Benchmarks continue to trade at high point of day

Indian equity benchmarks continued to extend their gains in late afternoon session on the back of healthy buying in Power, Capital Goods and Auto counters. Sentiments remained positive with SBI’s research report Ecowrap, which said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetisation. Some support also came with the report that the government is likely to set fiscal deficit target in the range of 3.3-3.4 percent of GDP for the financial year 2017-18 in the upcoming Budget or will target a fiscal deficit of 3.5 percent of GDP -- same as that of 2016-17. However, investors remained cautious with credit rating agency Care’s report that upcoming budget is expected to come up with some major changes to the tax framework for individuals and corporate following the demonetisation measure. Meanwhile, a high-level committee the government had set up to review fiscal responsibility rules recommended a framework to allow greater fiscal space for the government to spend more on development.

On the global front, European markets were trading in green as investors wait for fresh economic data and earnings reports. Asian markets were trading mostly in green. Back home, in scrip specific development, Lupin was trading in green after the company launched its Norgestimate and Ethinyl Estradiol Tablets USP, 0.25 mg/0.035 mg having received approval from the United States Food and Drug Administration (USFDA) earlier to market a generic version of Janssen Pharmaceuticals, Inc.’s Ortho-Cyclen 28 Tablets (Norgestimate/Ethinyl Estradiol).

The BSE Sensex is currently trading at 27310.13, up by 192.79 points or 0.71% after trading in a range of 27140.85 and 27315.48. 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 0.49%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Power up by 1.36%, Capital Goods up by 1.18%, Auto up by 1.15%, PSU up by 1.11% and Oil & Gas up by 1.07%, while IT down by 0.34%, TECK down by 0.20% and FMCG down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.97%, NTPC up by 1.94%, Adani Ports & Special economic zone up by 1.87%, Larsen & Toubro up by 1.87% and Coal India up by 1.81%. On the flip side, Hindustan Unilever down by 1.42%, Bharti Airtel down by 1.00%, Infosys down by 0.85%, ITC down by 0.23% and Cipla down by 0.20% were the top losers.

Meanwhile, the credit rating agency, Care in its latest report has said that the union budget which will be presented on February 1, 2017 is expected to come up with some major changes to the tax framework for individuals and corporates following the demonetisation measure. The agency added that upcoming budget would be addressing issues with respect to additional revenue garnered on account of the income disclosure scheme as part of the demonetisation drive and expenditure allocations based on the assessment of the economy as there appears to be a slowdown in growth post demonetisation.

In its report, Care expects that corporate tax will be reduced besides, the tax exemption slab for individuals could be raised from Rs 2.5 lakh to Rs 3 lakh and indirect tax structure will be largely on lines with the agreed principles of GST (Goods and Services Tax), which looks likely to be implemented from July 1, 2017. Moreover, report estimates that the government might levy tax between 12 per cent and 18 per cent on services, depending on its classification based on essential and non-essential services as a move towards the final GST rate.

On capital gains, the report has said that the tax rate for short-term capital gains could be increased to 17.5 per cent from 15 per cent after Prime Minister Narendra Modi’s recent statement with respect to gains from financial markets to be used for nation building. The report noted that Long term capital gains on equity are also on the cards to be bought on par with debt with a three year lock in period.

The CNX Nifty is currently trading at 8454.80, up by 63.30 points or 0.75% after trading in a range of 8398.15 and 8454.95. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.96%, Idea Cellular up by 2.52%, Tata Power up by 2.45%, Ultratech Cement up by 2.29% and Aurobindo Pharma up by 2.09%. On the flip side, Yes Bank down by 2.04%, Hindustan Unilever down by 1.50%, HCL Tech down by 1.31%, Bharti Airtel down by 1.03% and Infosys down by 1.02% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 5.78 points or 0.18% to 3,142.55, FTSE Bursa Malaysia KLCI increased 6.37 points or 0.38% to 1,677.68, Taiwan Weighted increased 23.9 points or 0.25% to 9,447.95, Jakarta Composite increased 41.61 points or 0.79% to 5,292.58 and Hang Seng increased 51.34 points or 0.22% to 22,949.86. On the flip side, Nikkei 225 decreased 103.04 points or 0.55% to 18,787.99 and KOSPI Index decreased 0.23 points or 0.01% to 2,065.76.

All European markets were trading in green; UK’s FTSE 100 increased 3 points or 0.04% to 7,154.18, France’s CAC increased 6.24 points or 0.13% to 4,827.65 and Germany’s DAX increased 10.62 points or 0.09% to 11,556.37.