Benchmarks reverse early gains; slip into negative territory

Reversing all the early gains, local equity markets have slipped into negative territory in late morning deals on bouts of profit-booking by select market-participants who preferred cashing in their profits at market’s record high levels amidst somber global cues. Despite the losses, both Sensex and Nifty were holding above the crucial 24,350 and 7250 levels respectively. Meanwhile, broader indices although paring some early gains continued outperforming larger peers, with both Mid-cap and Small-cap index were edging higher over a percent.

On the global front, Asian shares although were trading mostly lower as investors continued to monitor developments in Thailand, following news the army had declared martial law after six months of anti-government protests. Closer home, stocks from Realty, Consumer durable and Information Technology were restricting further downtrend of bourses, however those from Oil & Gas, Public Sector Undertaking and Banking counters were chiefly responsible for them. IT stocks which were beaten blue in previous two to three trading sessions were up on bargain buying. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1174: 640; while 19 shares remained unchanged.

The BSE Sensex is currently trading at 24358.35, down by 4.70 points or 0.02% after trading in a range of 24587.16 and 24299.53. There were 16 stocks advancing against 14 declines on the index.

The broader indices though paring gains were outperforming larger counterparts; the BSE Mid cap index was up by 1.16% and Small cap index gained 1.40%.

The top gaining sectoral indices on the BSE were, Realty up by 3.13%, Consumer Durables up by 2.84%, IT up by 1.73%, TECK up by 1.52%, and Healthcare up by 0.96%, while Oil & Gas down by 2.63%, PSU down by 1.87%, Bankex down by 0.44% and Capital Goods down by 0.27% were the top losers.

The top gainers on the Sensex were Tata Steel up by 3.05%, Wipro up by 2.29%, Infosys up by 2.28%, Dr Reddy’s Lab up by 2.23% and SSLT up by 2.13%. On the flip side, Coal India down by 5.11%, ONGC down by 3.54%, RIL down by 2.74%, Hero MotoCorp down by 2.23% and Gail India down by 2.17% were the losers on the Sensex.

Meanwhile, the Confederation of Indian Industry's (CII) survey report highlighted land procurement, environment clearances, construction permits, industrial safety permits and power connection as the top five obstacles in starting a business. India continues to rank low in the World Bank’s ranking on the ease of ‘Doing Business’ for 2014. India’s position slipped to 134 against 131 in 2013 and placed lower than Brazil, Russia, China and South Africa.

The CII’s survey, which carried out in association with KPMG, noted that it has become imperative for India to have an environment that facilitates entrepreneurship, promotes investments productivity and growth for improving business climate in India. Stringent labour laws, problems in securing land and tax woes are among the critical issues that need to be addressed in order to attract global investors.

The report highlighted that most companies believe that the Indian direct tax regime is not conducive to fostering growth. 90 per cent of the respondents are in favor of reduction in tax rates, while 92 per cent feel there are challenges in transfer pricing assessments. Therefore a reduction in corporate taxes could provide impetus to growth of business. The CII further noted that taxation in India needs structural, operational and administrative reforms and the burden of tax compliance should be reduced besides enabling e-filing of all taxes, the report added. On land acquisition issue, the report added that companies keen on setting up a business in India need to undergo a time-consuming and tedious process, with the average time taken to acquire land being 14 months. The report indentified key areas for reforms which will enable doing business in India easier, including setting up of land acquisition, business, taxation and contract enforcement.

The CNX Nifty is currently trading at 7,263.45, down by 0.10 points after trading in a range of 7,353.65 and 7,247.70. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Tata Steel up by 3012%, Lupin up by 2.59%, Infosys up by 2.52%, Wipro up by 2.11% and TCS up by 2.11%. On the flip side, Coal India down by 4.87%, ONGC down by 3.78%, NTPC down by 2.99%, Reliance down by 2.95% and PNB down by 2.51% were the top losers on the index.

Asian markets were trading mostly in red Jakarta Composite plunged 2.21%, Taiwan Weighted down by 0.05%, KLSE Composite dropped 0.14%, Straits Times was trading flat and Seoul Composite as down by 0.44%. On the flip side, Shanghai Composite advanced 0.17%, Hang Seng increased by 0.68%, Nikkei 225 spurted by 0.78% were the gainers.