Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on the back of fresh buying by participants. Besides, recovery in rupee against the dollar and a firming trend in global markets too boosted sentiments. At present, Sensex and Nifty were trading above the crucial 26,900 and 8,150 levels respectively, with gains of over a percentage point. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by 1.51% and 1.73% respectively. Sentiment got a boost with Finance Minister Arun Jaitley announcing a high level committee, which will give its first recommendations on the issue of imposition of MAT on foreign investors. The committee would also look into few other tax issues, which are essentially legacy issues. However, some traders remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1360.69 crore on May 07, 2015. Meanwhile, investors will be eyeing the reform process, which seems to have hit a dead end. The GST Bill to be taken up in the Rajya Sabha today, where the government is in a minority.

On global front, Asian stock markets were broadly higher on Friday after a rally on Wall Street with investors focused on a US jobs report that will supply more clues about the strength of the world's top economy. US employers likely added 228,000 workers to non-farm payrolls last month, after a 126,000 increase in March. Back home, Indian rupee recovered by 15 paise to 64.08 against the US dollar in early trade on fresh selling of the American currency by exporters and banks.

Back on street, barring consumer durables, all other BSE sectoral indices were trading significantly in the green. Among them, realty index was the star-performer and was up 2.58 per cent, followed by auto 2.15 per cent, Capital Goods 1.89 per cent and infrastructure 1.88 per cent, while consumer durables index was down 2.93 per cent. In scrip specific development, shares of Nucleus Software Exports have surged after the company reported a strong 63% quarter-on-quarter growth in operating profit at Rs 24.75 crore for the fourth quarter ended March 2015. On the other hand, shares of Hero MotoCorp (HMCL) have slipped after reporting a 14% year on year (yoy) decline in net profit at Rs 477 crore for the quarter ended March, 2015 (Q4) on account of an impairment charge of Rs 155 crore.

The market breadth on BSE was positive, out of 2122 stocks traded, 1603 stocks advanced, while 450 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26947.18, up by 348.07 points or 1.31% after trading in a range of 26814.38 and 27002.70. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.51%, while Small cap index up by 1.73%.

The gaining sectoral indices on the BSE were Realty up by 2.58%, Auto up by 2.15%, Capital Goods up by 1.89%, Infrastructure up by 1.88%, Bankex up by 1.80%, while Consumer Durables down by 2.93% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 3.70%, Cipla up by 3.60%, Bajaj Auto up by 3.41%, Tata Power up by 3.07% and ICICI Bank up by 3.05%. On the flip side, Hero MotoCorp down by 3.12%, Vedanta down by 0.78%, Sun Pharma down by 0.47% and Wipro down by 0.02% were the top losers.

Meanwhile, the continuous slump in the stock market with fleeing foreign investors on issue of payment of Minimum Alternate Tax (MAT), has led the Finance Minister Arun Jaitley announce a high level committee, which will give its first recommendations on the issue of imposition of MAT on foreign investors. Elaborating on the tax policies, the Finance Minister expressed the government's commitment to provide certainty to the tax regime to attract investments, both domestic and foreign.

A high-level committee, headed by Justice A P Shah, the chairman of the Law Commission, will look into the controversial issue of payment of Minimum Alternate Tax by FIIs. The committee would also look into few other tax issues, which are essentially legacy issues.

Arun Jaitley speaking in parliament said that the government was committed to three principles: certainty of taxation, avoidance of retroactive taxation and enabling both domestic and foreign investment. “We will ensure that these principles are adhered to in letter and spirit”. Further replying to the debate, the FM said that the Committee is requested to give its recommendation of the specific issues of MAT on FIIs expeditiously. The Government will consider the recommendation of the committee and take an appropriate decision as early as possible.

Following a decision of the Authority of Advance Ruling (AAR), Income Tax department had slapped notices on 68 foreign portfolio investors (FPI) saying they have to pay 20 percent MAT totalling Rs 602.83 crore on untaxed capital gains made by them over the past three years. Some foreign funds have appealed against the ruling in the Supreme Court. UK-based Aberdeen Asset Management has challenged the MAT claim in the Bombay High Court.

The CNX Nifty is currently trading at 8161.60, up by 104.30 points or 1.29% after trading in a range of 8123.45 and 8175.50. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.92%, Cipla up by 3.69%, Bajaj Auto up by 3.29%, ICICI Bank up by 3.10% and Tata Power up by 3.07%. On the flip side, Hero MotoCorp down by 3.14%, Vedanta down by 0.73%, Asian Paints down by 0.68%, Grasim Industries down by 0.57% and Sun Pharma down by 0.45% were the top losers.

Asian markets were trading in the green; KOSPI Index rose 0.04%, FTSE Bursa Malaysia KLCI increased 0.36%, Taiwan Weighted advanced 0.06%, Straits Times jumped 0.47%, Jakarta Composite surged 0.82%, Shanghai Composite soared 1.26%, Nikkei 225 added 0.59% and Hang Seng was up by 0.71%.