Benchmarks trade in fine fettle; Nifty surpasses 7,900 mark

Extending their northward journey for sixth straight day, Indian equity benchmarks made a gap-up opening and are trading in fine fettle in early deals with frontline gauges surpassing their crucial 7,900 (Nifty) and 26,400 (Sensex) levels on firm global cues. The US markets surged in last session on easing geopolitical tensions, with the gains the tech-heavy Nasdaq ended the session at its best closing level in over fourteen years. The Asian markets too were trading mostly in the green at this point of time as concern eased over global conflicts from Ukraine to Gaza and Iraq.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too were equally participating in the rally. Sentiments remained up-beat with the report that India has touched the top spot in consumer confidence among the 60 countries measured in Nielsen`s Global Survey of Consumer Confidence and Spending Intentions in the second quarter (April-June) of 2014.

On the sectoral front, metal, capital goods and infrastructure witnessed the maximum gains in trade, while software remained the lone loser on the BSE sectoral space. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 1234 shares on the gaining side against 547 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex opened at 26482.56; around 92 point higher compared to its previous closing of 26390.96, and has touched a high and a low of 26530.67 and 26463.49 respectively. The BSE Sensex is currently trading at 26473.67, up by 82.71 points or 0.31%. There were 23 stocks advancing against 7 stocks declining on the index.

The overall market breadth remained in the favour of advances with 66.42% stocks advancing against 29.44% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.69%, while Small cap index up by 0.79%.

The gaining sectoral indices on the BSE were Metal up by 1.30%, Capital Goods up by 0.99%, Infrastructure up by 0.97%, Auto up by 0.86% and Bankex up by 0.58% while, IT down by 0.20% was the lone loser on the BSE sectoral front.

The top gainers on the Sensex were Sesa Sterlite up by 3.73%, Dr. Reddys Lab up by 2.33%, Bharti Airtel up by 1.86%, Tata Motors up by 1.85% and Hindalco was up by 1.32%. On the flip side, TCS down by 1.16%, HDFC down by 0.84%, ONGC down by 0.52%, ITC down by 0.41% and Sun Pharma Industries was down by 0.28% 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 opened at 7,901.00; about 27 point higher as compared to its previous closing of 7,874.25, and has touched a high and a low of 7918.55 and 7896.10 respectively. The CNX Nifty is currently trading at 7900.80, up by 26.55 points or 0.34%. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 3.41% and United Spirits up by 2.69% and Dr. Reddys Lab up by 2.41% and Tata Motors up by 1.93% and Bharti Airtel was up by 1.86%. On the flip side, TCS down by 1.23%, HDFC down by 0.87%, Power Grid Corporation down by 0.70%, ONGC down by 0.46% and ITC was down by 0.46% were the top losers.

Asian markets were trading mostly in the green; Nikkei 225 spurted by 137.98 points or 0.90% to 15,460.58, Hang Seng soared 153.58 points or 0.62% to 24,954.94, KOSPI Index gained 16.20 points or 0.79% to 2,069.33, Straits Times increased by 5.86 points or 0.18% to 3,318.64, Jakarta Composite climbed by 7.79 points or 0.15% to 5,156.75 and  Taiwan Weighted was up by 108.07 points or 1.18% to 9,249.38.

On the flip side, Shanghai Composite dropped 4.85 points or 0.22% to 2,235.25 and FTSE Bursa Malaysia KLCI was down by 2.30 points or 0.12% to 1,862.01.