Benchmarks continue firm trade; Nifty holds 7650 mark

Indian equity benchmarks trimmed minor gains but continue to trade in green in the late afternoon session on account of buying in frontline blue chip counters. Investors took some solace on reports that foreign direct investment (FDI) flows into India more than doubled to $3.60 billion in May, the highest in the last eight months. The country had received FDI worth $1.63 billion in May 2013. Traders were seen piling up positions in IT, TECK and Bankex while selling was witnessed in Power, Realty and PSU sector stocks. BSE IT Index was the top sectoral performer in trade as investors lapped up IT stocks after TCS, India’s largest software exporter, delivered strong set of numbers for quarter ended June 2014. In scrip specific development, MindTree, the software services provider, was trading in green after the company reported strong dollar revenue growth among midcap IT companies beating street expectations. Pantaloons Fashion & Retail was trading in green ahead of a board meeting scheduled for today. The board will meet to consider fund raising proposal for the company, including rights issue.

On the global front, the Asian markets were trading mostly in red, while the European markets too traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,650 and 25,600 levels respectively. The market breadth on BSE was negative in the ratio of 1302:1455 while 122 scrips remained unchanged.

The BSE Sensex is currently trading at 25633.14, up by 71.98 points or 0.28% after trading in a range of 25678.77 and 25441.24. There were 13 stocks advancing against 17 stocks declining on the index. The broader indices were trading in red; while the BSE Mid cap index was marginally down by 0.36%, the Small cap index was down by 0.08%.

The gaining sectoral indices on the BSE were IT up by 1.72%, TECK up by 1.18%, Bankex up by 0.44% and Capital Goods up by 0.19%, while, Power down by 1.31%, Realty down by 1.28%, PSU down by 0.90%, India Infrastructure Index down by 0.62% and Consumer Durables down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.11%, Wipro up by 2.48%, Hero MotoCorp up by 1.62%, ICICI Bank up by 1.37% and Cipla was up by 1.20%. On the flip side, Tata Power down by 2.30%, BHEL down by 2.24%, Hindalco down by 2.04%, Maruti Suzuki down by 1.85% and SBI down by 1.49% were the top losers.

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.

The CNX Nifty is currently trading at 7,659.40, up by 18.95 points or 0.25% after trading in a range of 7,673.85 and 7,595.50. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Kotak Bank up by 3.27%, TCS up by 3.14%, Wipro up by 2.62%, HCL Tech up by 2.56%, and IDFC was up by 2.10%. On the flip side, Tata Power down by 2.26%, BHEL down by 2.14%, Ambuja Cements down by 2.09%, Hindalco down by 1.99% and Maruti down by 1.77% were the top losers.

Asian markets were trading mostly in red; FTSE Bursa Malaysia KLCI was down by 0.51%; KOSPI Index was down by 0.07%; Taiwan Weighted was lower by 0.08%; Hang Seng was lower by 0.28%; Nikkei 225 plunged 1.01% and Straits Times was lower by 0.05%.

On the other hand, Shanghai Composite was up by 0.17% and Jakarta Composite gained 0.25%.

The European markets were trading in red; Germany’s DAX was down by 0.51%, France’s CAC 40 lost 0.03% while, UK’s FTSE 100 dropped 0.40%.