Markets turn choppy; manage to remain in green

Markets are showing a choppy trend and after making a good recovery, have once again pared their gains, although the major indices are managing to trade in green. Traders have turned cautious with many of the global investment banks trimming the targets of domestic benchmark indices following the global upheaval in stock markets last week. On the same time the rupee weakness for the second straight session on sustained month-end dollar demand, too was weighing down the sentiments. The weakness in the regional markets too was putting pressure on the domestic markets, while the Chinese market was down from the beginning; the Japanese market too has suffered cuts of over a percent after Japan's factory output contracted a worse-than-expected 0.6 per cent on-month in July.

Back home, oil and gas sector stocks were in jubilant mood after global oil prices fell in Asian trade as investors took profits, snapping gains last week. Additionally, ONGC was up by around one and half a percent as the company and its partners will invest about $24 billion to produce natural gas from a giant field off Mozambique and converting it into liquid fuel (LNG) for export by ships to consumers like India. While the broader markets are outperforming the benchmarks, on sectoral front healthcare has taken the lead, FMCG, banking and technology too were moving higher along with oil & gas, while realty, auto and metal counters were suffering profit taking.

The BSE Sensex is currently trading at 26395.62, up by 3.24 points or 0.01% after trading in a range of 26225.71 and 26504.73. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index gained 0.27%, while Small cap index up by 0.06%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.80%, PSU up by 0.51%, Bankex up by 0.25%, FMCG up by 0.13%, TECK up by 0.12% while, Realty down by 0.67%, Auto down by 0.47%, Metal down by 0.25%, Capital Goods down by 0.19%, INFRA down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.90%, GAIL India up by 2.02%, Sun Pharma Inds. up by 1.80%, ONGC up by 1.46% and Dr. Reddys Lab up by 1.30%. On the flip side, Bharti Airtel down by 2.26%, BHEL down by 1.90%, Tata Steel down by 1.44%, Infosys down by 1.15% and Bajaj Auto down by 1.00% were the top losers.

Meanwhile, the new black money law by the Narendra Modi government has spooked the Swiss banks. Due to the fear of being accused of 'abetting' the hoarding of untaxed assets, Swiss and other European banks are urging their Indian clients to disclose their accounts to the tax authorities back home. The banks having headquarters in Switzerland and London have asked the Indian customers including those having turned NRIs, to avail the ongoing 'one-time compliance' window provided by the Indian tax authorities for disclosure of undeclared foreign assets. Besides, these banks are also asking their clients to give fresh undertakings to state that they are in compliance with all the laws in their home countries. In order to confirm the clean status of money, Swiss banks have also started asking for auditor certificates from high net worth individuals and corporate clients.

Under the new law, a three-month compliance window has been given for disclosure of all undeclared foreign assets till next month, for which they would need to pay 30% tax and 30% penalty. However, after this window anyone with undisclosed foreign assets would have to pay 30% tax and 90% penalty and further would also be labile for jail term of up to 10 years. The law also provides for 'punishment for abetment' where the abettor would be punishable with careful imprisonment for a term which shall not be less than 6 months but may extend to 7 years along with fine. This provision would be applicable to those who abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to tax payable under this Act which is false and which either knows to be false or to commit an offence.

In order to curb the black money menace, Supreme Court had formed special investigation team who is investigating various cases, while the government would soon be coming out with a stringent that provides for hefty penalties as well as imprisonment for stashing away unaccounted money. Meanwhile, Switzerland is also moving towards automatic exchange of tax information with various jurisdictions, including India.

The CNX Nifty is currently trading at 8011.55, up by 9.60 points or 0.12% after trading in a range of 7954.30 and 8043.60. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.07%, HCL Tech. up by 2.55%, GAIL India up by 2.40%, NMDC up by 2.25% and BPCL up by 2.07%. On the flip side, Bharti Airtel down by 2.41%, BHEL down by 2.00%, Tata Steel down by 1.62%, Bajaj Auto down by 1.54% and ACC down by 1.16% were the top losers.

Asian markets were showing mixed trend, KOSPI Index was up by 3.82 points or 0.2% to 1,941.49, Hang Seng gained 29.96 points or 0.14% to 21,642.35, Jakarta Composite was up by 34.16 points or 0.77% to 4,480.36 and Taiwan Weighted surged by 155.74 points or 1.94% to 8,174.92.

On the other hand, Nikkei 225 declined by 245.84 points or 1.28% to 18,890.48, Shanghai Composite lost 38.82 points or 1.2% to 3,193.53 and Straits Times was down by15.16 points or 0.51% to 2,940.78.