Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued its firm trade in the late afternoon session on account of buying in frontline blue chip stocks taking cues from global counterparts. The sentiments got some support as the rupee rebounded after initial losses against the dollar, quoting at 66.95 following fresh selling of the American currency by banks and exporters on the back of sustained foreign capital inflows and a higher equity market. Investors maintained a cautious approach ahead of Index of Industrial Production (IIP) data for January scheduled to be released today. Traders were seen piling up position in FMCG, Oil & Gas and IT stocks while selling was witnessed in Metal, PSU and Power sector stocks. Banking stocks were trading under pressure after ratings agency CRISIL downgraded its ratings on debt instruments of eight public sector banks (PSBs). It has revised its outlook on five others to negative from stable. This is in addition to another rating downgrade and an outlook revision to Negative on two public sector banks (PSBs) over the past month. In scrip specific development, Sun Pharmaceutical Industries was trading in red after the drug maker had yesterday voluntarily recalled 381,120 cartons of osteoporosis drugs in the US and Puerto Rico.

On the global front, the Asian markets were trading in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,450 and 24,600 levels respectively. The market breadth on BSE was negative in the ratio of 961:1448, while 145 scrips remained unchanged.

The BSE Sensex is currently trading at 24663.13, up by 39.79 points or 0.16% after trading in a range of 24552.26 and 24817.80. There were 15 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.03%, while Small cap index down by 0.22%.

The gaining sectoral indices on the BSE were FMCG up by 0.84%, Oil & Gas up by 0.41%, IT up by 0.13%, TECK up by 0.09%, Auto up by 0.04% while, Metal down by 0.77%, PSU down by 0.52%, Power down by 0.49%, Bankex down by 0.39%, Capital Goods down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special up by 1.55%, Lupin up by 1.07%, TCS up by 0.94%, Hindustan Unilever up by 0.84% and ITC up by 0.84%.

On the flip side, BHEL down by 0.96%, Coal India down by 0.81%, ONGC down by 0.78%, SBI down by 0.58% and GAIL India down by 0.57% were the top losers.

Meanwhile, in order to prevent harassment of taxpayers, the government has streamlined assessment of transfer pricing cases, assuring a non-adversarial tax regime in the economy to attract foreign investment. This move will boost taxpayer confidence and could be seen as one of the biggest game changers for Indian transfer pricing litigation.

According to the guidance note issued by Central Board of Direct Taxes (CBDT), the cases would be picked up for scrutiny only through computer-assisted selection process (CASS) and there will be no manual picking of cases. The note also said that a tax officer will be able to refer cases to a transfer-pricing officer on three counts, including on finding that the taxpayer did not report an international transaction or a specified domestic transaction in the filing. Also, in a case where an appeal is pending on the matter related to transfer pricing adjustment of Rs 10 crore or above of last year.

Furthermore, the income tax officer could refer the case to the transfer-pricing officer if transfer-pricing issues have been identified in search or seizure. Nevertheless, the guidance note pointed out that if the case involving transfer pricing is not referred, then the officer shall not determine the arm's length price in any circumstance.

The CNX Nifty is currently trading at 7487.80, up by 1.65 points or 0.02% after trading in a range of 7460.60 and 7543.95. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 2.24%, Zee Entertainment up by 1.58%, Adani Ports & Special up by 1.28%, BPCL up by 1.27% and Lupin up by 1.13%.

On the flip side, Idea Cellular down by 2.20%, Tech Mahindra down by 2.07%, Kotak Mahindra Bank down by 2.00%, Vedanta down by 1.42% and ONGC down by 0.95% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 2.08 points or 0.11% to 1,971.41, FTSE Bursa Malaysia KLCI increased 5.51 points or 0.33% to 1,696.42, Shanghai Composite increased 5.58 points or 0.2% to 2,810.31, Jakarta Composite increased 7.96 points or 0.17% to 4,801.16, Taiwan Weighted increased 45.44 points or 0.52% to 8,706.14, Nikkei 225 increased 86.52 points or 0.51% to 16,938.87 and Hang Seng increased 215.18 points or 1.08% to 20,199.60.

The European markets were trading in green; UK’s FTSE 100 increased 91.58 points or 1.52% to 6,128.28, France’s CAC increased 93.81 points or 2.16% to 4,444.16 and Germany’s DAX increased 192.71 points or 2.03% to 9,690.86.