Post session - Quick review

Buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks negotiated a close in the green territory, breaching their four days losing streak. Earlier, markets exhibited sideways consolidation pattern as cautious investors chose to square off positions at every rise. Though, markets got momentum in last leg of trade which mainly helped Sensex to recapture its crucial 25,300 mark, while Nifty ended near its crucial 7,750 level after Skymet upgraded its monsoon forecast to 109% of Long-Period Average from 105% earlier. Some support came in with India, Iran, and Afghanistan signing the strategic Chabahar port pact.

However, gains remained capped as investors remained on sidelines ahead of the May F&O expiry due on Thursday. Traders also remained worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies. Market participants also remained concerned with SBI report stating that Credit growth in the country is unlikely to revive ‘materially’ in near term as demand conditions are still acting as a laggard. The yearly SBI Composite Index for May this year declined to 51.6, mainly due to lower credit growth. The monthly index, however, jumped to 50.3 in May from 46.5 in April due to increase in commercial vehicle and consumer durables sales.

European counters provided some support to domestic markets with CAC, DAX and FTSE making a firm opening after Eurozone consumer confidence improved for a second straight month and at a faster-than-expected pace in May to its highest level in four months. However, Asian markets ended mostly in red as a stronger yen weighed on exporters in Japan and speculation mounted the U.S. is closer to raising interest rates.

Back home, depreciation in Indian rupee capped some gains on Dalal Street. The rupee slid for the ninth day as it depreciated 14 paise more to trade at over two and half month low of 67.63 against the dollar at the time of equity markets closing, hit by sustained foreign fund outflows. Meanwhile, shares of sugar companies remained under pressure on concerns of lowering import duty on sugar and banning exports of the sweetener. On the flip side, Auto shares remained in top gear after the National Green Tribunal directed that all the diesel vehicles which are more than ten years old will not be permitted to ply on the road in the major cities of Kerala.

The NSE’s 50-share broadly followed index -- Nifty -- rose by around twenty points to end near its psychological 7,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by around eighty points to finish above the psychological 25,300 mark. However, broader markets underperformed benchmarks and ended the session slightly in red terrain.

The market breadth remained in the favour off decliners, as there were 907 shares on the gaining side against 1,599 shares on the losing side while 186 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25305.47, up by 75.11 points or 0.30% after trading in a range of 25181.47 and 25340.47. There were 18 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.16%, while Small cap index down by 0.65%. (Provisional)

The top gaining sectoral indices on the BSE were Finance 0.44%, Auto up by 0.32%, Bankex up by 0.28%, Basic Materials up by 0.22% and FMCG up by 0.18%, while Oil & Gas down by 1.01%, Healthcare down by 0.88%, Telecom down by 0.66%, TECK down by 0.40% and IT down by 0.32% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 1.99%, ICICI Bank up by 1.74%, Tata Motors up by 1.63%, Tata Steel up by 1.39% and Asian Paints up by 1.36%. On the flip side, Sun Pharma down by 1.57%, Bajaj Auto down by 1.43%, TCS down by 0.95%, GAIL India down by 0.94% and BHEL down by 0.89% were the top losers. (Provisional)

Meanwhile, in order to avoid tax disputes in future, the Central Board of Direct Taxes (CBDT) has taken the next big step in implementing the controversial ‘indirect transfer’ provisions that has dented India’s image among the foreign investor community which led to international companies face huge tax bills in the country. The department has issued a proposed set of rules for computation of the fair market value (FMV) of assets for taxing any indirect transfer of assets abroad. The FMV calculation is critical as it forms the basis of trigger of ‘indirect transfer’ provisions under the income tax law, say tax experts.

As per the proposal, if the asset is the share of an Indian company listed on a recognised stock exchange, the fair market value of the share will be the price of such a share on the exchange. When the share is listed on more than one recognised exchange, the price on the bourse recording the highest volume of trading will be considered. Furthermore, where the asset is the share of an Indian company not listed on a recognised exchange on the specified date, the FMV will the one determined by a merchant banker or an accountant 'in accordance with any internationally accepted pricing methodology for valuation of shares on arm's length basis and increased by the liability.

Stakeholders and general public have been given time till May 29 to electronically send in their comments and suggestions on the draft rules.

This move comes almost a year after finance minister Arun Jaitley had clarified in the 2015-16 budget that indirect transfer abroad between two companies would draw tax if the value of Indian assets of the company concerned on the specified date exceeded Rs 10 crore and these represented at least 50 per cent of the value of all the assets owned by such a foreign company globally.

The CNX Nifty ended at 7748.85, up by 17.80 points or 0.23% after trading in a range of 7715.80 and 7761.55. There were 29 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 2.06%, ACC up by 1.99%, Tata Motors up by 1.93%, Grasim Industries up by 1.88% and Ultratech Cement up by 1.67%. On the flip side, Aurobindo Pharma down by 4.20%, BPCL down by 2.81%, Idea Cellular down by 2.54%, Bajaj Auto down by 1.75% and Sun Pharma down by 1.56% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 40.56 points or 0.66% to 6,176.99, France’s CAC surged 56.43 points or 1.3% to 4,381.53 and Germany’s DAX was up by 85.32 points or 0.87% to 9,927.61.

Asian equity markets ended mostly lower on Tuesday as prices of oil and other commodities fell, while investors continued to struggle with uncertainty over the timing of the next US interest-rate increase. Japanese stocks fell for a second day, led by electric-appliance makers and car builders, as the yen held gains against the dollar, damping the outlook for export earnings. China’s stocks fell for the first time in three days, led by commodity producers, amid speculation raw-material prices will extend declines as a faltering economic rebound curbs demand.