliminates ambiguity as to whether property developers are adequately passing on input-tax credit to buyers," Fitch said.

Source:https://www.moneycontrol.com/news/business/economy/gst-cut-to-boost-sales-of-under-construction-flats-no-itc-may-hit-builders-profit-margin-moodys-3589171.html

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