In a report that may please the government, Hong Kong headquartered Credit Lyonnais Securities Asia or CLSA has cited its research that suggests benefits of Goods and Service Tax are “moderately visible” at the end of its first quarter of implementation but does not see immediate improvement in capital expenditure, especially by corporate groups, in near-term.

The worldwide rating agency’s assessment came on the basis of just ended earnings season for July-September quarter or Q2 of FY 2017-18. It says ,” investors feedback on India is incrementally positive. They believe the worst for corporate earnings is over. September earnings were expected to be bad because of GST impact but were actually better than analysts’ expectations. Asset quality concerns receded in the quarter gone by and even commentary from banks was positive. Operationally, most sectors showed improvement.” Shares that are mentioned in CLSA’s performance story are ICICI Bank, State Bank of India, Mahindra and Mahindra, Bharti Airtel, Reliance Industries, ITC, Lupin and Jubilant Foodworks.

Analysts say CLSA’s report appears to be in line with the rise in the filing of GST returns by businesses. As per the filings for October, about 43.67 lakh businesses have submitted their records online, the highest since July. For previous three months of August and September, the numbers of businesses filing returns were 33.39 lakh, 28.46 lakh and 39.33 lakh. Analysts expect a significant rise in the revenue that would provide leverage to the GST Council to further rationalise the tax rates.

“Going forward negative impact of GST will gradually fade over the current year. In fact, the move to reduce tax rates for nearly 200 products could boost activity in next 3-6 months. Bank recapitalisation of `2.11 lakh crore will unlock credits and private investment growth.” says Goldman Sachs. However, it sees headline inflation rate to rise to 5.3 per cent in FY19 that may force Reserve Bank of India to hike its policy rate by as much as 75 basis points or 0.75 per cent.

Next week major share buyback plans worth `24,000 crore in information technology sector are poised to unroll. Wipro has set aside `11,000 crore in cash to pay its investors starting 29 November when it will purchase stocks at `320 apiece. Next day, Infosys Technologies will start its buyback programme worth rs 13,000 crore as it has planned to repurchase equity shares @ `1,150 from investors.

Infy will buy 11.3 crore stocks of the company. CLSA has predicted challenging time ahead for IT sector. But it has picked up Infy and HCL Technologies as its favourites. The IT stocks’ performance on Bombay Stock Exchange and National Stock Exchange in 2017 calendar year has so far remained modest ranging between 5 per cent and seven per cent, it says.

Meanwhile, Sensex closed at 33,561.55 (+83.20) points, gaining 0.25 per cent. Nifty at 10,342.30 (+15.40) points was up 0.15 per cent. Nifty Bank finished the day flat at 25,766.65 (+9.15) points.