Sensex surpasses 18,000 mark on positive Asian cues

The Indian equity markets have made a gap up opening with Sensex surpassing 18,000 level for the first time since August 4, 2011, following positive Asian cues. All the Asian equity indices barring Jakarta Composite were trading in the green at this point of time. European finance ministers wanted Greece to submit its entire rescue package with written undertakings. EU finance ministers will host a conference call instead of the meet tonight. Back home, in the large-cap space, Tata Motors rallied 6% after better than expected numbers in Q3 on account of JLR performance. However, standalone performance continues to disappoint the street due to raw material pressures and higher marketing spends. All groups of stocks traded higher on the Bombay Stock Exchange (BSE) barring oil and gas space. The auto index (3.29 percent) outperformed the broader markets mainly on account of a 6.50 percent surge in shares of Tata Motors. Realty and capital goods indices also traded with over 2 percent gains. Moreover, 47 of the 50 stocks listed on the Nifty index traded higher. The broader indices too were witnessing a good run in the trade. The market breadth on the BSE was positive; there were 1,417 shares on the gaining side against 486 shares on the losing side while 62 shares remained unchanged.

The BSE Sensex opened at 18,000.30; about 151 points higher compared to its previous closing of 17,848.57, and has touched a high and a low of 18,089.99 and 18,000.30 respectively.

The index is currently trading at 18,071.99, up by 223.42 points or 1.25%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth has made a strong start with 72.11% stocks advancing against 24.73% declines. The broader indices too were trading with lot of traction; the BSE Mid cap and Small cap indices surged 1.26% and 0.91% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 3.29%, Realty up by 2.40%, CG up by 2.32%, CD up by 1.98% and Bankex up by 1.61%. While, Oil and Gas down by 0.04% remained the only loser on the index.

The top gainers on the Sensex were Tata Motors up by 6.49%, Maruti Suzuki up by 4.01%, DLF up by 3.01%, M&M up by 2.97% and L&T up by 2.95%. On the flip side, RIL was down by 0.49% and NTPC was down by 0.28% were the only losers on the Sensex.

Meanwhile, in order to make the road transport system hassle free and harmonize the rates to facilitate easy movement of vehicles across the country, the government has suggested a one-time road tax of 6% be levied on the sale price of cars and two-wheelers instead of the present system where the quantum of tax varies from state to state. An online system for tax collection has also been proposed. Waiving of permit fee for tourist vehicles due to low collection has also been suggested.

A meeting between the Transport Development Council (TDC) and Transport Ministers from various State Governments / Union Territories was held recently under the chairmanship of the Union Minister for Road Transport & Highways C P Joshi. It was consensually decided to bring the floor rate of motor vehicle taxes for cars and two wheelers at 6% using sale price as the base rate.

However, the other important issue pertaining to motor vehicle taxes being paid by private cars vis-à-vis taxies/maxis remained inconclusive. It has been felt that in order to reduce barriers on inter-state movement of vehicles for goods and passengers, the motor vehicle tax must be simplified. However, due to differences in opinion amongst the participating members Joshi recommended that the issue be referred to the Empowered Group of Ministers of States who would submit their report in two months.

It was also decided to increase the national permit fee for trucks and goods vehicles by 10% to Rs 16,500 per vehicle annually, to be reviewed after two years, after the States complained of a loss of revenue due to the consolidated fee received by them under the new National Permit Scheme as compared to the revenue earned by them in the earlier system.

At present, road taxes charged by states on cars and two-wheelers vary from 2% to 18%. While some states levy a lifelong road tax, annual levies prevail in others. Delhi also charges a parking fee as part of tax. There are also significant variations in tax rates based on fuel, sale price of vehicle and engine capacity in many states.

As per Joshi, the sector has to adopt information technology (IT) solutions for providing seamless movement of vehicles across states which will reduce transaction costs involved in the movement of goods. He said, ‘with this objective in mind, there is a need to rationalize the existing motor vehicle taxation system in order to reap benefits of technology.’

The S&P CNX Nifty opened at 5,460.60; about 44 points higher compared to its previous closing of 5,416.05, and has touched a high and a low of 5,487.65 and 5,460.60 respectively.

The index is currently trading at 5,486.30, higher by 70.25 points or 1.30%. There were 47 stocks advancing against just 3 declines on the index.

The top gainers of the Nifty were Tata Motors up by 6.68%, Maruti Suzuki up by 3.93%, M&M up by 3.29%, DLF up by 3.13% and L&T up by 3.08%.

On the flip side, Reliance Industries down by 0.57%, NTPC down by 0.44% and BPCL down by 0.38% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up 20.15 points or 0.86% to 2,364.92, Hang Seng was up 412.82 points or 1.97% to 21,330.65, Nikkei 225 was up 237.87 points or 2.63% to 9,289.94, Straits Times was up 20.83 points or 0.70% to 3,008.24, Seoul Composite was up 20.25 points or 1.01% to 2,022.89 and Taiwan Weighted was up by 98.29 points or 1.25% to 7,982.37.

On the flip side, Jakarta Composite was down by 1.39 points or 0.04% to 3,951.43.