Benchmarks trade jubilantly in early deals; Nifty regains 8,700 mark

Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals with frontline gauges recapturing their crucial 28,100 (Sensex) and 8,700 (Nifty) levels. Traders took encouragement with Prime Minister Narendra Modi’s statement that India was the fastest growing economy and that it can play a major role in providing strength to global economy that is facing slowdown. Firm global cues too aided sentiments with most of the Asian counters trading mostly in green at this point of time, led by the Japanese market which is up by over a percent in early deals as the yen weakened against the dollar. The US markets managed a modestly positive close in last session after the oil prices firmed up following the release of a report showing an unexpected drop in weekly crude oil inventories.

Back home, aviation stocks were flying higher on report that domestic airlines flew 82.30 lakh passengers in September this year, registering a growth of 23.46 per cent, over the 66.66 lakh passengers carried during the same period in the previous year. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally.

The market breadth remained in favor of advances, as there were 1,467 shares on the gaining side against 545 shares on the losing side while 108 shares remain unchanged.

The BSE Sensex is currently trading at 28191.01, up by 206.64 points or 0.74% after trading in a range of 28031.57 and 28212.50. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Bankex up by 1.44%, Finance up by 1.25%, Realty up by 1.04%, Telecom up by 0.93% and Metal up by 0.85%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 3.47%, Adani Ports &Special up by 2.54%, HDFC up by 1.48%, SBI up by 1.35% and Axis Bank up by 1.17%. On the flip side, ITC down by 0.19%, Wipro down by 0.18%, Bharti Airtel down by 0.11% and Dr. Reddys Lab down by 0.11% were the top losers.

Meanwhile, the Central Board of Direct Taxes (CBDT) has introduced new rule for computing amount received by a company in respect of issue of share for computing buy back tax payable. This new Rule 44BB is expected to address the issues relating to taxation of buybacks carried out by companies and thereby reduce litigation. The rules take effect from June 1, 2016 and it seeks to remove the limitations created by the restrictive meaning of buy back under the existing provisions.

The final rules provide for computation mechanism of 'amount received' in 12 different scenarios depending upon the manner of issue of shares - regular issue, amalgamation, demerger, bonus issue, conversion of bond or debenture, sweat equity share issue and share-buyback in demat form.

The rules have been finalized based on the stakeholders’ comments received to the draft rules issued by the CBDT in July this year. Previously, the draft rules provided that while determining the issue price of shares where the company had at any time, prior to the buy-back of the share, returned any sum out of the amount received in respect of such share such sum so returned should be reduced. The final rules also prescribe that no such reduction will be warranted if the sum so returned was chargeable to DDT (dividend distribution tax) in the first instance, which was paid by the company. The final rules also cover issuance of equity shares, pursuant to conversion of a firm into company or succession of a sole proprietorship by a company.

The CNX Nifty is currently trading at 8719.10, up by 60.00 points or 0.69% after trading in a range of 8687.75 and 8727.00. There were 45 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 3.67%, ICICI Bank up by 3.49%, Adani Ports & Special up by 2.50%, Bharti Infratel up by 2.43% and HDFC up by 1.58%. On the flip side, HCL Tech down by 0.81%, Wipro down by 0.24%, Aurobindo Pharma down by 0.24%, Dr. Reddys Lab down by 0.08% and ITC down by 0.06% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 1.29 points or 0.08% to 1,669.56, Jakarta Composite gained 6.29 points or 0.12% to 5,415.58, Taiwan Weighted increased 27.78 points or 0.3% to 9,311.77, Hang Seng added 161.47 points or 0.69% to 23,466.44 and Nikkei 225 was up by 202.58 points or 1.19% to 17,201.49. On the flip side, KOSPI Index decreased 3.74 points or 0.18% to 2,037.20 and Shanghai Composite was down by 2.69 points or 0.09% to 3,082.03.