Post Session: Quick Review

Indian markets witnessed another choppy session on Friday, though they managed to come out of the global pressure and selling at high points of the day. The gains were not much pronounced in the backdrop of some geo-political tension after a Malaysia Airlines passenger plane crashed in eastern Ukraine, which was suspected to be shot by the Ukrainian rebels. The early selling in the markets took the Nifty to test 7600 levels, while the Sensex too came close of breaching the 25400 levels, however recovery started in noon trade that pulled the markets out of the red making the indices extend their gaining streak for the fourth straight session.

The global cues remained sluggish and after a sell-off in the US markets overnight, the Asian markets too mostly ended in red, while the European markets too made a soft start amid concern that conflict between Ukraine and Russia is deepening.

Back home, the start was on a flat-to-negative note tailing weakness in the global markets and after showing some resilience, the markets lost ground with traders taking opportunity to book profit after recent rallies, both the indices came near breaching their crucial psychological levels, however form one end the IT and technology counters single handedly kept the markets in range, preventing them to fall deep in red. The better than expected earnings numbers of IT bellwether TCS led whole IT pack and the markets going, the company despite registering a 4.5% sequential decline in April-June net profit at Rs 5,058 crore, stood better than street estimates.However, there was not much other than TCS numbers that could have supported the markets on the upside and both the major indices kept moving in and out of the red in the first half of the trade. It was later in the day when the markets started moving higher after the Finance Minister replying to his maiden budget speech, hinted at doing away with retrospective tax and also indicated that he would do away with the provision, once pending cases are dealt with. The development gave a sense of relief around the corporate India and the market participants, and the major indices closed higher by about a quarter percent for the day.

The BSE Sensex gained 80.40 points or 0.31% to settle at 25641.56. The index touched a high and a low of 25713.40  and 25441.24 respectively. 15 stocks gained against 15 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices ended in red, while the BSE Midcap was down by 0.42%, the BSE Small cap index was lower by 0.12%. (Provisional) 

On the BSE sectoral front, IT was up by 1.43%, TECk was up by 0.91%, Bankex gained 0.77% and Capital Goods up by 0.42% were the top gainers, while Power down by 1.34%, Realty down by 0.88%, Consumer Durables down by 0.88%, Oil & Gas was down by 0.77% and Metal down by 0.53% were the major losers in the space. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 2.97%, TCS up by 2.81%, Axis Bank up by 2.26%, ICICI Bank up by 2.09% and Wipro was up by 1.70%. On the flip side, Tata Power down by 2.58%, Hindalco Inds down by 2.23%, BHEL down by 2.10%, Gail India down by 1.87% and Maruti Suzuki down by 1.70% were the major losers. (Provisional)

Meanwhile, as around Rs 4 lakh crore are locked up in litigations, the Central Board of Direct Taxes (CBDT) has set up a six-member committee to suggest ways to reduce mounting disputes at various tax appellate forums. The committee, comprising senior Indian Revenue Service officials, will appraise the efficacy of existing dispute resolution forums of Commissioner of Income Tax (Appeals) and the Income-Tax Appellate Tribunal (ITAT).

The Panel has also been asked by CBDT to give its recommendations for different income groups and separately for corporate and non-corporate assessees. The panel will have to analyse assessment orders separately by categorising income groups up to Rs 25 lakh, Rs 25 lakh - Rs 1 crore, Rs 1 crore - Rs 10 crore and Rs 10 crore and above.

Besides the committee to examine the assessment orders, appellate orders and scrutiny report for appeal to the ITAT. Furthermore, the committee will conduct analysis of assessment orders, orders of CIT (A) and success rate of appeals filed by the department/assessee before the ITAT. The panel will have to submit its report within eight weeks. The latest initiative of the CBDT is also in line with the intent of the government to reduce tax litigation and bring certainty in the tax environment.

India VIX, a gauge for markets short term expectation of volatility rose 0.86% at 15.09 from its previous close of 14.96 on Thursday. (Provisional)

The CNX Nifty ended higher by 20.55 points or 0.27% to settle at 7,661.00. The index touched high and low of 7,685.00 and 7,595.50 respectively. 23 stocks ended in the green against 27 stocks ending in red. (Provisional)

The major gainers of the Nifty were TCS up by 2.65%, IDFC up by 2.57%, HCL Tech up by 2.39%, Hero Motocorp up by 2.39% and Kotak Bank was up by 2.34%. On the flip side, the key losers were Tata Power down by 2.72%, Ambuja Cements down by 2.36%, GAIL down by 2.18%, Hindalco down by 2.12% and BHEL down by 1.95%. (Provisional)

European markets were trading in red; UK’s FTSE 100 down by 0.58%, Germany’s DAX was down by 0.82% and France’s CAC 40 was down by 0.36%.

The Asian markets concluded Friday’s trade mostly in red, after a Malaysia plane was shot down over Ukraine and Israel sent troops into Gaza, spurring demand for haven assets. According to the minutes of June 12-13 policy meeting released showed that some Bank of Japan board members warned that tough global competition and moves to produce locally for consumers are hitting exports. But the minutes also stated that the nine-member board agreed that Japan’s exports were likely to increase moderately. The minutes also highlighted that a few members pointed to the possibility that structural factors such as the declines in Japanese firms’ competitiveness and the shift of their production sites overseas could be influencing exports to a larger degree than expected.

Chinese Premier Li Keqiang stated that economic growth of slightly higher or lower than 7.5% this year would be acceptable as long as there was higher employment and wages. Li’s latest remarks signaled some flexibility in hitting the annual growth target and put more emphasis on reforms. Li added that the government will stick with its targeted approach in macro-economic policies, and will rely more on reforms and market forces to unleash growth drivers. In March, the government set an economic growth target of around 7.5% for 2014, along with an inflation target of around 3.5%. China’s new-home prices fell in a record number of cities tracked by the government as developers cut prices to boost sales volume, signaling curbs will be relaxed in more cities. Prices fell in 55 of the 70 cities last month from May, the most since January 2011 when the government changed the way it compiles the statistics.