Benchmarks trade lower; Nifty slips below 8,200 mark

With a gap-down opening Indian equity markets have extended their previous session losses and are now trading with a cut of around half a percent, on back of sustained selling by fund and retails investors amid weak global cues, ahead of a policy statement from the US Federal Reserve later in the day today. At present, Sensex and Nifty were trading below the crucial 27,150 and 8,200 levels respectively. However, the session was proving productive for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.20-0.30%. Downside remained capped with report that India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year. Meanwhile, the government has set up a high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws, a report that could form basis for tinkering with the controversial retrospective applicability of tax.

In the scrip specific development, Navin Fluorine International rallied 11%, its 52-week high on the BSE, after reporting a more-than-double net profit at Rs 23.23 crore for the quarter ended September 30, 2015 (Q2), on back of strong operational performance.

On the global front, the US markets ended lower on Tuesday on uncertainty over the US rate outlook and disappointing results from Ford and other companies. The Asian markets were trading mostly in red as investors treaded cautiously ahead of the monetary policy announcement from the U.S. Federal Reserve later today. The Fed is widely expected to hold off on raising interest rates, but traders will be paying attention to signals regarding a rate hike later in December.

Closer home, traders were seen piling up position in Consumer Durables and FMCG, while selling was witnessed in Bank, Realty, Metal, PSU, Oil & Gas. The market breadth on BSE was positive in the ratio of 877: 654 while 84 scrips remained unchanged. 

The BSE Sensex is currently trading at 27122.27, down by 131.17 points or 0.48% after trading in a range of 27097.33 and 27158.57. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index gained 0.29%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.44% and FMCG up by 0.21%, while Bankex down by 0.97%, Realty down by 0.47%, Metal down by 0.43%, PSU down by 0.35%, Oil & Gas down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.16%, HDFC Bank up by 0.72%, GAIL India up by 0.50%, Tata Steel up by 0.49% and Tata Motors up by 0.42%. On the flip side, Axis Bank down by 5.78%, ICICI Bank down by 2.08%, Lupin down by 1.63%, ONGC down by 1.13% and Coal India down by 1.07% were the top losers.

Meanwhile, in its bid to further simplify the Income Tax laws and ease of doing business, the government has set up a 10-member panel under a former Delhi High Court judge to suggest simplification of over 50-year-old Income Tax Act. The panel will identify clauses that lead to litigations and suggest modifications to bring predictability and certainty in tax laws.The term of the committee is for one year and the first report is expected by January 2016.

The panel headed by Justice R V Easwar (Retd), has been asked to submit a preliminary report by January 31, so as to help incorporate some of them in the Budget for 2016-17. The panel has also been asked to suggest alternatives and modifications to the existing provisions and areas to bring about predictability and certainty in tax laws, without substantial impact on the tax base and revenue collection.

Finance Minister Arun Jaitley commenting on the development, said the main idea behind setting up the panel is to make the I-T Act more simple. “We have over the last few months been resolving a lot of past issues and now time has come to look at some provisions of the I-T Act to look at how their drafting quality can be improved in order to avoid ambiguity so that everybody is certain as to what the Act itself says. Jaitley said that several experts both from government and private sector are in it and this committee will be doing an ongoing study from time to time.

The other members of the panel are V K Bhasin, former law secretary, Vinod Jain, chartered accountant, Rajiv Memani, consultant, Ravi Gupta, senior advocate, Mukesh Patel, chartered accountant, Ajay Bahl, consultant, Pradip P Shah, investment adviser, Arvind Modi (IRS officer), and Vinay Kumar Singh (IRS officer). The panel will put its draft recommendations in the public domain and, after stakeholder consultations; the committee will formalize its recommendations, according to a finance ministry statement.

The CNX Nifty is currently trading at 8195.55, down by 37.35 points or 0.45% after trading in a range of 8181.00 and 8207.85. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.60%, Bharti Airtel up by 1.36%, GAIL India up by 1.08%, Asian Paints up by 0.94% and Idea Cellular up by 0.85%. On the flip side, Axis Bank down by 6.10%, Cairn India down by 2.79%, Adani Ports &Special down by 2.25%, ICICI Bank down by 2.06% and Lupin down by 1.53% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 153.54 points or 0.66% to 22,989.19, Taiwan Weighted decreased 64.58 points or 0.74% to 8,636.74, Jakarta Composite decreased 56.67 points or 1.21% to 4,617.39, Shanghai Composite decreased 20.6 points or 0.6% to 3,413.73, KOSPI Index decreased 10.49 points or 0.51% to 2,034.16 and FTSE Bursa Malaysia KLCI decreased 10.08 points or 0.59% to 1,686.87.

On the flip side, Nikkei 225 increased 91.38 points or 0.49% to 18,868.42.