Indian markets trade flat with negative bias in range-bound session of trade

In the extremely range-bound session of trade, Indian benchmarks altering between positive and negative territory, were now trading flat with bit of negative bias, as market participants awaited outcome of two-day monetary policy committee meeting later today. Falling inflation and the government’s fiscal prudence in Budget might propel the Reserve Bank of India (RBI) to cut the key repo or lending rate today. Besides, weakness in other Asian markets also weighed on the sentiments. Investors got some comfort with a private report stating that the global economic order is expected to shift from advanced to emerging economies over the next few decades and by 2040 India could edge past the US to become the world's second largest economy in purchasing power parity (PPP) terms. Some support also came in from reports that Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 201.13 crore on February 07, 2017.

On the global front, Asian markets were trading mostly lower on Wednesday on lingering political and economic uncertainty in the United States and Europe, which sapped investors’ confidence. The political situation in France with the potential for a ‘Frexit’ as well as uncertainty about President Donald Trump's policies weighed on investors’ sentiments. However, Japanese market edged higher, despite stocks tracking the volatile currency market, while the glass-manufacturing sector outperformed on brisk earnings results. 

Back home, stocks from Consumer Durables, Metal and Auto counters were supporting the markets’ uptrend, while those from FMCG, Banking and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Gati declined after the company reported 35.07% fall in its consolidated net profit at Rs 4.98 crore for the quarter ended December 31, 2016, as compared to Rs 7.67 crore for the same quarter in the previous year. On the other hand, Mangalore Refinery and Petrochemicals (MRPL) gained after the company reported 92.17% rise in its net profit at Rs 565.99 crore for third quarter ended December 31, 2016, as compared to Rs 294.53 crore for the same quarter in the previous year.

The market breadth remained optimistic, as there were 1458 shares on the gaining side against 1090 shares on the losing side, while 125 shares remained unchanged.

The BSE Sensex is currently trading at 28297.03, down by 38.13 points or 0.13% after trading in a range of 28297.00 and 28391.64. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.27%, while Small cap index up by 0.22%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.82%, Metal up by 0.84%, Auto up by 0.72%, Oil & Gas up by 0.40% and Realty up by 0.36%, while FMCG down by 0.50%, Bankex down by 0.21%, Capital Goods down by 0.08% and IT down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.39%, Mahindra & Mahindra up by 1.37%, TCS up by 1.26%, Wipro up by 1.05% and Tata Motors up by 1.03%. On the flip side, Axis Bank down by 1.36%, Bharti Airtel down by 1.24%, Dr. Reddy’s Lab down by 1.21%, ITC down by 1.10% and Infosys down by 0.99% were the top losers.

Meanwhile, Central Board of Direct Taxes (CBDT) has signed four additional unilateral advance pricing agreements (APAs) with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing. The four APAs signed pertain to diverse sectors that is manufacturing, financial and information technology sectors of the economy.

The international transactions covered in these agreements include contract manufacturing, IT-enabled services and software development services. With this, the total number of APAs entered into by the CBDT has reached 130 which includes eight bilateral APAs and 122 unilateral APAs. A total of 66 APAs (5 bilateral APAs and 61 unilateral APAs) have already been entered into, in the current financial year. The tax department expects more APAs to be concluded and signed before the end of the current fiscal.

Meanwhile, the APA scheme was introduced in the Income-tax Act in 2012 and the rollback provisions were introduced in 2014. The scheme aims to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the prices of international transactions in advance. 

The CNX Nifty is currently trading at 8765.80, down by 2.50 points or 0.03% after trading in a range of 8765.25 and 8782.85. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were ACC up by 2.49%, Grasim Industries up by 2.16%, Ambuja Cement up by 2.13%, Bharti Infratel up by 1.71% and Zee Entertainment Enterprises up by 1.61%. On the flip side, Axis Bank down by 1.49%, Bharti Airtel down by 1.49%, Dr. Reddy’s Lab down by 1.31%, ITC down by 1.12% and Infosys down by 0.77% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite decreased 0.58%, Hang Seng slipped 0.46%, KOSPI Index declined 0.56%, Taiwan Weighted shed 0.12% and FTSE Bursa Malaysia KLCI was down by 0.07%.

On the flip side, Shanghai Composite edged higher 0.08% and Nikkei 225 was up by 0.43%.