Benchmarks trade flat in late morning session

Indian equity benchmarks continued their lackluster trade in the late morning session in absence of any positive triggers. The street ignored RBI announcement of much awaited big bang reforms in India’s corporate bond market, giving direct access to foreign investors in the debt-trading platform. The India Meteorological Department (IMD) in its monsoon update issued yesterday, August 25, 2016 highlighted that for the country as a whole, cumulative rainfall during this year’s monsoon so far (till 24 August 2016) was 2% below the long period average (LPA). Investors maintained a cautious approach ahead of a highly-anticipated speech today by Janet Yellen of the US Federal Reserve in an annual meeting of central bankers from around the world in Jackson Hole, Wyoming. Traders were seen piling position in Consumer Durables, Auto and Oil & Gas stocks, while selling was witnessed in Realty, Capital Goods and Bankex sector stocks. In scrip specific development, Biocon was trading in green after touching fresh record high after the company announced Mylan’s application to market biosimilar Trastuzumab has been accepted by the European Medicines Agency (EMA) for review. This is the second biosimilar submission developed by the partnership that has been accepted for review in Europe.

On the global front, Asian stocks were trading steady, reflecting nervousness before a keenly anticipated speech. Japan’s core consumer prices fell for a fifth straight month and marked the biggest annual drop in more than three years in July as more firms held back price hikes due to weak consumption, keeping the central bank under pressure to expand an already massive stimulus program.  Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,550 and 27,800 levels respectively. The market breadth on BSE was negative in the ratio of 9392:1135, while 119 scrips remained unchanged.

The BSE Sensex is currently trading at 27838.80, up by 2.89 points or 0.01% after trading in a range of 27793.22 and 27935.88. There were 12 stocks advancing against 16 stocks declining, while 2 stocks remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.11%, while Small cap index was down by 0.05%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.80%, Auto up by 0.64%, Oil & Gas up by 0.39%, TECK up by 0.08% and IT up by 0.08%, while Realty down by 0.90%, Capital Goods down by 0.79%, Bankex down by 0.62%, Power down by 0.29% and PSU down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.62%, GAIL India up by 1.03%, Cipla up by 0.97%, Mahindra & Mahindra up by 0.75% and Reliance Industries up by 0.65%.

On the flip side, Larsen & Toubro down by 1.19%, Wipro down by 1.11%, Adani Ports & Special Economic Zone down by 1.03%, Asian Paints down by 1.02% and SBI down by 0.74% were the top losers.

Meanwhile, in order to keep nation's tax laws updated with the changing economic scenario, the income-tax department has asked its officers to provide suggestions for legislative changes in the direct tax laws. The department wants to keep pace with the changing economic scenario that has brought to fore a host of complex tax issues.

Changes in the laws pertaining to direct tax, which covers income tax for individuals and corporates, are done in the Union Budget presented by the finance minister in end February every year. The Income Tax Department has created a permanent mechanism for seeking inputs from its officers for changes required in the direct tax regulations, it has created an exclusive email ID for receiving suggestions for legislative changes relating to direct taxes and officers have been instructed to provide inputs through the year without waiting for beginning of the annual budget exercise.

The department has also asked the officers to bring to the notice of the department the changes needed in the legislation to address particular issues. The officers have to give justification for their suggestions for legislative changes in direct tax laws along with the details of relevant judicial rulings.

The CNX Nifty is currently trading at 8587.35, down by 4.85 points or 0.06% after trading in a range of 8573.30 and 8622.95. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.21%, Tata Motors up by 1.61%, Hindalco up by 1.30%, Tata Motors - DVR up by 1.30% and GAIL India up by 1.05%.

On the flip side, Indusind Bank down by 1.79%, Yes Bank down by 1.37%, Idea Cellular down by 1.31%, Bank of Baroda down by 1.27% and Larsen & Toubro down by 1.04% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.61 points or 0.1% to 1,681.91, Taiwan Weighted increased 4.28 points or 0.05% to 9,119.75, Shanghai Composite increased 14.99 points or 0.49% to 3,083.32 and Hang Seng increased 114.15 points or 0.5% to 22,929.10.

On the other hand, Nikkei 225 decreased 87.11 points or 0.53% to 16,468.84, Jakarta Composite decreased 18.24 points or 0.33% to 5,435.87 and KOSPI Index decreased 5.5 points or 0.27% to 2,037.42.