Benchmarks add strength in late afternoon session

Indian equity benchmarks added gains hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters taking cues from the European markets. Investors maintained a cautious approach ahead of Brexit votes as polls showed the outcome of a UK referendum on whether to leave the European Union remained too close. Traders were seen buying in Bankex, Auto and FMCG stocks while selling was witnessed in Realty, Power and TECK sector stocks. Buying activity was witnessed in banking stock as RBI governor Raghuram Rajan in a meet yesterday stated that government should sell recapitalization bonds to banks and pump the money back into the struggling lenders. The governor added that the slowdown in credit growth is not because high interest rates but banks are averse to lend because of mounting bad loans. In scrip specific development, Reliance Communications was trading in green after domestic rating agency has upgraded the outlook to stable. Sun Pharmaceutical Industries was trading in green ahead of the board meeting to consider proposal for buy back of equity shares of the company. MTNL was trading in green after the company stated that it would submit its revival plan to the Department of Telecommunications (DoT) by August this year.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,200 and 26,800 levels respectively. The market breadth on BSE was negative in the ratio of 957:1464 while 178 scrips remained unchanged.

The BSE Sensex is currently trading at 26836.44, up by 70.79 points or 0.26% after trading in a range of 26736.52 and 26854.35. There were 16 stocks advancing against 14 stocks declining on the index.

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

The gaining sectoral indices on the BSE were Bankex up by 0.70%, Auto up by 0.50%, FMCG up by 0.41%, Oil & Gas up by 0.10% and Metal up by 0.05% while, Realty down by 1.22%, Power down by 1.11%, TECK down by 0.35%, IT down by 0.31% and Capital Goods down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.97%, Sun Pharma up by 1.64%, Dr. Reddy’s Lab up by 1.54%, SBI up by 1.53% and Lupin up by 1.36%.

On the flip side, NTPC down by 2.92%, Cipla down by 1.45%, TCS down by 1.15%, Power Grid down by 1.06% and ONGC down by 0.89% were the top losers.

Meanwhile, the government after revising the double taxation avoidance agreement with Mauritius, has approved the signing of a Protocol amending the Agreement between India and Belgium for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.

The amendment in the protocol is expected to broaden the scope of the existing framework of exchange of tax related information between the two countries, which will help curb tax evasion and tax avoidance. Furthermore, the protocol will also revise the existing treaty provisions on mutual assistance in collection of taxes.

In the year 1997, the tax treaty was signed between Indian and Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The Agreement is applied to all taxes imposed on total income or on elements of income including taxes on gains from the sale, exchange or transfer of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises. The government is in the process of amending pacts with Singapore and other nations too check tax treaty abuses.

The CNX Nifty is currently trading at 8219.15, up by 15.45 points or 0.19% after trading in a range of 8188.30 and 8224.75. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.48%, Ambuja Cement up by 2.45%, Tata Motors up by 1.95%, Lupin up by 1.64% and Sun Pharma up by 1.59%.

On the flip side, Bharti Infratel down by 3.89%, NTPC down by 3.01%, Tata Power down by 1.70%, TCS down by 1.28% and Cipla down by 1.23% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 39.57 points or 0.45% to 8,676.68, Jakarta Composite decreased 31.98 points or 0.65% to 4,864.87, Shanghai Composite decreased 13.59 points or 0.47% to 2,891.96 and KOSPI Index decreased 5.87 points or 0.29% to 1,986.71.

On the other hand, FTSE Bursa Malaysia KLCI increased 1.51 points or 0.09% to 1,639.20, Hang Seng increased 73.22 points or 0.35% to 20,868.34 and Nikkei 225 increased 172.63 points or 1.07% to 16,238.35.

The European markets were trading in green; UK’s FTSE 100 increased 44.79 points or 0.72% to 6,305.98, France’s CAC increased 45.17 points or 1.03% to 4,425.20 and Germany’s DAX increased 93.12 points or 0.92% to 10,164.18.