Markets trade flat; TCS lose around 2%

Markets are showing some nervousness and trade has turned choppy after a decent start, following a smart two-day rebound in the Chinese stock market and hopes of Greece securing a bailout deal in forthcoming EU meet on Sunday. Markets witnessed bouts of serious profit taking that dragged them to negative territory too. Worries of corporate earnings was taking its toll on the markets after IT bellwether TCS despite a margin improvement reported a sequential net profit decline of 3.3% to Rs 5,709 crore in the April-June quarter and also missed revenue guidance for the fourth straight quarter. The stock was down by around 2%.

Benchmarks, were just trading flat with a positive bias slipping away from the crucial psychological levels of 27700 (Sensex) and 8350 (Nifty) that they reclaimed in early trade. Marketmen were taking cautious approach ahead of the Industrial Production data to be released later in the day, overlooking a firming trend at other Asian markets after Chinese market surged again on government measures to boost the market. The broader markets too have given up some of their gains but were in comparatively better position than the benchmarks. On sectoral front too, many of the indices have lossened their weight and were trading in red, with FMCG, consumer durables, realty and tech taking the lead, however some support was coming from capital goods, banking and metal pack.

The BSE Sensex is currently trading at 27585.54, up by 11.88 points or 0.04% after trading in a range of 27530.90 and 27729.46. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index gained 0.11%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.87%, Metal up by 0.49%, Bankex up by 0.38%, Power up by 0.02%, while FMCG down by 0.86%, Consumer Durables down by 0.67%, Realty down by 0.57%, TECK down by 0.44%, INFRA down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.27%, BHEL up by 2.02%, Coal India up by 1.47%, Sun Pharma Inds. up by 1.23% and Tata Motors up by 1.22%. On the flip side, Bharti Airtel down by 2.98%, Hindustan Unilever down by 2.41%, NTPC down by 2.17%, ONGC down by 2.11% and GAIL India down by 2.08% were the top losers.

Meanwhile, Finance Ministry has informed that the negotiations on the double taxation avoidance agreement (DTAA) between India and Mauritius are in advanced stage and the pact would be revised soon. Revenue Secretary Shaktikanta Das has said that “DTAA treaty (with Mauritius) is in very advanced stage of negotiation. It is progressing in a very constructive manner. And we expect it would be concluded in the near future.”

Last month, Mauritius had submitted a draft protocol to be used as a basis to finalise the discussions. Negotiations to amend the Indo-Mauritius double taxation avoidance convention have been hanging fire for a long time amid concerns that Mauritius is being used for round-tripping of funds into India. Mauritius has though said that the country has put in place a stronger anti-black money laws and a mechanism to stop round-tripping to India.

The DTAA between the two nations was signed in 1983 and has been allegedly used by the companies for evading taxes through round tripping. Under the DTAA, capital gains on sale of assets in India by companies registered in Mauritius can only be taxed in Mauritius. While short-term capital gains are taxed at 10 per cent in India, they are exempt in Mauritius. Mauritius is one of the top sources of FDI into India. Investments from Mauritius to India have totaled $87.55 billion since April, 2000.

The CNX Nifty is currently trading at 8331.85, up by 3.30 points or 0.04% after trading in a range of 8315.40 and 8376.35. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.34%, Vedanta up by 2.27%, BHEL up by 2.01%, Bank Of Baroda up by 1.90% and Cairn India up by 1.67%. On the flip side, Bharti Airtel down by 3.20%, Idea Cellular down by 2.84%, Hindustan Unilever down by 2.56%, ONGC down by 2.11% and NTPC down by 2.06% were the top losers.

The Asian markets were trading mostly in green, KOSPI Index was up by 3.36 points or 0.17% to 2,031.17, FTSE Bursa Malaysia KLCI gained 12.86 points or 0.76% to 1,714.40, Straits Times was higher by15.51 points or 0.47% to 3,282.91, Jakarta Composite added 31.94 points or 0.66% to 4,870.22, Shanghai Composite surged by 203.68 points or 5.49% to 3,913.01and Hang Seng was higher by 592.78 points or 2.43% to 24,985.57.

On the flip side, Nikkei 225 declined by 75.67 points or 0.38% to 19,779.83 and Taiwan Weighted lost 61.98 points or 0.69% to 8,914.13.