Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Tuesday as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. Sentiments remained up-beat with FM Arun Jaitley’s hint of a lower tax regime; he said that India has been guided by the principle that a lower level of taxation is the key to building a globally competitive economy in the past two and a half decades since liberalization. However, gains remained capped as traders remained concerned with global rating agency CARE Ratings reporting that the overall employment in the country grew by just 1.6 per cent in FY16, though it marked a recovery compared to FY 2015.

On the global front, Asian stocks were trading flat, in thin trade and with little to guide them as most major markets were closed on Monday for Christmas holidays, while the dollar reclaimed some of its losses from Monday. Back home, traders eying the meeting of Prime Minister Narendra Modi with economists and senior government officials at NITI Aayog. The theme of the meeting is 'Economic Policy Reform, Road Ahead' and it will be the first such meeting after the central government's announcement of demonetisation on November 8. On the sectoral front, stocks related to banking and financial counters remained in focus, as the Reserve Bank of India has given an additional 60 days to farmers hit by demonetisation to repay their crop loans due in November-December and said that prompt repayment would be eligible for the extra 3 per cent interest subsidy.

The BSE Sensex is currently trading at 25868.74, up by 61.64 points or 0.24% after trading in a range of 25803.19 and 25898.35. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.05%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.74%, Oil & Gas up by 0.64%, IT up by 0.44%, TECK up by 0.32% and PSU was up by 0.10%, while Realty down by 1.80%, Metal down by 0.28%, Power down by 0.16%, Capital Goods was down by 0.03% and Auto down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.00%, Adani Ports &Special up by 1.29%, Sun Pharma up by 1.14%, Lupin up by 1.06% and Dr. Reddys Lab was up by 0.86%. On the flip side, GAIL India down by 1.45%, Hero MotoCorp down by 1.08%, Bharti Airtel down by 1.05%, Bajaj Auto down by 0.63% and Power Grid was down by 0.59% were the top losers.

Meanwhile, hinting at lower taxes in the coming years, Finance Minister Arun Jaitley has said that India now needs to move to a lower level of taxation to provide services more competitive in nature, as competition is not domestic, it is global. He added that this is one important change you will witness while you will be in service. He also said that extraordinary high taxation rates in the past have led to higher tax aversions.

Jaitley highlighted that the authorities need to be fair in interpreting the tax laws as the country needs to move to a tax-friendly environment. He added that tax authorities are judged by the quality of what they write or what they decide. Level of fairness followed by tax authorities will define the quality of interpretation of tax laws by tax authorities. Voluntary compliance by citizens by payment of due taxes, needs to be reciprocated by tax authorities by a tax-friendly administration.

Minister also said that payment of taxes is the basis of development of an economy. He added that in many economies while they develop, payment of taxes is part of citizens' duty, and non-payment is visited with severe consequences. Further, he foresees India in next future decades will be an India where voluntary compliances will have to increase.

The CNX Nifty is currently trading at 7,923.50, up by 15.25 points or 0.19% after trading in a range of 7,903.70 and 7935.60. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.96%, Aurobindo Pharma up by 1.26%, Sun Pharma up by 1.25%, Tata Motors - DVR up by 1.23% and Lupin was up by 1.13%. On the flip side, Hindalco down by 1.39%, Grasim Industries down by 1.14%, Bharti Airtel down by 1.01%, GAIL India down by 0.96% and Idea Cellular was down by 0.94% were the top losers.

Asian markets were exhibiting mixed trend; Taiwan Weighted slipped 4.39 points or 0.05% to 9,106.15 and FTSE Bursa Malaysia KLCI was down by 0.24 points or 0.01% to 1,616.91. On the flip side, KOSPI Index increased 4.2 points or 0.21% to 2,041.95 and Jakarta Composite was up by 45.94 points or 0.91% to 5,073.64.