Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in late morning session on absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks ahead of the IIP data to be released later in the day. Sentiments remained subdued on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 580 crore on December 10, 2015. Weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the sentiment. Furthermore, RBI added to nervousness in the markets by announcing that they would intervene in the Exchange Traded Currency Derivatives (ETCD) market, if required. However, investor got some support with the report that India's exports, which have been in the negative zone since December last year, are soon expected to show improvement in growth because of the incentives announced recently. Meanwhile, shipping companies continue their upward trajectory on the report that the union cabinet chaired by Prime Minister Narendra Modi gave nod to the proposal for introducing steps to encourage shipbuilding and ship repair industry in India under the ‘Make in India’ initiative. Some public sector banks like SBI and PNB also gained after Fitch Ratings said it expects credit growth to improve moderately in FY16.  On the other hand, shares of oil exploration and production (E&P) firms declined along with drop in global crude oil prices.

On the global front, Asian markets continued their southward journey on Friday as plunging crude prices heightened fears about receding global growth, while China’s yuan hit its weakest level in more than four years. However, US stocks closed higher on Thursday, well off session highs but mostly shook off pressure from further decline in oil prices as beaten down energy stocks witnessed bargain hunting. Back on street, stocks from Metal, Consumer Durables and IT counters were supporting the markets’ uptrend, while those from Realty, FMCG and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Siemens have gained after the company won an order worth Rs 102 crore for Power Transmission system in West Bengal. On the other hand, Shares of SpiceJet have dropped after the company has allegedly defaulted on payments towards the Airports Authority of India (AAI).

The market breadth on BSE was positive, out of 2274 stocks traded, 1405 stocks advanced, while 736 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25238.68, down by 13.64 points or 0.05% after trading in a range of 25189.74 and 25316.14. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index up by 0.46%.

The top gaining sectoral indices on the BSE were Metal up by 1.30%, Consumer Durables up by 0.58%, IT up by 0.45%, Oil & Gas up by 0.33% and TECK up by 0.24%, while Realty down by 0.63%, FMCG down by 0.39%, Capital Goods down by 0.38%, Bankex down by 0.18% and Power down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.93%, Vedanta up by 1.92%, Hindalco up by 1.12%, Lupin up by 1.09% and Infosys up by 0.95%. On the flip side, ITC down by 1.46%, Larsen & Toubro down by 1.03%, ONGC down by 0.89%, NTPC down by 0.82% and BHEL down by 0.69% were the top losers.

Meanwhile, India and South Korea have signed a new memorandum of understanding (MoU) on suspension of collection of taxes during pendency of Mutual Agreement Procedure (MAP). This MoU will help to ease the burden of double taxation for taxpayers in both the countries during the pendency of MAP proceedings. This is a step towards ease of doing business in India for Korean companies, as it will relieve economic double taxation and promote cross-border trade and investment.

Besides, both the countries have also agreed that the transfer pricing cases will be taken up for MAP under the revised Double Taxation Avoidance Agreement (DTAA) between India and Korea. Under MAP, which is a preferred way to settle cross-border tax cases globally, the two sides can negotiate settlement on a case that can subsequently be taken off from the formal legal process. The resolution process draws up parameters for taxation in one country for which credit would be available in another.

MAP is an alternate dispute resolution mechanism that allows competent authorities of India and its treaty partner to negotiate a mutually acceptable settlement. Its main advantage is elimination of double taxation arising out of transfer pricing tax disputes, existence of Permanent Establishment, and characterisation of income and attribution of profits to such establishments.

The CNX Nifty is currently trading at 7678.20, down by 5.10 points or 0.07% after trading in a range of 7659.75 and 7703.05. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.93%, Vedanta up by 1.81%, Lupin up by 1.22%, Hindalco up by 1.19% and Cairn India up by 0.99%. On the flip side, ITC down by 1.48%, Power Grid down by 1.19%, Idea Cellular down by 1.15%, Larsen & Toubro down by 1.08% and ONGC down by 0.96% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted was down by 0.81%, Jakarta Composite down by 0.97%, Shanghai Composite down by 0.85%, KOSPI Index down by 0.23%, FTSE Bursa Malaysia KLCI down by 0.2% and Hang Seng was down by 0.64%. On the flip side, Nikkei 225 was up by 0.97%.