Benchmarks bounce back in green in late afternoon session

Markets have bounced back in green territory after showing a knee-jerk reaction, in the late afternoon session on account of buying in frontline blue chip counters. The sentiment got some support as foreign brokerage firm upgraded its rating on the Indian market to neutral from underweight, saying valuation premium to Asia has declined and is now approaching a 10-year average premium. Traders were seen piling position in Realty, IT and FMCG stocks while selling was witnessed in PSU, Bankex and Power sector stocks. Banking stocks remained under pressure as Finance Ministry in its 2015-16 annual Report has said that the gross non-performing assets (GNPAs) of banks could rise to 6.9% by March 2017 in a severe stress scenario, the deadline given by Reserve Bank of India (RBI) Governor Raghram Rajan for banks’ balance sheet clean-up, if the macro economic conditions deteriorate. In scrip specific development, Insecticides (India) was trading firm on receiving certificate of registration for Herbicide Bispyribac Sodium Technical 95% w/w Min. and Bispyribac Sodium 10% w/v SC under Section 9(3) of the Insecticides Act, 1968.

On the global front, the Asian markets were trading mostly in green while the European markets traded mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,800 and 25,400 levels respectively. The market breadth on BSE was negative in the ratio of 1164:1253 while 133 scrips remained unchanged.

The BSE Sensex is currently trading at 25493.54, up by 3.97 points or 0.02% after trading in a range of 25351.62 and 25606.92. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.12%, while Small cap index down by 0.04%.

The gaining sectoral indices on the BSE were Realty up by 0.97%, IT up by 0.75%, FMCG up by 0.50%, TECK up by 0.47%, Auto up by 0.30% while, PSU down by 1.41%, Bankex down by 1.14%, Power down by 0.50%, Oil & Gas down by 0.48%, Capital Goods down by 0.47% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.40%, TCS up by 1.17%, ITC up by 1.10%, Asian Paints up by 0.96% and Maruti Suzuki up by 0.90%.

On the flip side, SBI down by 4.57%, ICICI Bank down by 3.00%, Bharti Airtel down by 1.97%, Axis Bank down by 1.94% and BHEL down by 1.63% 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 7817.95, up by 3.05 points or 0.04% after trading in a range of 7772.15 and 7845.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.31%, Bosch up by 3.20%, Bharti Infratel up by 1.83%, Yes Bank up by 1.67% and Tech Mahindra up by 1.55%.

On the flip side, Bank of Baroda down by 8.77%, SBI down by 4.38%, ICICI Bank down by 2.91%, Idea Cellular down by 2.20% and Bharti Airtel down by 1.80% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 0.92 points or 0.05% to 1,967.91, Taiwan Weighted increased 13.91 points or 0.17% to 8,067.60, Shanghai Composite increased 23.75 points or 0.84% to 2,850.86, Nikkei 225 increased 54.19 points or 0.33% to 16,466.40 and Hang Seng increased 164.66 points or 0.84% to 19,883.95.

On the other hand, Jakarta Composite decreased 32.37 points or 0.68% to 4,729.35 and FTSE Bursa Malaysia KLCI decreased 9.52 points or 0.58% to 1,618.74.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 23.79 points or 0.39% to 6,114.71, France’s CAC decreased 44.16 points or 1.02% to 4,275.83, while Germany’s DAX increased 90.78 points or 0.92% to 9,952.90.