Indian equities trim losses to trade in green in late afternoon session

Indian equities trimmed losses to trade in green above neutral line in the late afternoon session. The street witnessed a lot of volatility as Union Finance Minster continued to divulge the details of Union Budget 2012-13, which offered a mix of sops, taxes and pledges to bring down deficit. Traders were seen piling up position in FMCG, Auto and Bankex sector while selling was witnessed in Oil & Gas, HealthCare and PSU sector. The Finance Minister started off the budget speech on assurance that there were clear signs of an economic recovery in India. While unveiling his budget he said the growth of the Indian economy, estimated at 6.9 percent during the current fiscal year was disappointing but that the road ahead appeared reassuring. As usual the FM while presenting his seventh federal budget awarded sops to some sector while axed from the other. The Budget proposed a marginal raise in income tax exemption limit of Rs 20,000 but on the other hand hiked service tax and standard excise duty by 2 percent across the board to net an additional Rs 41,440 crore a year. The Budget for 2012-13 left corporate tax rate and peak customs duty unchanged while the import duty on gold bars and platinum and excise duty on cigarettes, bidis, pan masala and chewing tobacco were raised. The direct tax proposals in the Budget will result in a revenue loss of Rs 4,500 crore while indirect tax proposals would result in a revenue gain of Rs 45,940 crore. Thus the tax proposals will lead to a net gain of Rs 41,440 crore.

Pranab Mukherjee announced 20% reduction in Securities Transaction Tax (STT) on delivery transactions to 0.1% in Union Budget 2012-13. The FM has proposed a new equity savings scheme named after Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50 percent to new retail investors, who invest up to Rs 50,000 directly in equities and whose annual income is below Rs 10 lakh to be introduced. The scheme will have a lock-in period of 3 years. Besides, various steps is been proposed to be taken for deepening the reforms in the Capital markets, including simplifying process of IPOs, allowing QFIs to access Indian Bond Market etc. The FM has proposed disinvestment target in 2012-13 of Rs 30,000 crore.

On the global front, Asian markets were trading in red barring Shanghai Composite and Nikkei 225 while the European markets were trading on mix note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,400 and 17,700 levels respectively. The market breadth on BSE was in favor of declines in the ratio of 1308:1346 while 133 scrips remained unchanged.

The BSE Sensex is currently trading at 17,754.52 up by 78.67 points or 0.45% after trading as high as 17,871.00 and as low as 17,534.65. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56% while Small cap added 0.03%.

On the BSE sectoral space, FMCG was up by 1.84%, Auto up by 1.49%, Bankex up by 1.35%, Realty up 1.01% and IT up 0.74% were the top gainers, while Oil & Gas down by 2.36%, Healthcare down 1.37%, PSU down by 0.74%, Capital Goods down by 0.19% and Consumer down by 0.18% were the major losers in the space.

M&M up by 3.73%, ITC up by 3.12%, HDFC Bank up by 2.16%, DLF up by 1.86% and Coal India up by 1.66% were the major gainers on the Sensex, while Sun Pharma down by 7.37%, ONGC down by 4.69%, RIL down by 1.89%, Jindal Steel down by 1.79% and NTPC down by 1.06% were the major losers in the index.

Meanwhile, finance minister Pranab Mukherjee announced a Rs 1,00,000 crore increase in the agriculture credit target to Rs5,75,000 for the next fiscal and raised the outlay for farm sector by about Rs3,000 crore. 'Agriculture continues to be a priority to the government. The total plan outlay for agriculture and cooperation has been increased by 18% from Rs 17,123 crore in 2011-12 to Rs20,208 crore in 2012-13,' Mukherjee said in his Budget speech.

The allocation for scheme Bringing Green Revolution in Eastern India was also increased by Rs600 crore to Rs1,000 crore in next fiscal considering the success of the programme that led to an additional paddy production of 7 million tonne in the Kharif season of 2011-12 crop year. The allocation for Rashtriya Krishi Vikas Yojna (RKVY) was also increased by 17% to Rs 9,217 crore. Farmers need timely access to affordable credit. It is proposes to raise the target for agricultural credit in 2012-13 to Rs 5,75,000 crore. This represents an increase of Rs1 lakh core.

The credit target for this fiscal has been set at Rs 4,75,000 crore. During April-November period, credit worth Rs 2,94,023 were disbursed by banks to farmers, according to data provided by Economic Survey. The outlay for Rashtriya Krishi Vikas Yojna is being increased from Rs7,860 crore in 2011-12 to Rs9217 crore in 2012-13.

The S&P CNX Nifty is currently trading at 5,412.85, up by 32.35 points or 0.60% after trading as high as 5,445.65 and as low as 5,340.90. There were 35 stocks advancing against 15 declines on the index.

The top gainers on the Nifty were JP Associates up by 6.13%, M&M up by 4.01%, Reliance Infrastructure up 3.77%, IDFC up by 3.14% and ITC up by 2.92%.Sun Pharma down by 6.57%, Cairn India down by 5.30%, ONGC down by 4.82%, Jindal Steel down by 2.10% and Reliance Industries down by 1.77% were the major losers on the index.

In the Asian space, Hang Seng shed 0.17%, Jakarta Composite fell 0.45%, KLSE Composite eased 0.06%, Straits Times declined by 0.07%, Seoul Composite inched down 0.46% and Taiwan Weighted fell 0.82%. On the other hand Shanghai Composite jumped 1.30% and Nikkei 225 gained 0.06%.

The European markets were trading on a mix note with, France’s CAC 40 shed 0.02%, Germany’s DAX jumped 0.15% while Britain’s FTSE 100 added 0.21%.