Benchmark equity indices sustain early gains; Sensex oscillates around 17200 resistance level

Benchmark equity indices oscillating in a tight range are currently holding on to their dazzling gains. After adding up for four consecutive sessions, frontline indices pierced through the crucial psychological level briefly. Although widely followed 50 share index retreated from the 5200 level. The 30 share index is currently trading past 17200 mark. Stocks from metal, consumer durable and Technology counters have bolstered the rally majorly. However, stocks from Bankex, Fast Moving Consumer Goods and Capital Goods space are the weak spells in trade. Meanwhile, broader indices too are trading competitively with frontline indices, have registered gains of over 0.75% each. On the global front, mood is turning out to be somber which could impact Indian equity markets going further in the day as after disappointing close of Wall Street on Thursday, Asian equity markets have taken a pause as investors seek to gauge how sustainable the burst of optimism will be while waiting for the outcome of crucial Greek debt talks. Equities, commodities and bonds all rose Thursday as the Fed said it would keep interest rates near zero through at least 2014, and left the door open for a third round of quantitative easing to spur growth. Overnight, Dow Jones industrial average was down 22.33 points, or 0.18%, at 12,734.63. The Standard & Poor's 500 Index was down 7.60 points, or 0.57%, at 1,318.45.The Nasdaq Composite Index was down 13.03 points, or 0.46%, at 2,805.28. Moreover, the US future indices too were showing a downtick in the screen trade.

The BSE Sensex is currently trading at 17,201.79, up by 124.61 points or 0.73%. The index has touched a high and a low of 17,258.97 and 17,146.73 respectively.  There were 21 stocks advancing against 9 declines on the index.

The broader indices were trading neck to neck with benchmarks; the BSE Mid cap and Small cap indices were up by 0.95% and 1.44% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 2.32%, CD up by 2.16%, TECk up by 1.86%, IT up by 1.63% and Oil and Gas was up by 1.45%. While, Bankex down by 0.30% and FMCG down by 0.04% remained the only loser on the index.

The top gainers on the Sensex were Sterlite Industries up by 3.82%, Bharti Airtel up by 3.13%, Hindalco Industries up by 2.85%, Sun Pharma up by 2.30% and Tata Steel up by 2.15%.On the flip side, HDFC down by 1.47%, ICICI Bank down by 0.87%, Bajaj Auto down by 0.75%, BHEL down by 0.67% and Maruti Suzuki was down by 0.66% were the top losers on the Sensex.

Meanwhile, the commerce ministry has called for a meeting with India Inc. on 27 Jan, to try and rationalize procedures for setting up special economic zones in India. The attempt is to draw investors to these enclaves who had caught investor fancy when they were announced five years ago but subsequent policy changes and other hurdles made them a non-starter.

When launched, the SEZ s were to be free of tax impositions but the Finance Minister had slapped a 18.5% MAT (minimum alternate tax), on SEZ units and a 15% dividend distribution tax in last year's budget, leading to a sharp drop in new proposals and an increase in the number of withdrawals.

The issues likely to be addressed are land acquisition, bringing out simplified norms to increase their operational efficiency; easing contiguity norms to remove the difficulties in procuring land; permitting a broader category of types of units that can come up in a sector-specific SEZ; providing incentives to attract investments towards manufacturing-oriented SEZs and to ensure that more SEZs are set up in backward areas.

Land acquisition has been one issue that corporate India is struggling with. It is likely that rules related to purchase and size of land could be relaxed. Right now the minimum land requirement for multi-product SEZs is 1,000 hectares for multi-services and 100 hectares for sector-specific ones. It is proposed that these be reduced to 250 hectares and 40 hectares respectively. A lower size threshold will allow SEZs to begin operations with smaller land parcels and expand as and when more land is available. The definition of vacant land, the type of land on which SEZs have to be built, is also likely to be relaxed. Flexibility in contiguity norms in areas where production activity is not taking place is also in the offing.

The Ministry is also seeking suggestions to make sure that SEZs get more or less similar incentives as being given to exporters in the Domestic Tariff Area (area outside the SEZs) so that the units do not suffer any disadvantage. Unlike their counterparts in the DTA, SEZ units do not get the benefits of duty drawback, focused product and focused market schemes.

The S&P CNX Nifty is currently trading at 5,194.30, higher by 36.00 points or 0.70%. The index has touched a high and a low of 5,217.00 and 5,173.15 respectively.  There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 6.23%, Sterlite Industries up by 4.26%, Sail India up by 3.91%, Bharti Airtel up by 3.37% and Sun Pharmaceuticals up by 2.87%.

On the flip side, Ranbaxy down by 4.85%, Dr Reddy down by 1.64%, HDFC down by 1.49%, IDFC down by 1.20% and BPCL down by 1.11% were the major losers on the index.

Asian markets were trading mixed; Jakarta Composite gained 0.14%, and Seoul Composite rose 0.13%.

On the flip side, Straits Times lost 0.04%, Nikkei 225 slipped by 0.29% and Hang Seng dropped 0.04%.

Stock markets in China and Taiwan remained closed on Friday in observance of Lunar New Year holiday.