Benchmarks trade jubilantly in early deals

Indian equity benchmarks have made a gap-up start and are trading jubilantly in early deals on Wednesday as investors remained hopeful that Reserve Bank of India (RBI) will slash key interest rates as retail inflation softened further to a four-month low of 4.87% in April, compared to 5.25% cent in March. Meanwhile, factory output growth slowed to a five-month low of 2.1% in March as against 5% registered in February. Sentiments also remained up-beat with Paris-based think tank OECD saying that India is poised for stable growth even as economic activities are easing in neighbouring and some other developed nations. In other encouraging development the Reserve Bank of India has called for higher capital outlays, consistent fiscal consolidation and limiting the debt-GDP ratio to improve the finances of the states, whose combined gross fiscal deficit has improved by 20 bps to 2.3 percent of GDP in FY 2014-15.

On the global front, the US markets extending their somber run ended modestly lower in last session, reacting to an extension of the recent global bond market sell-off, though major averages were well off their worst level for the day at closing. The Asian markets were trading mostly in the green at this point of time.

Back home, there was broad-based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Meanwhile, none of the sectoral indices were trading in the red, while banking and auto witnessed the maximum gain in trade. Infrastructure, oil and gas, capital goods, power, realty and healthcare too were trading significantly. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1,344 shares on the gaining side against 390 shares on the losing side while 75 shares remain unchanged.

The BSE Sensex is currently trading at 27256.93, up by 379.45 points or 1.41% after trading in a range of 26989.49 and 27299.80. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.68%, while Small cap index gained 1.18%.

The top gaining sectoral indices on the BSE were Bankex up by 1.89%, Auto up by 1.83%, Infrastructure up by 1.64%, Oil & Gas up by 1.55% and Capital Goods up by 1.54%, while there were no losers on the index.

The top gainers on the Sensex were GAIL India up by 3.53%, Mahindra & Mahindra up by 3.01%, HDFC up by 2.79%, Tata Power up by 2.45% and Axis Bank up by 2.30%. On the flip side, Hindalco down by 2.33%, NTPC down by 1.66% and Vedanta down by 1.33% were the top losers.

Meanwhile, after passing the Constitution Amendment Bill for Goods And Services Tax (GST) in the lower House last week, the NDA government successfully pushed through the undisclosed Foreign Income and Assets Bill, 2015 to unearth black money stash overseas, in Lok Sabha.Under the proposed law, there would be a short compliance window within which people with undisclosed income abroad can come clean by paying 30% tax and 30% penalty. A time-frame will be provided as a compliance window.

However, for those who refuse to do so, the bill has provisions for rigorous punishment, including a jail term of 3-10 years. Besides, failure to meet the compliance timeline will attract an additional penalty of 90% for a total tax liability of 120% on the quantum of black money abroad. Reports suggest that there could be a two-month window to declare overseas assets and income and a six-month period to pay tax and penalty.

Once passed, the law would help the government in bringing black money in the declared economy, improving tax collections and eventually facilitating lowering of tax rates. Further, in a bid to ensure its easier and swifter clearance in the Rajya Sabha, the government has decided to keep the Bill outside the Income Tax (IT) Act and is treating it as Money Bill.

The CNX Nifty is currently trading at 8242.20, up by 115.25 points or 1.42% after trading in a range of 8153.80 and 8254.95. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were IDFC up by 3.54%, GAIL India up by 3.38%, Mahindra & Mahindra up by 3.05%, HDFC up by 2.77% and Bank of Baroda up by 2.59%. On the flip side, Hindalco down by 2.58%, NTPC down by 1.80%, Vedanta down by 1.26%, Zee Entertainment down by 0.81% and Tech Mahindra down by 0.10% were the top losers.

Asian markets were trading mostly in the green; Jakarta Composite increased 11.76 points or 0.23% to 5,217.37, Straits Times rose 12.43 points or 0.36% to 3,454.76, KOSPI Index gained 13.6 points or 0.65% to 2,110.37, Hang Seng advanced 40.3 points or 0.15% to 27,447.48, Taiwan Weighted surged 48.29 points or 0.5% to 9,729.02 and Nikkei 225 was up by 112.73 points or 0.57% to 19,737.57.

On the flip side, Shanghai Composite decreased 6.41 points or 0.15% to 4,394.81 and FTSE Bursa Malaysia KLCI was down by 0.78 points or 0.04% to 1,797.83.