Markets continue to trade firm in early noon session

Indian equity benchmarks gradually moving higher are trading near the high points of the day, on fresh buying in blue-chip stocks, led by consumer durables, energy, metal, oil & gas, Power and PSU. Both the benchmarks were trading higher by around one percent. Besides, a firm trend at other Asian markets led by Japan after the Bank of Japan surprised markets by announcing a negative interest rate policy, too was supporting the markets. Sentiment got boost with the former Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that the Indian economy, which expanded at 7.7 per cent between 2003 and 2014, has potential to clock 8 per cent growth in the near future. Investors even overlooked the Reserve Bank Governor Raghuram Rajan’s statement that the country needs a better methodology to capture growth measured in terms of gross domestic product (GDP). There is a need for better computation of numbers to avoid overlaps and capture the net gains to the economy. He said that there are problems with the way we count GDP which is why we need to be careful sometimes just talking about growth. 

On the global front, Asian markets were trading mostly in green, after Japan shares took a roller-coaster ride in the immediate aftermath of the Bank of Japan's (BOJ) decision to adopt a negative interest rate policy. Back home, in scrip specific development, shares of Yes Bank were trading higher after the results beat the street expectations with recording profit growth of 25% year-on-year at Rs 676 crore on strong net interest income growth. On the flip side, Just Dial was trading down by 10.01% after company reported 16% year on year (YoY) drop in its net profit at Rs 26.99 crore for the third quarter ended December 31, 2015 (Q3FY16).

The BSE Sensex is currently trading at 24668.53, up by 198.96 points or 0.81% after trading in a range of 24340.06 and 24683.23. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.26%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.14%, Metal up by 1.88%, Oil & Gas up by 1.53%, Power up by 1.22% and PSU up by 1.17%, while Bankex down by 0.79% and Realty down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 5.02%, Mahindra & Mahindra up by 2.85%, ONGC up by 2.71%, Sun Pharma Inds. up by 2.59% and Hindustan Unilever up by 2.35%. On the flip side, ICICI Bank down by 4.14%, SBI down by 2.67%, Bharti Airtel down by 2.28%, Maruti Suzuki down by 1.80% and Axis Bank down by 1.11% were the top losers.

Meanwhile, Indian tax authorities along with its US counterpart have resolved over 100 transfer pricing disputes for sectors such as information technology (software development) services (ITS) and information technology-enabled services (ITeS) over a one-year period. The move is directed towards the broader objective of the government to improve the ease of doing business. This development is likely to enhance foreign investment flow. The Central Board of Direct Taxes (CBDT) has said that more cases are expected to be solved by the end of the financial year.

CBDT has said that resolution of such issues follows the framework agreement signed with the US revenue authorities in January last year to resolve about 200 transfer pricing cases. The framework was finalised under the mutual agreement procedure (MAP) provision contained in the India-USA Double Taxation Avoidance Convention (DTAC).

Further, encouraged by the success of the framework, the US has opened the bilateral advance pricing agreement (APA) programme to India. An APA is a multiple year contract between a taxpayer and at least one tax authority specifying the pricing method that the taxpayer will apply to its related-company transactions. Bilateral APAs involve the taxpayer, its local subsidiary, the Indian tax authority and that of the country the company is headquartered.

Besides, the CBDT said a combination of a robust APA programme and a streamlined MAP would be helpful in creating an environment of tax certainty and encourage MNCs to do business in India. So far in the current fiscal alone, CBDT has signed 39 (38 unilateral and one bilateral) APAs, with 30 agreements.

The CNX Nifty is currently trading at 7495.50, up by 70.85 points or 0.95% after trading in a range of 7402.80 and 7497.65. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 7.80%, Coal India up by 4.78%, ONGC up by 2.80%, Mahindra & Mahindra up by 2.73% and Sun Pharma up by 2.69%. On the flip side, Bank Of Baroda down by 4.19%, ICICI Bank down by 4.07%, SBI down by 2.65%, Bharti Airtel down by 2.23% and Maruti Suzuki down by 1.99% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 13.71 points or 0.84% to 1,648.24, Shanghai Composite increased 71.77 points or 2.7% to 2,727.43, Taiwan Weighted increased 125.19 points or 1.58% to 8,030.29, Nikkei 225 increased 312.96 points or 1.84% to 17,354.41 and Hang Seng increased 379.47 points or 1.98% to 19,575.30, while Jakarta Composite decreased 16.48 points or 0.36% to 4,586.34 and KOSPI Index decreased 3.72 points or 0.2% to 1,903.22.