FMCG heavyweight ITC, which hit a fresh high for the year, as it rose to Rs 295.50 in early trades today, is currently up 2.7% at Rs 285.40. The counter is seeing strong buying today on reports the GST council has finalised lower tax rates for FMCG products such as soaps, hair oil, edible oil and toothpaste.
The stock rose on impressive volumes today. On BSE, the ITC counter has clocked a volume of nearly 1.96 million shares so far in the session, more than 3 times the average daily volume the counter had witnessed in the past two weeks.
On Thursday, the Centre and states reportedly decided on rates for specific products which may lead to lower prices for a majority of products of mass consumption. The move is to ensure that there is no inflationary impact due to implementation of GST. Rates on over 1200 items were finalised by the GST council with 81% facing a levy of up to 18%.
Today, in the second half of the Council meet, the GST council will discuss rates of services and products like beedi, cigarettes, tobacco, footwear, gold, textile, handloom, handicraft, agricultural equipment and biscuits.
The GST tax reform will subsume central and state levies such as excise duty, additional duties of customs, service tax, value added tax, central sales tax, entry tax, octroi and luxury tax and is expected to clean up the messy indirect tax structure.
Among other stocks in the FMCG space, Colgate Palmolive is up 3.75% and Tata Coffee is gaining 3%. Jayshree Tea, Hindustan Unilever, Godrej Consumer Products, KRBL, Marico and Emami are up 1.5% - 2%.
Meanwhile, the BSE benchmark Sensex, which had advanced to a new high of 30,712.35 earlier in the session, is currently down 78.16 points or 0.26% at 30,356.63, slightly off the day's low of 30,338.52. The Nifty50 of the National Stock Exchange is down 30.75 points or 0.33% at 9398.70, well off the day's high of 9505.75.