Benchmarks trade flat in noon deals; Sensex holds 28,300 mark

Indian equity benchmarks were trading near neutral lines in noon deals as investors opted to book profit after two days of continuous rally. Trade remained choppy on account of report that the India Meteorological Department (IMD) stated that the rainfall was below normal by 26 percent over the country during the period from 30 July to 5 August 2015. Marketmen also remained worried with Rajya Sabha being adjourned again with no work amid protests by the opposition parties, although Finance Minister expressed his hopes of meeting GST deadline. However, some support came with Labour Minister Bandaru Dattatreya's statement that pension fund could invest more into equities in the next fiscal year starting April by raising the current limit set at 5 per cent of total investable assets.

Global cues remained sluggish with European counters making a weak start with CAC, DAX and FTSE all trading in red in early deals. Asian markets were exhibiting mixed trend at this point of time as investors remained cautious ahead of US jobs data that could spur the Federal Reserve to raise interest rates in September. Back home, on the sectoral front, oil and gas, auto and capital goods witnessed the maximum gain in trade, while banking, realty and metal remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,437 shares on the gaining side against 1,175 shares on the losing side while 124 shares remain unchanged.

The BSE Sensex is currently trading at 28303.19, up by 5.06 points or 0.02% after trading in a range of 28234.09 and 28335.67. There were 11 stocks advancing against 18 stocks declining on the index while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28%, while Small cap index up by 0.49%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.07%, Auto up by 0.56%, Capital Goods up by 0.37%, IT up by 0.37% and Infrastructure up by 0.28%, while Bankex down by 0.52%, Realty down by 0.48%, Metal down by 0.19%, Consumer Durables down by 0.12% and FMCG down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.17%, ONGC up by 2.09%, Mahindra & Mahindra up by 1.85%, Tata Motors up by 1.48% and Reliance Industries up by 0.88%. On the flip side, Coal India down by 1.39%, SBI down by 1.13%, Bharti Airtel down by 0.94%, Bajaj Auto down by 0.65% and ITC down by 0.63% were the top losers.

Meanwhile, the government so far has resolved 35 transfer pricing disputes with US-based multinational companies in the software development and services sector (IT and ITeS), while around 100 disputes are likely to be settled in the next three months under an arrangement with the US. Recently, a framework agreement was signed between the two nations under the Mutual Agreement Procedure (MAP) provision of the India-US Double Taxation Avoidance Convention (DTAC) which helped in resolving the transfer pricing disputes. Under this agreement during the current year around 200 past disputes are to be resolved between the two countries in IT services and ITeS segments calling it a major positive development in tax dispute resolution.

This framework agreement has helped India in signing of bilateral Advance Pricing Agreements (APAs) with US where APAs settle transfer prices and the methods of setting prices of international transactions in advance. The Central Board of Direct Taxes (CBDT) said 'The Government is committed to conclude a large number of APAs to foster an environment of tax cooperation and certainty”.

In order to reduce tax litigation, the government is also signing agreements with large companies on the principles of calculating the taxable income arising from their local operations. These initiatives will in future provide stable tax environment to foreign investors doing business in India. The MAP programmes with other countries like Japan and UK are also progressing very well with regular meetings and resolution of past disputes.

The CNX Nifty is currently trading at 8585.50, down by 3.15 points or 0.04% after trading in a range of 8563.75 and 8595.95. There were 17 stocks advancing against 32 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Vedanta up by 2.29%, ONGC up by 1.85%, Mahindra & Mahindra up by 1.77%, Tech Mahindra up by 1.65% and Tata Motors up by 1.46%. On the flip side, Bank of Baroda down by 1.90%, SBI down by 1.50%, Coal India down by 1.48%, PNB down by 1.08% and Bharti Airtel down by 0.98% were the top losers.

Asian markets were trading mixed; Nikkei 225 rose 60.12 points or 0.29% to 20,724.56, Shanghai Composite surged 69.03 points or 1.89% to 3,730.57 and Hang Seng was up by 210.69 points or 0.86% to 24,585.97.

On the flip side, Jakarta Composite decreased 29.76 points or 0.62% to 4,776.80, FTSE Bursa Malaysia KLCI declined 14.09 points or 0.83% to 1,680.55, Taiwan Weighted slipped 7.27 points or 0.09% to 8,442.29 and KOSPI Index was down by 3.06 points or 0.15% to 2,010.23.

European Markets were trading in the red; Germany’s DAX lost 0.46%, France’s CAC declined 0.23% and UK’s FTSE was down by 0.17%.