Benchmarks add gains; Nifty surpasses 7850 mark

Indian equity benchmarks added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters. The sentiments remained on up-beat mood as Prime Minister Narendra Modi, in his Independence speech, presented government’s business-friendly side and invited global businesses to make India their manufacturing base. The markets also got a boost on reports that Foreign Institutional Investors bought shares worth Rs 625 crore on previous trading session. Traders were seen piling up positions in Capital Goods, PSU and Bankex while selling was witnessed in FMCG and IT sector stocks. In scrip specific development, Tata Motors was trading firm after touching a fresh record high after the global auto giant reported that its sales of luxury brand Jaguar Land Rover rose 12.24% to 39,467 units in July, compared to 35,162 units in the same month last year.

On the global front, the Asian markets were trading on a mixed note, while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,850 and 26,300 levels respectively. The market breadth on BSE was positive in the ratio of 1811:941 while 99 scrips remained unchanged.

The BSE Sensex is currently trading at 26342.38, up by 239.15 points or 0.92% after trading in a range of 26075.28 and 26356.24. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.73%, while Small cap index up by 2.08%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.60%, PSU up by 2.26%, Bankex up by 2.08%, Oil & Gas up by 2.05%, INFRA up by 1.88% while, FMCG down by 0.55%, IT down by 0.47% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 4.42%, Axis Bank up by 4.00%, Tata Motors up by 3.44%, BHEL up by 2.96% and ONGC up by 2.74%. On the flip side, ITC down by 1.70%, Infosys down by 0.91%, Mahindra & Mahindra down by 0.70%, HDFC down by 0.62% and TCS down by 0.58% were the top losers.

Meanwhile, finance ministry has stated that it is presently considering a package of tax and non-tax incentives to revive special economic zones (SEZs) in the country and final decision on this is likely to be taken soon. Over the past few years, investors have lost confidence in SEZs as the government has withdrawn the tax incentives available to SEZ developers and the units there in. Out of the 566 formally approved SEZs, there are only 185 SEZs currently operating in the country.

According to the original provisions of the Special Economic Zones Act, 2005 and Rules, 2006, SEZ developers and units were exempted from Minimum Alternate Tax (MAT). However, the government during budget 2011-12 imposed 18.5 per cent MAT on the book profits on SEZ developers and units. The imposition of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) has dented the investor sentiments. 

It has become imperative to revive the SEZ to provide an impetus to manufacturing sector, which has registered near zero growth in last two financial years.  SEZs contribute about 30 per cent to India’s exports and provide employment to around 15 lakh workers. Exports from these zones increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14.

The CNX Nifty is currently trading at 7862.25, up by 70.55 points or 0.91% after trading in a range of 7779.20 and 7865.85. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were BPCL up by 6.30%, Cipla up by 4.46%, Axis Bank up by 4.08%, Tata Motors up by 3.54% and IDFC up by 3.16%. On the flip side, ITC down by 1.78%, HCL Tech. down by 1.12%, Infosys down by 1.11%, TCS down by 0.71% and Mahindra & Mahindra down by 0.68% were the top losers.

The Asian market were trading on a mixed note; Hang Seng increased 0.52 points to 24,955.46, Nikkei 225 increased 4.26 points or 0.03% to 15,322.60, Jakarta Composite increased 7.12 points or 0.14% to 5,156.08 and Shanghai Composite increased 12.73 points or 0.57% to 2,239.47.

On the other hand, Taiwan Weighted decreased 65.5 points or 0.71% to 9,141.31, KOSPI Index decreased 10.09 points or 0.49% to 2,053.13, Straits Times decreased 7.42 points or 0.22% to 3,307.35 and FTSE Bursa Malaysia KLCI decreased 2.68 points or 0.14% to 1,861.63.

The European markets were trading in green; UK’s FTSE 100 increased 43.52 points or 0.65% to 6,732.60, France’s CAC increased 59.82 points or 1.43% to 4,234.18 and Germany’s DAX increased 152.07 points or 1.67% to 9,244.67.