Post Session: Quick Review

Erasing all of their initial gains, Indian equity benchmarks ended Thursday’s trade flat. Markets made a gap-up opening as traders remained encouraged as the Federal Reserve has scaled back its projection for interest-rate hikes, keeping its policy rate unchanged at the end of its two-day rate-setting meeting and has once again ignited the call of rate cut from the Reserve Bank of India. Sentiments also remained up-beat with foreign institutional investors (FIIs) pumping in nearly $2 billion, as compared to a withdrawal of nearly $3 billion in the first two months of calendar year 2016 (CY16).

Key gauges reversed momentum and entered into red terrain in last leg of trade as investors opted to book profit at higher levels, but volatility in dying hour of trade helped markets to end flat. Traders failed to draw any sense of relief with Rupee Appreciation. The rupee strengthened by 54 paise to 66.68 against the dollar at the time of equity markets closing at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks amidst higher opening in the domestic equity market.

Selling got accelerated after European counters making a weak start with all CAC, DAX and FTSE were declining around a percent in early deals. However, Asian markets ended mostly in green as risk appetite revived after the Federal Reserve reduced the number of interest rate hikes expected this year, while the dollar nursed substantial losses.

Back home, selling in pharma space too dampened sentiments on report that the pharma sector in India could witness an immediate loss of Rs 1,000 crore due to the government ban on combination drugs that include cough syrups, anti-diabetic medicines and flu treatments. Select steel stocks ended lower despite Directorate General of Safeguards in the Central Board of Excise and Customs recommended extending the duty on hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more until March 2018.

Stocks related to infra and Aviation counters edged lower despite President Pranab Mukherjee saying that India is planning to invest over $120 billion in the development of airport infrastructure and aviation navigation services over the next decade. On the flip side, shares of cement companies remained in focus on report that most of the cement stocks have outperformed the market Since March 11, 2016 after the Union cabinet on cleared a proposal to amend the mines and minerals law to allow the transfer of captive mines granted through non-auction routes, a move likely to spur mergers and acquisitions (M&As) in the cement industry.

The NSE’s 50-share broadly followed index Nifty rose by over ten points and managed to hold the psychological 7,500 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined marginally to finish below its psychological 24,700 mark. Broader markets however traded with traction and ended the session slightly in green. The market breadth remained in favor of decliners, as there were 1,271 shares on the gaining side against 1,340 shares on the losing side while 184 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24677.37, down by 5.11 points or 0.02% after trading in a range of 24576.52 and 24948.30. There were 17 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader ended in green; the BSE Mid cap index was up by 0.52%, while Small cap index up by 0.07%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.26%, Basic Materials up by 1.28%, PSU up by 1.27%, Capital Goods up by 1.08% and TECK up by 0.88%, while Healthcare down by 1.24%, Realty down by 0.94%, Finance down by 0.27%, Auto down by 0.19% and Metal down by 0.10% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 4.27%, BHEL up by 4.23%, Adani Ports &Special up by 3.09%, ONGC up by 2.95% and Larsen & Toubro up by 0.93%. On the flip side, Lupin down by 4.23%, Cipla down by 1.54%, HDFC down by 1.44%, HDFC Bank down by 1.25% and Mahindra & Mahindra down by 1.15% were the top losers. (Provisional)

Meanwhile, the Central Board of Direct Taxes (CBDT), the apex direct taxes body has announced rules to implement the new regime that kicks in from April 1, with an aim to attract offshore fund management activity into the country. It has liberalized the tax framework to extend exemption to fund houses owned by a single institutional entity.

CBDT has said that the rules for operationalisation of the provisions of Section 9A of the I-T Act have been inserted in the Income-tax Rules, 1961. From April 1, 2016, the offshore funds will attract a special taxation regime under Section 9A, under which the fund management activity carried out through an eligible fund manager in India would not lead to the residence of the fund in India.

CBDT has also introduced an optional pre-approval mechanism which will work like an advance ruling, allowing such fund managers to get clarity on tax liability before starting operations. Under this mechanism, the fund can approach the CBDT to determine whether it has met the prescribed conditions and once the board grants approval, tax benefit cannot be denied to the fund by the tax officer. These rules have relaxed the harsh conditions imposed by Section 9A.

The CNX Nifty ended at 7512.55, up by 13.80 points or 0.18% after trading in a range of 7479.40 and 7585.30. There were 29 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 5.80%, BPCL up by 5.68%, Tech Mahindra up by 4.50%, BHEL up by 4.23% and GAIL India up by 4.00%. On the flip side, Lupin down by 4.34%, HDFC down by 1.59%, Cipla down by 1.21%, Tata Steel down by 1.20% and HDFC Bank down by 1.17% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX declined 132.04 points or 1.32% to 9,851.37, France’s CAC decreased 44.08 points or 0.99% to 4,418.92 and UK’s FTSE 100 was down by 6.14 points or 0.1% to 6,169.35.

Asian equity markets ended mostly in green on Thursday after the US central bank said it wouldn’t raise interest rates as quickly as expected. Investors seemed to find relief in the more dovish tone of the US Federal Reserve’s statement overnight. The Fed held its benchmark rate at between 0.25% and 0.50% - reflecting a more cautious view of US economy, weaker global growth and financial market volatility - and said it expects just two rate increases this year, down from the four it originally forecast. China stocks rose more than 1 percent as bargain hunting in technology stocks offset weakness in financial shares. Meanwhile, Japanese shares bucked the regional uptrend to end slightly lower as the dollar briefly hit a three-week low against the yen.