Benchmarks continue to reel under pressure in noon deals

Indian equity indices continue to trade lower in noon deals with key gauges breaching their crucial 25,400 (Sensex) and 7,800 (Nifty) levels. Banking counters mainly playing spoil sports for the markets, as the Finance Ministry’s annual report, attributing mounting bad loans to economic sluggishness has said gross non-performing assets (GNPAs) of banks could soar to 6.9 per cent by March 2017 in a “severe stress scenario”. Moreover, traders opted for wait and watch strategy ahead of the outcome of the Assembly polls in five states, along with the next batch of fourth-quarter earnings and trends in global crude oil prices. On the global front, Asian stocks rebounded from a one-month low as Japanese shares advanced after a report the government may delay a planned sales tax increase. Back home, depreciation in Indian rupee too weighed down sentiments. The rupee weakened by 3 paise to 66.80 against the US dollar in noon deals due to continued demand for the American currency from banks and importers.

The BSE Sensex is currently trading at 25389.04, down by 100.53 points or 0.39% after trading in a range of 25351.62 and 25606.92. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.06%, while Small cap index down by 0.23%.

The few gaining sectoral indices on the BSE were IT up by 0.41%, Healthcare up by 0.38%, TECK up by 0.18% and Auto up by 0.11%, while PSU down by 1.48%, Bankex down by 1.48%, Power down by 0.67%, Oil & Gas down by 0.57% and Capital Goods down by 0.43% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 3.36%, Asian Paints up by 0.90%, Infosys up by 0.65%, Lupin up by 0.51% and Tata Motors up by 0.50%. On the flip side, SBI down by 4.43%, ICICI Bank down by 2.74%, Bharti Airtel down by 2.18%, Axis Bank down by 2.00% and BHEL down by 1.71% were the top losers.

Meanwhile, with a revised India-Mauritius pact in place to check round-tripping, Finance Minister Arun Jaitley has said that the investors must pay taxes on money earned in India and that India no longer needs any “tax-incentivised route” to attract foreign investments as Indian economy is now strong enough. He also ruled out any reduction of Foreign Direct Investment (FDI) due to imposition of capital gains tax on investments through the island nation.

Jaitley said that there was no “serious apprehension” of investors shifting base to other tax havens due to the re-drawing of the decades-old tax treaty with Mauritius -- the biggest source of foreign investments into India. He further added that by checking round-tripping of funds, the amendment would help boost domestic consumption.

Recently, India has concluded the long-negotiated amendments to the existing Double Tax Avoidance Convention with Mauritius. The changes will have an impact on foreign investors who route their investments from this country to avoid paying capital gains tax in India. India will begin imposing capital gains tax on investments in shares through Mauritius from April next onwards.

The CNX Nifty is currently trading at 7791.30, down by 23.60 points or 0.30% after trading in a range of 7772.65 and 7845.65. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 3.25%, Tech Mahindra up by 1.45%, Bosch up by 1.12%, Asian Paints up by 0.85% and Bharti Infratel up by 0.83%. On the flip side, Bank of Baroda down by 9.45%, SBI down by 4.44%, ICICI Bank down by 2.80%, Bharti Airtel down by 2.23% and Axis Bank down by 1.99% were the top losers.

Asian markets were trading in green; KOSPI Index rose 0.92 points or 0.05% to 1,967.91, Shanghai Composite increased 13.15 points or 0.47% to 2,840.26, Taiwan Weighted gained 13.91 points or 0.17% to 8,067.60, Nikkei 225 added 54.19 points or 0.33% to 16,466.40, Hang Seng was up by 153.06 points or 0.78% to 19,872.35.

On the flip side, Jakarta Composite decreased 27.28 points or 0.57% to 4,734.43 and FTSE Bursa Malaysia KLCI was up by 12.54 points or 0.77% to 1,615.72.