Post session - Quick review

Halting four day’s losing streak, barometer gauges showcased sharp reversal of trend in the latter half of the session, to conclude near the high point of the day. Smart recuperation was witnessed in the high volume session trade, which witnessed volume turnover over 1.05 lac crore, after Finance Minister Pranab Mukherjee announced that the implementation of General Anti-Avoidance Rules (GAAR) would be deferred to April 2013, taking the benchmarks out of the woods. 

Widely followed 50 share index, Nifty, after breaching its long term support of 200 day moving average in the previous session, declined further to slip below the 5000 crucial bastion, a level not seen since January 19,2012. However, the recovery that emerged into the late hours of trade pushed the benchmark above the crucial 5100 mark.  The 30 scrip sensitive index of Bombay Stock Exchange (BSE)’s Sensex gathering over 75 points, just shied away from its 17000 crucial level. The broader indices too gained significant traction.

Risk appetite revisited Dalal Street, as Finance minister also stated that government would not use retro amendments on cases where assessment has been done, another positive thing for overseas companies investing in India.

Earlier, staggering along with regional counterparts, local benchmark equity indices participated into global glut after apparent failure of two pro-bailout ruling parties in Greece to win a majority in the parliament, fuelled questions about commitments from struggling euro zone economies to pursue austerity measures. The fears over the future of Europe's fiscal austerity policies sparked a flight to safety across the world's major markets, lifting German government bond futures to a record high of 142.40 in early trade. However, the scenario at global front, continued to remain bleak as after sluggish close of Asian indices, European equities slumping to 4-1/2 month lows reflected investor’s deep public discontent over austerity measures.

Back home, Capital Goods, Power and Metal space were among the prominent gainers on BSE sectoral front, Capital Goods pivotal rallied over massive 3% after State-owned BHEL rose over 5%. Meanwhile, Larsen & Toubro too gained 3.5% on the back of value buying interest.  BHEL stocks, after falling to 52 weeks low level, gained significant traction on short covering. Recovery of banking stocks too aided the bulls to bounce back.

Additionally, Jewelers, like Titan Industries, Gitanjali Gems and Thangamayil Jewellery heaved a sigh of relief as finance minister Pranab Mukherjee decided to withdraw the new excise duty proposals on the sector. The Finance Ministry had levied an excise duty of one per cent on branded precious metal jewellery in the Budget this year.

On the result front, shares of housing finance company HDFC rose 0.5% after the company reported a better than expected growth of 16.37% year-on-year in its profit after tax of Rs 1,329 crore for the fourth quarter of FY12. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1464:1255 while 127 scrips remained unchanged. (Provisional)

The BSE Sensex gained 102.68 points or 0.61% and settled at 16,933.76. The index touched a high and a low of 16,944.13 and 16,513.77 respectively. 19 stocks advanced against 11 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.68% while Small-cap index was up 0.53%. (Provisional)

On the BSE Sectoral front, Capital Goods up 3.62%, Consumer Durables up 1.99%, Power up 1.89%, Metal up 1.87% and Auto up 1.64% were the top gainers while FMCG was down 0.59%, Oil & Gas down 0.54%, IT down 0.35% and Health Care down 0.17% were the only losers.

There top gainers on the Sensex were BHEL up 5.46%, DLF up 4.67%, Jindal Steel up 4.59%, L&T up 4.53% and Maruti Suzuki up 3.35% while, RIL down 1.58%, Wipro down 0.94%, HUL down 0.92%, Coal India down 0.67% and Infosys down 0.66% were the top losers in the index. (Provisional)

Meanwhile, General Anti-Avoidance Rules (GAAR) has been deferred by a year. According to the Finance Minister Pranab Mukherjee, GAAR provisions will be applicable only from April 2013. Also levy on all precious metals, branded or unbranded has been withdrawn.

The FM, in a statement to the parliament, has stated that GAAR will be applicable only from 2013-14 and that the finance ministry was amending the GAAR provision in the Finance Bill. Mukherjee has also clarified that the burden of proving tax evasion will be with the authorities and not with overseas investors. Further, the retrospective amendments to Income-tax Act will also not override DTAAs with 82 countries.

GAAR is aimed at curbing tax avoidance by structuring a business or carrying out a transaction with the objective of avoiding the tax liability instead of rational commercial considerations. The recent clarifications may spell good news for market investors as most of them have been hoping for a one-year delay for more clarity in guidelines and implementation.

Mukherjee has also stated that there will be no excise duty on purchase of jewellery valued Rs 5 lakh against earlier threshold of Rs 2 lakh. The move is expected to help in reducing the increasing price of the metal.

India VIX, a gauge for market’s short term expectation of volatility lost 4.26% at 20.22 from its previous close of 21.12 on Friday. (Provisional)

The S&P CNX Nifty gain 36.55 points or 0.72% to settle at 5,123.40. The index touched high and low of 5,124.75 and 4,988.00 respectively. 31 stocks advanced against 19 declining ones on the index. (Provisional)

The top gainers on the Nifty were BHEL up 5.75%, BPCL up 5.00%, L&T up 4.61%, DLF up 4.41% and Jindal Steel up 4.29%.On the other hand, Cairn India down 2.39%, JP Associates down 2.25%, HCL Tech down 2.17%, Dr. Reddy’s Lab down 1.81% and RIL down 1.19% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.37% and Germany's DAX down 0.98%. Stock markets in United Kingdom remained shut on Monday owing to Early May Bank Holiday.

Sentiments continued to remain bearish in the Asian region and all the Asian counters ended the day’s trade in the negative terrain on Monday after elections results in Greece and France heightened uncertainty about Europe’s ability to solve its debt crisis. Weekend election outcomes in Greece sent tremors throughout Europe as voters punished the parties responsible for highly unpopular austerity measures instituted to prevent the country from defaulting on its massive debts and exiting the euro currency. No political party won sufficient votes to form a government, raising the possibility of new elections within months and protracted uncertainty for global markets. Moreover, on Friday, weaker-than-expected US jobs data added to global risk aversion, raising concerns that the world's largest economy may be stalling in its path of recovery.

Meanwhile, Seoul shares ended at a three-month low with a cut of over one and a half percent and Japan’s Nikkei average slid nearly 3 percent to its lowest close in three months after elections in Europe stoked worries about efforts to resolve the euro zone debt crisis and US jobs data disappointed. However, China shares closed flat on Monday, with property and financial shares weak after regional markets suffered a bout of selling on fresh worries over the euro zone debt crisis.