Benchmarks continue weak trade in late afternoon session

Indian equity benchmarks continued its weak trade in the late afternoon session on account of selling in frontline blue chip stocks taking cues from weak global counterparts. The sentiments were under pressure from the early trade on falling crude oil prices after Saudi Oil Minister Ali Al-Naimi effectively ruled out production cuts anytime soon. Investors maintained a cautious approach ahead of the derivatives expiry and the Railway Budget scheduled for tomorrow. Railway Minister Suresh Prabhu is facing a stiff dilemma on whether to raise fares and freight rates in his second Rail Budget as railway finances has come under tremendous strain. Traders were seen piling position in Oil & Gas stocks while selling was witnessed in Metal, FMCG and Capital Goods sector stocks. Hectic buying activity was witnessed in sugar stocks amid growing concerns that heavy rains and drought from Thailand to Central America will tighten sugar supplies. In scrip specific development, IDBI Bank was trading in green as the company received markets regulator SEBI’s approval to raise Rs 3,771 crore through issuance of shares to Qualified Institutional Players (QIPs).

On the global front, the Asian markets were trading mostly in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,100 and 23,300 levels respectively. The market breadth on BSE was negative in the ratio of 859:1544 while 157 scrips remained unchanged.

The BSE Sensex is currently trading at 23207.69, down by 202.49 points or 0.86% after trading in a range of 23140.17 and 23338.89. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.37%, while Small cap index down by 0.67%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.40% while, Metal down by 1.83%, FMCG down by 1.14%, Capital Goods down by 0.83%, Auto down by 0.83%, PSU down by 0.60% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 0.93%, Infosys up by 0.85%, SBI up by 0.76%, Bharti Airtel up by 0.75% and Maruti Suzuki up by 0.64%.

On the flip side, BHEL down by 3.15%, Tata Motors down by 3.11%, NTPC down by 2.78%, ITC down by 2.11% and HDFC down by 2.01% were the top losers.

Meanwhile, government has come out with a uniform definition of startups under which a company with an annual turnover of less than Rs 25 crore in the first five years from the date of its incorporation/registration will be eligible for tax breaks and other incentives under the government’s start-up policy if it fulfils certain conditions. Notifying the definition, the Department of Industrial Policy and Promotion (DIPP) said it would bring about 'uniformity' and ensure that only genuine startups get the benefits.

Further, in its notification DIPP has said that in order to obtain tax benefits a startup so identified under the definition shall be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification, comprising a joint secretary with the DIPP and representatives of the departments of science and technology as well as biotechnology.

The DIPP also said that a startup must be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property. Besides, a company working on “significantly improved existing product or service or process that will create or add value for customers or workflow” will also be eligible for incentives if it fulfills other conditions. However, any such entity formed by “splitting up or reconstruction of a business already in existence” won’t be considered a start-up.

Startups will also be required to submit a simple application with various documents including a letter of funding of not less than 20 per cent in equity by any incubation fund/ angel fund/ private equity fund/ duly registered with SEBI that endorses innovative nature of the business. The process of recognition as a start-up would be through mobile app or the DIPP portal.

The CNX Nifty is currently trading at 7060.60, down by 48.95 points or 0.69% after trading in a range of 7031.00 and 7090.80. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.61%, Power Grid Corporation up by 2.04%, Bank of Baroda up by 1.73%, Yes Bank up by 1.65% and Axis Bank up by 1.06%.

On the flip side, BHEL down by 3.10%, Tata Motors down by 3.00%, NTPC down by 2.83%, Cairn India down by 2.34% and ITC down by 2.01% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 222.33 points or 1.15% to 19,192.45, Nikkei 225 decreased 136.26 points or 0.85% to 15,915.79, Taiwan Weighted decreased 51.78 points or 0.62% to 8,282.86, FTSE Bursa Malaysia KLCI decreased 12.47 points or 0.74% to 1,664.81, KOSPI Index decreased 1.69 points or 0.09% to 1,912.53 and Jakarta Composite decreased 0.05 points or 0% to 4,654.00.

On the other hand, Shanghai Composite increased 25.57 points or 0.88% to 2,928.90.

The European markets were trading in red; UK’s FTSE 100 decreased 38.34 points or 0.64% to 5,923.97, Germany’s DAX decreased 83.87 points or 0.89% to 9,332.90 and France’s CAC decreased 38.1 points or 0.9% to 4,200.32.