Markets trade lackluster despite positive macro-economic data

Local equity markets were trading lackluster in absence of any significant buying activity which lift benchmark equity indices higher amidst mixed global set-up. However, release of positive macro-economic data certainly aided the markets from sliding further. On the macro-front, Wholesale Price Index- based inflation, extending its disinflationary trend, ebbed to -2.33% in March as against -2.06% in February on the back of falling fuel prices. Off day’s low, both Sensex and Nifty were holding above crucial 29,000 and 8,800 levels respectively. Meanwhile, the session turned productive for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.40-060%.

On the global front, Shares were mixed in Asia on Wednesday as investors absorbed the news that China's economy grew at its slowest pace in nearly six years in the first quarter. Hong Kong and Shanghai recovered losses after slipping into negative territory following the release of data showing the Chinese economy grew at a 7.0 percent pace in January-March.

Closer home, while maximum buying was witnessed by stocks from Banking, FMCG and Consumer Durable counters, drubbing was witnessed in stocks from Technology, Information Technology and Auto counters which were the top losers of the session.  Banking stocks edged higher on increased chances of rate cut in upcoming monetary policy review on June 2 after WPI inflation continued to show disinflationary trend. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1474:1116; while 103 shares remained unchanged.

The BSE Sensex is currently trading at 29009.11, down by 35.33 points or 0.12% after trading in a range of 28918.74 and 29094.61. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.42%, while Small cap index up by 0.58%.

The gaining sectoral indices on the BSE were Bankex up by 1.21%, FMCG up by 0.69%, Consumer Durables up by 0.63%, Oil & Gas up by 0.37% and PSU up by 0.27% while, TECK down by 1.10%, IT down by 1.05%, Auto down by 0.81%, INFRA down by 0.40% and Realty down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 3.34%, SBI up by 2.14%, Tata Power up by 1.94%, ITC up by 1.49% and ICICI Bank up by 1.33%. On the flip side, Mahindra & Mahindra down by 2.63%, Bharti Airtel down by 2.63%, Tata Motors down by 2.14%, Coal India down by 1.58% and Infosys down by 1.56% were the top losers.

Meanwhile, foreign institutional investors (FIIs) have lost a case against levy of tax on capital gains they made. They had gone to a tribunal, which is called Authority for Advance Rulings against levy of 20 percent Minimum Alternate Tax (MAT) on capital gains but got a judgment against themselves as the tribunal decided against them.

Finance Minister Arun Jaitley said the government will press ahead with Rs 40,000 crore tax demand on FIIs as they lost a case against levy of tax on capital gains they made. Jaitley said if the government did not tax FIIs, India would look like a haven. He further added that the amount involved is Rs 40,000 crore and I can change the face of India’s irrigation with that Rs 40,000 crore. He also mentioned that government has abolished the MAT from April 1, 2015, but the demands pertain to tax related to earlier period and FIIs wanted it to be waived.

India introduced MAT in 1997 as a means of combating tax avoidance among domestic businesses. In its budget in February, the Indian government clarified that no FII would be liable for MAT after April 1, 2015. However, in the biggest-ever tax demand slapped on FIIs, nearly 100 foreign funds were asked to cough up an estimated $5-6 billion for ‘untaxed gains’ made by them in the domestic markets over the past years.

Till March 31, close to 100 FIIs got notices from the Tax Department for MAT of 20 per cent and were followed up with Assessment Orders. Foreign investors have said that the move goes against the government's stated position of providing a ‘non-adversarial and stable tax regime’.

The CNX Nifty is currently trading at 8819.35, down by 14.65 points or 0.17% after trading in a range of 8795.05 and 8844.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 3.24%, Yes Bank up by 2.53%, Tata Power up by 1.93%, ACC up by 1.88% and Cairn India up by 1.80%. On the flip side, Bharti Airtel down by 2.88%, Mahindra & Mahindra down by 2.62%, Tata Motors down by 2.21%, Idea Cellular down by 2.10% and BHEL down by 2.04% were the top losers.

Asian markets were trading mixed; with FTSE Bursa Malaysia KLCI trading higher by 2.75 points or 0.15% to 1,842.36; KOSPI Index trading higher by 8.24 points or 0.39% to 2,119.96; Straits Times trading higher by 18.97 points or 0.54% to 3,540.05 and Hang Seng trading higher by 118.7 points or 0.43% to 27,680.19. On the flip side, Taiwan Weighted declined by 102.16 points or 1.06% to 9,540.06; Nikkei 225 slid by 38.92 points or 0.2% to 19,869.76; Shanghai Composite lost 22.09 points or 0.53% to 4,113.48 and Jakarta Composite surrendered 16.37 points or 0.3% to 5,402.73.