Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on Wednesday, mirroring strength among the Asian peers after China’s trade data beat the street expectations. The rally is broadbased across multiple industries, as investors buy battered bluechips at attractive valuations. Sentiments got some support with Paris-based think tank OECD stating that India is witnessing firming economic growth while most of the developed economies are seeing mixed trends. The assessment based on Composite Leading Indicators (CLIs) stated that India's CLI inched up to 100.4 in November from 100.2 in October. Investors also were cheered by gains on Wall Street that snapped a losing streak, including an eight-day slump for the Nasdaq composite. However, gains remained capped with report that Industrial output fell 3.2 per cent in November, contracting by the sharpest margin in the past four years. The Index of Industrial Production (IIP) dipped for the first time in the past 13 months in November, after registering a five-year high rise of 9.8 per cent in October. Furthermore, Consumer Price Index-based (CPI) inflation for December rose to 5.61 per cent, against 5.41 per cent in November and 4.28 per cent in December last year, complicating the central bank’s task of steering monetary policy at a time of international deflation.

On the global front, Asian markets were trading higher on Wednesday after Chinese trade data beat expectations, offering a rare shaft of light for the global economy. Further, US equities ended higher on Tuesday led by energy shares after oil prices stabilised while gains in Apple also boosted the tech-laden Nasdaq and the broader S&P 500.  Back on street, all BSE sectoral indices were trading in the green. Among them, Realty index gained the most by 1.52 per cent, followed by Auto 1.36 per cent, FMCG 0.94 per cent and Banking 0.91 per cent. Among other shares, Cement stocks witnessed buying interest on ICRA’s report that India's cement demand is likely to improve gradually in the medium term in line with recovery in infrastructure, investment cycle and overall economy. In scrip specific development, shares of State Bank of India have gained as the bank plans to monetise non-core assets and list some of its subsidiaries for meeting capital needs as well as global risk norms, Basel III, which will kick in from March 2019. Furthermore, Tata Power gained after the company raised Rs 500 crore by issuing unsecured redeemable, taxable non-convertible debentures on private placement basis.

The market breadth on BSE was positive, out of 2374 stocks traded, 1381 stocks advanced, while 845 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24893.49, up by 211.46 points or 0.86% after trading in a range of 24804.64 and 24909.22. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84%, while Small cap index up by 0.65%.

The top gaining sectoral indices on the BSE were Realty up by 1.52%, Auto up by 1.36%, FMCG up by 0.94%, Bankex up by 0.91%, TECK up by 0.85%, while there were no losers on the BSE sectoral index.

The top gainers on the Sensex were Tata Motors up by 2.73%, Mahindra & Mahindra up by 2.60%, Infosys up by 2.50%, Bharti Airtel up by 2.09% and Sun Pharma Inds. up by 1.82%. On the flip side, TCS down by 1.55%, Hero MotoCorp down by 0.39%, Wipro down by 0.36%, Lupin down by 0.34% and ONGC down by 0.32% were the top losers.

Meanwhile, With an aim to improve ease of doing business, the government is likely to begin a sweeping revamp of direct taxes in the Budget 2016-17 that Finance Minister Arun Jaitley will present next month. This move comes as the Narendra Modi government has pledged a predictable and non-adversarial tax regime. Under this there will be two themes driving the revamp, such as simplification and rationalization. It will help to create more positive perception of India’s tax environment.

Besides, the attempt will be to remove clutter and simplify the tax law. The government has already spelt out this vision with its plan for corporate tax, which is to scrap the excess of exemptions and lower the levy. This will help in making the life simpler for companies and the government, making compliance easier, boosting business and driving up revenue.

In the budget 2015-16, Jaitley had said the government wants to lower the corporate tax rate to 25% over the next four years. The Budget next month will carry the process forward besides taking on board some of the suggestions made by the Justice RV Easwar committee on simplifying tax laws. The panel is expected to touch upon many areas, including defining royalties and fees for technical services.  Also on the agenda are streamlining the minimum alternate tax (MAT) regime, the subject of many disputes, and taxation of dividends. The panel has been asked to give its first set of recommendations by January end so that these can be taken up in this year's Budget.

The CNX Nifty is currently trading at 7573.75, up by 63.45 points or 0.84% after trading in a range of 7551.20 and 7585.95. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.95%, Tata Motors up by 2.68%, Mahindra & Mahindra up by 2.42%, Infosys up by 2.29% and Zee Entertainment up by 2.20%. On the flip side, TCS down by 1.73%, Vedanta down by 0.71%, Power Grid down by 0.53%, Dr. Reddys Lab down by 0.52% and Adani Ports &Special down by 0.38% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI was up by 0.08%, Jakarta Composite up by 0.91%, KOSPI Index up by 1.28%, Taiwan Weighted up by 0.49%, Nikkei 225 up by 2.68% and Hang Seng up by 2.38%. On the flip side, Shanghai Composite was down by 0.01%.