Mumbai: The bourses extended their rally for the third day soaring nearly 1 per cent on Monday after FMCG major ITC and select auto sector stocks registered impressive gains on hopes that the GST would bring down prices and boost sales in the coming months.
The Sensex soared 300 points or 0.97 per cent to end the day at 31,221.62 while the Nifty scaled above its psychological 9,600 level mark to end the trading session at 9,615, up 94.10 points or 0.99 per cent.
The shares of cigarette manufacturer ITC stole the limelight on Monday surging nearly 10 per cent to hit a record high in the intra-day before ending the session at Rs 342.30, gaining 5.70 per cent or Rs 18.45.
“GST structure for cigarettes offers a great opportunity for the legal industry to wage a long-overdue battle on the illegal trade, which costs an estimated loss of $1.4 billion per annum to the exchequer through evaded taxes. This, in our view, is one reason perhaps why the government has been more rational while setting the cigarette GST structure. Our workings indicate that cigarette taxes under GST could offer the industry an opportunity to price 64 mm cigarettes at more attractive price-points than what are presently on offer. The net realisation per stick can be kept intact even with a retail-price reduction of about 10 per cent and bridge some gap in relation to what the illegal segment has on offer,” said Richard Liu and Vicky Punjabi of JM Financial.
The broader markets too remained strong with 1,799 stocks advancing on the BSE as compared to just 876 stocks that declined. The BSE smallcap and midcap indices too registered strong gains closing the day higher by 1.05 per cent and 1.13 per cent respectively....