Post Session: Quick Review

Indian markets ended the three session losing streak with a major relief rally, on the back of aggressive short covering in heavyweights and value buying at lower levels after recent sell-off. Crude oil that had fallen severely, too witnessed some stabilization and supported the global equities. Earlier, the markets made a positive start, supported by good going in the Asian peers after inline estimated Chinese economic data were considered not that grave. Also, on the domestic front there was some optimism with upbeat earnings announcements post market hours on Monday and good show of IT bellwether HCL Tech before the opening. However, in early deals all the markets performed well except the good performing companies like, Asian Paints which reported a net profit of Rs 463 crore on sales of Rs 4,103 crore, Mindtree, which reported a 2.4 per cent sequential growth in its dollar revenue and declared a 1:1 bonus issue and HCL Technologies Tuesday reported 0.2 percent rise in consolidated net profit at Rs. 1,920 crores for the second quarter ended December 31, 2015. Meanwhile, markets got additional boost with the rupee recovery, which snapping its three-day losing streak, edged higher against the dollar at the Interbank Foreign Exchange, on fresh selling of the American currency by exporters and banks. Meanwhile, the Reserve Bank will purchase government securities for a total Rs 10,000 crore on Wednesday to inject liquidity into the market.

On the global front, while the US markets remained closed, the Asian markets after initial dilly-dallying performed well after China’s economy slowed at the end of last year, gross domestic product rose 6.8 percent in the fourth quarter from a year earlier. Industrial output in December rose 5.9 per cent from a year earlier, compared with forecasts for a 6.0 per cent increase. Chinese economic data fueled bets on further government stimulus led the markets in the region higher. Japanese market too moved higher, halting three days of declines that had pushed the benchmark gauge close to a bear market, as the yen fell for a second day. European equities bounced back from 13-month lows on Tuesday, with mining and energy stocks leading the market higher after prices of major industrial metals and crude oil surged.

Back home, the markets gained momentum in the very first hour of trade and started moving higher, there wasn’t any major profit taking attempt despite the recovery after three days of losses and markets continued ramping higher, surging to their intraday’s high, however there was some cautiousness in the final hours as India Ratings and Research said, the FY16 fiscal deficit is likely to rise to 4.1 per cent of GDP, higher than the government budgeted target of 3.9 per cent. It also said that the Indian economy is expected to grow by 7.9 per cent in the next fiscal and may progress at a similar pace over a couple of years extending beyond 2019. It said the GDP growth is likely to hover around this level of sub-8 per cent and can surpass it only if the host of policy initiatives taken by the new government actually show results. There was some somberness in PSU stocks too, after the Supreme Court directed the government to maintain status quo on the proposed disinvestment of Hindustan Zinc, in a huge blow to further disinvestment. The disinvestment of Hindustan Zinc was first proposed in 2002 but has been set back by a series of litigation. The markets despite some choppiness of final hours managed to snap the session near the highs of the day, and all the sectoral indices on the BSE ended in green.

The BSE Sensex ended at 24482.71, up by 294.34 points or 1.22% after trading in a range of 24247.23 and 24563.34. There were 21 stocks in green against 9 stocks in red on the index.  (Provisional)

The broader indices too ended with good gains; the BSE Mid cap index was up by 1.74%, while Small cap index added 1.80%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 2.89%, Bankex up by 1.83%, Realty up by 1.43%, Power up by 1.33%, Oil & Gas up by 1.11%.  (Provisional)

The top gainers on the Sensex were Adani Ports & SEZ up by 5.72%, Axis Bank up by 5.70%, Tata Motors up by 3.78%, Larsen & Toubro up by 3.67% and Bharti Airtel up by 3.38%. On the flip side, Mahindra & Mahindra down by 1.46%, Coal India down by 1.11%, Maruti Suzuki down by 0.96%, Wipro down by 0.85% and ITC down by 0.81% were the top losers.  (Provisional)

Meanwhile, in order to improve the ease of doing business, reduce litigation and accelerate the resolution of tax disputes, the committee, headed by retired high court judge R.V. Easwar, has suggested several taxpayer-friendly measures. The committee which was set up by the government to change direct tax laws, has recommended raising the threshold limits for deduction of tax at source as also slashing the rate of withholding tax, considering the importance of the long overdue revision of these puny limits.

The committee in its report, recommended enhancement and rationalization of the threshold limits and reduction of the rates of TDS (tax deducted at source). It proposed that 'TDS rates for individuals and HUFs (Hindu undivided family) to be reduced to 5 percent as against the present 10 percent. It has proposed raising the threshold for TDS to Rs 15,000 from Rs 2,500 annually and reducing the tax rate to 5 percent for interest on securities.  Besides, for other interest earnings it recommended raising the limit to Rs 15,000 from the present Rs 10,000 for bank deposits, and Rs 5,000 for others. For payments to contractors, the panel has proposed raising the TDS limit from the current Rs 30, 000 for single transaction and Rs 75,000 annually, to Rs1 lakh limit per annum.  The TDS threshold limit on rent income has been proposed to be raised from Rs 18 lakh annually to Rs 2.4 lakh. The threshold for fees for professional or technical services is recommended to be raised to Rs 50,000 from Rs 30,000, but it said the TDS rate here may be retained at 10 percent.

The committees in its 78 page draft report has said that nearly 65 percent of the personal income-tax collected in India was through TDS, whose provisions need to be made more friendly and less 'tedious', as they have remained over the years.

Furthermore, the committee also recommended deferring implementation of Income Computation and Disclosure Standards (ICDS) and making the process of refunds faster, to provide more time to taxpayers to deal with changes in law such as to the Companies Act, 2013, and the proposed Goods and Services Tax (GST) Act.  Besides, it suggested an increase in turnover limit for tax audit applicability from Rs. 1 crore to Rs.2 crore for business and Rs.1 crore for professionals.

In order to minimize human interface, the committee recommended that most of the processes of the income-tax department should be conducted electronically. Accordingly, it suggested that processes such as filing of tax returns, rectification of mistakes, appeal, refunds and any communication regarding scrutiny including notices, questions and documents sought should be done electronically.

The CNX Nifty ended at 7440.05, up by 89.05 points or 1.21% after trading in a range of 7364.15 and 7462.75. There were 38 stocks on gainers side against 12 stocks on losers side on the index.  (Provisional)

The top gainers on Nifty were Axis Bank up by 6.11%, Adani Ports & SEZ up by 6.09%, Idea Cellular up by 4.71%, Tata Motors up by 4.13% and Yes Bank up by 3.97%. On the flip side, Mahindra & Mahindra down by 1.26%, Power Grid Corpn. down by 1.19%, Maruti Suzuki down by 1.00%, Tech Mahindra down by 0.85% and Wipro down by 0.83% were the top losers.  (Provisional)

European markets were trading with good gains, France’s CAC increased by 81.06 points or 1.93% to 4,270.63, UK’s FTSE 100 was up by 88.59 points or 1.53% to 5,868.51 and Germany’s DAX surged by 159.17 points or 1.67% to 9,681.02.

Asian equity markets ended in green on Tuesday, after China's GDP data pointed to no hard landing. China's economy grew 6.9 percent in 2015, just short of the government's 7 percent target and its slowest pace in 25 years, putting pressure on policymakers to unveil more fiscal and monetary measures. GDP growth eased to 6.8 percent in the fourth quarter from a year earlier, matching expectations while industrial production rose 5.9 percent in December from a year ago, down from 6.2 percent in November and expectations for a moderation to 6.0 percent. Retail sales and fixed-asset investment also slowed at the end of the year, fueling speculation of more government stimulus. Japanese shares swung between gains and losses before finishing higher for the first time in four days as Chinese GDP data met expectations.