Benchmarks trade range-bound; Sensex holds 24500 mark

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading with marginal gains as investors turned cautious ahead of the expiry of January derivative contracts tomorrow. Besides, investors are also awaiting outcome of the US Fed meet which ends later today. Sentiments got some support with Standard & Poor's Rating Services’ statement that Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly. However, Investors remained cautious with the report that manufacturing activity in India dipped to a one-year low in January. The yearly SBI Composite Index fell below the 50 mark to 47.3 in January, its lowest level in the past one year, indicating moderation in economic activity going forward. According to the report, construction, steel and textile are some of the sectors that are clear headwinds and thus need to be addressed head-on.

On the global front, Asia markets were mostly higher on Wednesday as investors looked ahead to the U.S. Federal Reserve's latest statement on interest rates and the economic outlook. US stock indices rallied on Tuesday, driven by energy stocks following a recovery in oil prices. Back home, stocks from Power, Realty and Oil & Gas counters were supporting the markets’ uptrend, while those from Capital Goods, Banking and Consumer Durables counters were adding to the underlying cautious undertone. Among other shares, Pharma stocks witnessed buying interest on the report that the government scrapped the requirement of obtaining a 'No Objection Certificate' from the health ministry for drugs exported to developed countries including the US, Canada, Japan and Australia and the European Union. In scrip specific development, shares of Vardhman Textiles have surged after the company reported a strong 66% year on year growth in consolidated net profit at Rs 161 crore for the third quarter ended December 31, 2015 due to lower raw material cost.  Furthermore, National Building Construction Corporation (NBCC) has rallied after the company bagged a work order from India Trade Promotion Organization (ITPO) for re-development of Pragati Maidan in New Delhi for an estimated cost of Rs 2,149 crore.

The market breadth on BSE was positive, out of 2156 stocks traded, 1153 stocks advanced, while 874 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24525.23, up by 39.28 points or 0.16% after trading in a range of 24464.33 and 24645.70. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index up by 0.40%.

The top gaining sectoral indices on the BSE were Power up by 1.36%, Realty up by 0.71%, Oil & Gas up by 0.52%, PSU up by 0.51% and IT up by 0.30%, while Capital Goods down by 0.48%, Bankex down by 0.43%, Consumer Durables down by 0.29% and Metal down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.94%, Sun Pharma up by 1.44%, Maruti Suzuki up by 1.21%, Tata Motors up by 1.16% and ITC up by 0.92%. On the flip side, BHEL down by 2.61%, Coal India down by 1.44%, Hindustan Unilever down by 1.43%, Adani Ports &Special down by 1.01% and Larsen & Toubro down by 0.91% were the top losers.

Meanwhile, pitching for simpler tax laws, Finance Minister Arun Jaitley has said that the government is studying the recommendation given by the Parthasarathi Shome committee for simplifying tax administration. Jaitley said that the government is at an advanced stage of deliberating on the suggestions of the Shome Committee which had recommended reforms in both the direct and indirect tax wings of the government to make them more taxpayer friendly.

The Tax Administration Reform Commission (TARC), headed by Parthasarathi Shome submitted its report to Jaitley in June 2014. The Shome committee in its report pitched for a separate budget allocation to ensure time bound tax refund and a passbook scheme for TDS (Tax Deduction at Source). The report also proposed a complete revamp of the dispute resolution mechanism, widening the use of the permanent account number (PAN) and spending 10% of the tax department’s budget to improve taxpayer services.

Further the committee suggested for abolition of the post of revenue secretary, setting up of a tax council to develop a common tax policy and legislation for both direct and indirect taxes and merit-based promotions of officials in the tax administration. It also suggested that for large taxpayers, services should be provided by central board of excise and customs and central board of direct taxes under one umbrella. It had suggested that retrospective amendments to tax laws should be avoided as a principle and Income Tax Return forms should also include wealth tax details.

Besides, Jaitley said a committee has also been set up under Justice R V Easwar to simplify the Income Tax Act. Jaitley asserted that some of the recommendations of both the committees are likely to find a place in the Union budget to be presented on 29 February.

The CNX Nifty is currently trading at 7443.85, up by 7.70 points or 0.10% after trading in a range of 7419.70 and 7476.05. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.38%, NTPC up by 2.90%, Idea Cellular up by 1.73%, Sun Pharma up by 1.57% and Zee Entertainment up by 1.43%. On the flip side, Bank of Baroda down by 2.66%, BHEL down by 2.44%, Hindustan Unilever down by 1.60%, Coal India down by 1.56% and Kotak Mahindra Bank down by 1.29% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI was up by 0.34%, KOSPI Index up by 0.89%, Taiwan Weighted up by 0.18%, Jakarta Composite up by 0.7%, Hang Seng up by 0.47% and Nikkei 225 was up by 2.41%.  On the flip side, Shanghai Composite was down by 3.55%.