Benchmarks trade in fine fettle in early deals; Nifty regains 8,700 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Wednesday with frontline gauges recapturing their crucial 28,600 (Sensex) and 8,700 (Nifty) levels. Some support also came in with a survey sponsored by RBI projecting the economic growth rate at 7.9 percent for the current fiscal, up from 7.5 percent in 2014-15. The forecasters expect real GVA to increase by 7.5 percent in 2014-15. Also, NITI Aayog vice-chairman Arvind Panagariya has said that nothing has-changed-on the-ground though the economy is showing signs of turnaround. Panagariya also said that it will take some time before major results show up as there is a new government which came with a lot of promises.

On the global front, the US markets made a flat closing with a negative bias in last session, although markets remained in green for most part of the day as traders expressed continued optimism about the outlook for interest rates, but there was some cautiousness ahead of the release of minutes of the latest Federal Reserve meeting on Wednesday. The Asian markets were trading mixed at this point of time, though some of the indices have moved toward a nine-month high, led by Hong Kong shares, and the dollar weakened before the Bank of Japan decides policy.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. On the sectoral front,consumer durables, technology and software witnessed the maximum gain in trade, while there were no losers on the BSE sectoral space. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 1428 shares on the gaining side against 470 shares on the losing side while 57 shares remain unchanged.

The BSE Sensex is currently trading at 28662.97, up by 146.38 points or 0.51% after trading in a range of 28601.49 and 28687.39. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index up by 1.45%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.22%, TECK up by 1.11%, IT up by 1.11%, FMCG up by 1.09% and Oil & Gas up by 0.94%, while there were no losers on the index.

The top gainers on the Sensex were Coal India up by 3.14%, Bharti Airtel up by 2.22%, Reliance Industries up by 1.92%, Maruti Suzuki up by 1.76% and TCS up by 1.16%. On the flip side, Sesa Sterlite down by 1.80%, ONGC down by 1.57%, Sun Pharma down by 0.50%, Tata Steel down by 0.42% and NTPC down by 0.38% were the top losers.

Meanwhile, defending the move of sending tax notices to about 100 FIIs totaling $5-6 billion, Finance Minister Arun Jaitley asserted that legitimate tax demand cannot be considered 'tax terrorism' because India is not a tax haven. The minister clarified that the country was not so vulnerable that every legitimate tax demand was considered as tax terrorism and neither was the country a tax haven.

The minister further highlighted that though some decisions of the past have made the taxation regime adversarial, however an emerging economy that counts on investment could-not indulge in something that has been referred as tax terrorism or very aggressive tax laws.

In the biggest-ever tax demand, nearly 100 foreign funds have been asked to cough up an estimated $5-6 billion for 'untaxed gains' made by them in the Indian markets over the past years. This has triggered huge protest from foreign investors since ‘Budget 2015-16’ announced foreign institutional investors (FIIs) would be exempt from minimum alternate tax (MAT) from 2015-16. However, several MAT notices have been issued to FIIs for assessment year 2011-12 and earlier. Overall, pending MAT demands from the tax department are said to stand at about Rs 37,000 crore.

Further, on black money issue, the minister highlighted there would be a grace period for companies and individuals to come clean on their overseas assets and that every suggestion regarding the compliance window (for black money) was welcomed.

The CNX Nifty is currently trading at 8707.05, up by 46.75 points or 0.54% after trading in a range of 8692.95 and 8716.30. There were 34 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.70%, Coal India up by 3.23%, Tech Mahindra up by 2.63%, Ultratech Cement up by 2.49% and Bharti Airtel up by 2.27%. On the flip side, Sesa Sterlite down by 2.07%, ONGC down by 1.93%, Cairn India down by 1.45%, Lupin down by 1.15% and NMDC down by 0.85% were the top losers.

Asian markets were trading mixed; Shanghai Composite increased 4.61 points or 0.12% to 3,965.99, KOSPI Index gained 10.83 points or 0.53% to 2,057.86, Nikkei 225 added 176.75 points or 0.9% to 19,817.29 and Hang Seng was up by 602.06 points or 2.38% to 25,877.70. On the flip side, Taiwan Weighted decreased 64.77 points or 0.67% to 9,577.13, Jakarta Composite shed 23.1 points or 0.42% to 5,500.19, Straits Times dipped 7.33 points or 0.21% to 3,458.29 and FTSE Bursa Malaysia KLCI was down by 6.67 points or 0.36% to 1,849.84.