Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions ahead of wholesale price index data for the month of February 2015, scheduled to be released later in the day. Besides, investors also remained cautious ahead of the two-day US Federal Reserve meet which begins on Tuesday. However, losses remained capped as foreign investors getting some encouragement with Finance Minister Arun Jaitley’s statement that the government was rationalising the country's tax system to make it fair, amid concerns of fresh claims of tax on past transactions by Indian authorities. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 66.98 crore on March 13, 2015. Meanwhile, participants will also keenly await the fourth and final installment of advance tax payment figures that would throw light on fourth quarter earnings.

On global front, Asian stock markets were trading mostly in the green terrain at this point of time, though investors turn cautious ahead of a Federal Reserve meeting this week that may set the stage for the first U.S. interest rate hike since the global financial crisis. Furthermore, US stocks dipped on Friday as investors reacted to slumping oil prices and a jump in the dollar. Back home, Indian rupee rose by six paise at 62.91 against the US dollar in early trade on fresh selling of the American currency by exporters.

Back on street, stocks from information technology (IT), Banking and Consumer Durables counters were supporting the markets’ uptrend, while those from Metal, Power and Infrastructure counters were adding to the underlying cautious undertone. In scrip specific development, shares of Diamond Power Infrastructure have rallied after the company has received orders worth of Rs 332 crore from Assam and Nagaland governments. On the flip side, shares of Persistent Systems have dropped after the information technology (IT) company said that the revenue growth in dollar terms is expected to be muted in January-March 2015 quarter (Q4 FY15), due to a change in the business priorities of one of large customers in the product engineering segment.

The market breadth on BSE was negative, out of 2304 stocks traded, 873 stocks advanced, while 1339 stocks declined on the BSE.

The BSE Sensex is currently trading at 28478.52, down by 24.78 points or 0.09% after trading in a range of 28420.27 and 28581.82. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.19%, while Small cap index down by 0.41%.

The gaining sectoral indices on the BSE were IT up by 0.70%, Bankex up by 0.37%, Consumer Durables up by 0.31%, TECK up by 0.28% and Capital Goods up by 0.03% while, Metal down by 1.21%, Power down by 0.78%, Infrastructure down by 0.61%, Oil & Gas down by 0.47% and PSU down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.28%, Wipro up by 1.18%, Hindustan Unilever up by 1.07%, Sun Pharma up by 1.07% and HDFC Bank up by 1.07%. On the flip side, Sesa Sterlite down by 3.25%, Cipla down by 2.57%, NTPC down by 2.54%, HDFC down by 2.07% and Bharti Airtel down by 1.94% were the top losers.

Meanwhile, in a bid to soothe the of foreign investors nerve, disturbed by fresh claims of tax on past transactions by Indian authorities, Finance Minister Arun Jaitley has said that his government was rationalising the country’s tax system to make it fair. Jaitley said that 'When the new government had come in, I had stated the policy of the new government that it would not move in the direction of any retrospective legislation on tax issues.' He asserted that India is sending the right messages on its non-adversarial tax policy and there are some 'legacies of the past' that are posing challenges.

The issue was raised with tax authorities slapping a $3.2-billion capital gains tax on Cairn India, a part of the Vedanta Group now, for a transaction some 10 years ago. The Indian arm of Cairn was sold by the British parent and the acquirer company, and now the company was asked to pay capital gains for not withholding such a levy. Such a tax was not explicitly in existence at that time, was introduced in 2012 with retrospective effect.

Finance minister further stated that we need a lot of investment in India and for that we need to ease the process of doing business. Therefore, slowly we are introducing changes in that direction and equitable tax system was a top priority of the government. He further said that even as India and its policies were being closely watched by the global investing community, what really mattered was whether it was moving in the right direction as promised or moving backward.

In January, the government had said that it would not appeal against a Bombay High Court ruling that Vodafone was not liable to pay tax demand of Rs 3,200 crore in a transfer pricing case.

The CNX Nifty is currently trading at 8641.55, down by 6.20 points or 0.07% after trading in a range of 8619.60 and 8663.55. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.51%, Zee Entertainment up by 1.67%, DLF up by 1.52%, BPCL up by 1.46% and Sun Pharma up by 1.33%. On the flip side, Cairn India down by 4.10%, Sesa Sterlite down by 3.96%, NMDC down by 3.12%, Jindal Steel & Power down by 3.11% and Cipla down by 2.70% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI rose 0.14%, KOSPI Index gained 0.24%, Nikkei 225 advanced 0.03%, Straits Times surged 0.53%, Jakarta Composite jumped 0.28%, Shanghai Composite added 1.82% and Hang Seng was up by 0.49%. On the flip side, Taiwan Weighted was down by 0.34%.