Markets continue to trade range-bound with modest gains

Indian equity benchmarks were trading in tight band in noon deals, but with modest gains, with Nifty and Sensex trading near their crucial 8,450 and 27,900 levels respectively. Sentiments remained up-beat on the back of increased buying by funds and investors led by positive GDP growth data for the March quarter. Some support also came with government beating its own target of containing Fiscal deficit, gap between government’s expenditure and revenue, at 3.99 per cent of GDP, lower than the downwardly revised estimate of 4.1 per cent provided in the government's first full Budget of FY15-16. 

However, gains remained capped as Asian markets were trading mostly in the red at this point of time after separate surveys of Chinese factory activity failed to banish concerns about a slowdown in the world's second-largest economy. Persistent fears about Greece’s financial situation and downbeat US data also sapped investors’ confidence.

Back home, the rupee gained 18 paise at 63.64 against the American currency in afternoon trade on sustained selling of dollars by banks and exporters in view of fresh foreign capital inflows into the equity market. On the sectoral front, realty, capital goods and oil and gas witnessed the maximum gain in trade, while healthcare, infrastructure and auto remained the top losers on the BSE sectoral space. The broader indices too were going neck-in-neck with benchmarks, while the market breadth on the BSE was negative; there were 1,193 shares on the gaining side against 1,225 shares on the losing side while 107 shares remain unchanged.

The BSE Sensex is currently trading at 27892.50, up by 64.06 points or 0.23% after trading in a range of 27737.58 and 27959.43. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index gained 0.16%.

The top gaining sectoral indices on the BSE were Realty up by 1.91%, Capital Goods up by 1.54%, Oil & Gas up by 1.02%, FMCG up by 0.73% and Power up by 0.52%, while Healthcare down by 2.33%, Infrastructure down by 0.64%, Auto down by 0.29%, Consumer Durables down by 0.13% and Bankex down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.83%, Cipla up by 2.70%, Larsen & Toubro up by 2.12%, Hindustan Unilever up by 1.96% and Maruti Suzuki up by 1.92%. On the flip side, Sun Pharma down by 8.24%, Bharti Airtel down by 2.19%, Tata Motors down by 1.51%, ONGC down by 0.77% and Axis Bank down by 0.62% were the top losers.

Meanwhile, the new service tax regime has become effective from June 1, making services like railways, airlines, banking, insurance, advertising, architecture, construction, credit cards, event management and tour operators’ costlier as they will attract higher tax. Finance Minister Arun Jaitley in his Budget had proposed to raise service tax from 12.36 % (including education cess) to 14%.

The Finance Minister had proposed to raise the service tax rate to 14 % to facilitate a smooth transition to the Goods and Services Tax (GST) regime, which the government wants to roll out from April 2016, as once implemented, GST will subsume service tax, excise and other local levies. Education cess, which is levied on service tax, will be subsumed in the service tax rate with effect from 1 June.

Fares for first class and AC classes in passenger trains, besides freight charges, will go up by 0.5% from 1 June. Currently, 3.7% service tax is levied on train fares for AC class, first class and freight. This will go up to 4.2% from June 1. Currently, there is abatement of 70% on passenger services. Although the Union Budget proposed a 2% Swachh Bharat cess on selected services, the government is yet to come out with a notification in this regard.

The CNX Nifty is currently trading at 8448.50, up by 14.85 points or 0.18% after trading in a range of 8405.40 and 8467.15. There were 32 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.91%, Cipla up by 2.61%, Larsen & Toubro up by 2.35%, BPCL up by 2.14% and Hindustan Unilever up by 1.97%. On the flip side, Sun Pharma down by 8.32%, HCL Tech down by 2.43%, Bharti Airtel down by 2.31%, Lupin down by 2.00% and Tata Motors down by 1.58% were the top losers.

Asian markets were trading mostly in the red; Taiwan Weighted decreased 75.38 points or 0.78% to 9,625.69, Jakarta Composite shed 26.22 points or 0.5% to 5,190.16, KOSPI Index dipped 12.43 points or 0.59% to 2,102.37 and FTSE Bursa Malaysia KLCI was down by 9.44 points or 0.54% to 1,738.08.

On the flip side, Nikkei 225 rose 6.72 points or 0.03% to 20,569.87, Shanghai Composite increased 215.19 points or 4.67% to 4,826.93 and Hang Seng was up by 311.92 points or 1.14% to 27,736.11.