Markets make a gap-up start of the new week

Indian markets made a good gap-up start and are trading with decent gains in early morning session, supported by sanguine regional cues and as buying by retail investors and the funds continued unabated. Marketmen were getting encouragement with report from Indian Meteorological Department that Monsoon rains have covered nearly all of India except some parts of the western states of Gujarat and Rajasthan, while the remaining region is likely to be covered this week. The rainfall deficit has reduced to 6 percent, sharply down from 18 percent in the first week of June. Both the major indices were trading near highs of the day and were eyeing their crucial psychological levels of 27400 (Sensex) and 8400 (Nifty). However, there was some cautiousness too with RBI Governor Raghuram Rajan, warning against expecting too much from central banks, stating that it is wrong on their part also to always claim a ‘bazooka’ left up their sleeves.

Fertilizer stocks were under pressure after, the government decided to reduce prices of key fertilisers like Diammonium Phosphate (DAP), Muriate of Potash (MOP) and Nitrogen Phosphate and Potash composition (NPK). Coromandel fertilizers was down by 4.5%, Mangalore Chemical fertilizers was down by 1.5% and Khaitan Chemicals & Fertilizers was down by around 9%.In scrip specific movement, State Bank of India was up by over a percent after it sold 5 percent stake in the national stock exchange for over Rs 900 crore.

The BSE Sensex is currently trading at 27302.27, up by 157.36 points or 0.58% after trading in a range of 27293.53 and 27356.29. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index up by 0.89%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.25%, Capital Goods up by 1.20%, PSU up by 1.15%, Metal up by 1.12%, Realty up by 1.06% while, FMCG down by 0.80% was the lone losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 3.39%, ONGC up by 2.63%, Larsen & Toubro up by 1.59%, SBI up by 1.34% and Reliance Industries up by 1.33%. On the flip side, ITC down by 1.74%, Hindustan Unilever down by 0.62%, Bajaj Auto down by 0.41%, Hero MotoCorp down by 0.26% and Asian Paints down by 0.03% were the top losers.

Meanwhile, close on the heels of Prime Minister Narendra Modi’s call to double the tax base, Finance Minister Arun Jaitley has said that the government’s aim is to keep the taxation rate moderate and efforts will be made to enhance the tax base. He said that “the tax rate would be reasonable while the tax base has to be much larger and the tax department has to start trusting the assessee and the taxpayer'. He said that the investors and taxpayers are going to be taxed on the basis of residence-based principles.

Emphasizing on a need to start trusting the assesses, Jaitley said that in the last few months, procedures have been simplified and the ' assesses have never seen such an easy and friendly approach of the taxation department. He also said that all grey areas are being made clearer when it comes to taxation and the tax department and ease of communicating with tax department is going to continue. Listing out various measures aimed at simplifying the procedures, Jaitley said dispute resolution mechanism has been put in place at the appeals stage with respect to tax matters.

Commenting on Income Declaration Scheme 2016 - which can be availed till September 30 - Jaitley said it provides a good opportunity for anyone to disclose domestic income for which filing has not been made before. Recently Prime Minister Narendra Modi in a meeting with tax authorities raised the issue to double the tax base to 10 crore people from the existing little over 5 crore. Currently, India has three slabs corresponding rates of incomes tax - 10% on income exceeding Rs 2,50,000, 20% on income exceeding Rs 5,00,000, and 30% on income exceeding Rs 10,00,000.

The CNX Nifty is currently trading at 8378.65, up by 50.30 points or 0.60% after trading in a range of 8373.20 and 8388.85. There were 43 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.24%, Tata Motors - DVR up by 3.16%, ONGC up by 2.40%, Aurobindo Pharma up by 1.50% and Larsen & Toubro up by 1.50%. On the flip side, Bosch down by 2.36%, ITC down by 1.74%, Hero MotoCorp down by 0.66%, Indusind Bank down by 0.62% and Hindustan Unilever down by 0.42% were the top losers.

All the Asian markets were trading in green, KOSPI Index gained 7.56 points or 0.38% to 1,994.88, FTSE Bursa Malaysia KLCI was up 8.53 points or 0.52% to 1,654.75, Taiwan Weighted added 17.68 points or 0.2% to 8,755.92, Shanghai Composite increased by 52 points or 1.77% to 2,984.47, Nikkei 225 was higher by 96.27 points or 0.61% to 15,778.75 and Hang Seng surged by 304.43 points or 1.46% to 21,098.80.