Markets remain in consolidation mood in late afternoon session

Markets stretching the consolidation mood were seen trading in green in the late afternoon session on account of buying in the fundamentally blue chip stocks. The sentiment got some support after a UN report enlightened that despite delay in domestic policy reforms, India’s economy is slowly gaining momentum and is projected to grow by 7.3% this year. The World Economic Situation and Prospect report, in its mid-2016 update, stated that India is expected to achieve a 7.5% GDP growth in 2017 and the economic prospects of the South Asian region will be contingent on the growth trajectory of India and Iran. Investors however maintained a cautious approach ahead of Industrial Production (IIP) for March and Consumer Price Index (CPI) for April data due to be released later in the day. Traders were seen piling position in Realty, Consumer Durables and Bankex stocks while selling was witnessed in FMCG sector stocks. In scrip specific development, Sutlej Textiles and Industries was trading firm after the Rajasthan-based textile maker reported a big jump in its fourth quarter net profit. The company’s net profit jumped 78 percent to Rs 49 crore in the March quarter on a year-on-year basis.

On the global front, the Asian markets were trading mostly in red while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,850 and 25,700 levels respectively. The market breadth on BSE was positive in the ratio of 1442:991 while 158 scrips remained unchanged.

The BSE Sensex is currently trading at 25716.61, up by 119.59 points or 0.47% after trading in a range of 25620.27 and 25827.03. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.50%, while Small cap index up by 0.79%.

The gaining sectoral indices on the BSE were Realty up by 1.38%, Consumer Durables up by 0.95%, Bankex up by 0.79%, IT up by 0.65%, Power up by 0.63% while, FMCG down by 0.07% was the only losing index on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.72%, Dr. Reddy’s Lab up by 2.68%, Asian Paints up by 1.90%, Tata Motors up by 1.82% and SBI up by 1.62%.

On the flip side, Hindustan Unilever down by 1.47%, Axis Bank down by 0.70%, Mahindra & Mahindra down by 0.68%, HDFC down by 0.63% and Maruti Suzuki down by 0.59% were the top losers.

Meanwhile, after successfully amending the India-Mauritius tax treaty to prevent loss of revenue and round-tripping, India is now looking to start talks with Singapore to tweak the double taxation avoidance agreement (DTAA) with the nation to plug any similar leakages and will start negotiations with Singapore soon.

The capital gains tax benefit under bilateral tax treaty between India and Singapore is linked to the capital gains tax provision in the India-Mauritius tax treaty . However, this parity is not automatic and the India-Singapore treaty will have to be amended to clearly spell out the changes.

The revamped India-Mauritius treaty will essentially mean capital gains on investments made in India through Mauritius will get fully taxed here from April 1, 2019. The Singapore treaty also stands to lose the benefit it has enjoyed till now because of the changes. But since it's an international protocol and India is keen to provide stability and certainty to investors, the government is keen on renegotiating it and incorporating clear provisions upfront in the treaty with Singapore.

Revenue Secretary Hasmukh Adhia has said that the India-Singapore tax treaty already has a Limitation of Benefit (LoB) clause that makes investments of $100,000 mandatory. He added that LoB limits that are there in the India-Singapore treaty should not change but the remaining dispensation should apply to them (50% of domestic tax rate).

Singapore is the second-biggest source for foreign direct investments (FDI) into India after Mauritius, accounting for over 16% of cumulative inflows so far. Singapore is an important financial centre for investments into the country.

The CNX Nifty is currently trading at 7882.95, up by 34.10 points or 0.43% after trading in a range of 7849.65 and 7916.05. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 2.80%, ICICI Bank up by 2.66%, Asian Paints up by 2.02%, Tata Motors up by 1.80% and Bosch up by 1.76%.

On the flip side, Aurobindo Pharma down by 1.87%, Hindustan Unilever down by 1.46%, Mahindra & Mahindra down by 0.86%, Axis Bank down by 0.72% and Maruti Suzuki down by 0.68% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 139.83 points or 0.7% to 19,915.46, Taiwan Weighted decreased 27.51 points or 0.34% to 8,108.05, KOSPI Index decreased 2.61 points or 0.13% to 1,977.49 and Shanghai Composite decreased 1.17 points or 0.04% to 2,835.86.

On the other hand, Jakarta Composite increased 1.51 points or 0.03% to 4,801.47, FTSE Bursa Malaysia KLCI increased 3.17 points or 0.19% to 1,647.75 and Nikkei 225 increased 67.33 points or 0.41% to 16,646.34.

The European markets were trading in red; UK’s FTSE 100 decreased 46.38 points or 0.75% to 6,116.11, Germany’s DAX decreased 53.47 points or 0.54% to 9,921.85 and France’s CAC decreased 17.58 points or 0.41% to 4,299.09.