Indian benchmarks end flat ahead of IIP numbers

Indian benchmark indices ended the range bound day of trade on a flat note with positive bias as market participants remained cautious ahead of IIP numbers for December, which is scheduled to be released later in the evening today. Sentiments got some support with the report that Government's revenue collection from indirect tax grew by an impressive 23.9% during the April-January period, while that from direct tax rose by 10.79%. Total direct and indirect tax collections at the end of January stood at Rs 12.85 lakh crore, 76% of the Rs 16.99 lakh crore target, according to revised estimate for 2016-17. Besides, better-than-expected earnings by some companies also fuelled the positive sentiment. State Bank of India, the nation’s biggest lender, reported 70.88% jump in its consolidated net profit at Rs 2152.23 crore for the quarter ended December 31, 2016, as compared to Rs 1259.49 crore for the same quarter in the previous year. Also, Edelweiss Financial Services reported 46.87% rise in its consolidated net profit at Rs 155.18 crore for the quarter ended December 31, 2016, as compared to Rs 105.66 crore for the same quarter in the previous year. Meanwhile, Investors around the world turned bullish after US President Donald Trump promised to unveil a major tax announcement to lower the burden on businesses. Some support also came with the Labour Minister Bandaru Dattatreya’s conformation that the government was examining a proposal to let the Employees' Provident Fund Organisation (EPFO) invest 15% of its corpus via exchange-traded funds compared with 10% at present. The issue would be taken up in the next meeting of the Central Board of Trustees (CBT) of the fund. However, gains remained capped as Finance Minister Arun Jaitley warned that economies will become more inefficient and GDP will shrink if protectionist trend emerges in developed economies.

On the global front, Asian markets ended mostly in green on Friday, as investors cheered upbeat Chinese trade data and strong gains on Wall Street after US President Donald Trump promised to unveil a major tax announcement to lower the burden on businesses. Higher crude oil prices also boosted investors’ sentiments. Further, the Japanese market ended higher as the yen weakened against the dollar, lifting shares of exporters. Investors are awaiting the outcome of Japanese Prime Minister Shinzo Abe’s meetings with Trump on Friday and the weekend. Meanwhile, European stocks rose in early trade, gaining ground for a fourth consecutive session, helped by a raft of positive corporate results.

Back home, after getting positive start, the local benchmark indices traded in tight range for most part of the session and ended with moderate gains. The NSE’s 50-share broadly followed index Nifty, added fifteen points to settle above the crucial 8,750 support level, while Bombay Stock Exchange’s Sensitive Index or Sensex gained around five points and ended above the psychological 28,300 mark. Moreover, the broader markets traded in tandem with their larger peers and finished the session on a flat note. On the BSE sectoral space, the IT counter remained the top gainer in the space with over two percent gains followed by the beaten down Technology pocket which surged close to two percent. On the flipside, Oil & Gas counter languished at the bottom of the table with cuts of over half a percent while FMCG, Auto and PSU sectors settled with moderate cuts of around half a percent. The market breadth remained pessimistic, as there were 1321 shares on the gaining side against 1539 shares on the losing side, while 158 shares remained unchanged.

Finally, the BSE Sensex gained 4.55 points or 0.02% to 28334.25, while the CNX Nifty was up by 15.15 points or 0.17% to 8,793.55. 

The BSE Sensex touched a high and a low of 28456.18 and 28286.80, respectively and there were 16 stocks on gainers side as against 14 stocks on the losers side on the index.

The broader indices ended mixed; the BSE Mid cap index declined 0.28%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were IT up by 2.06%, TECK up by 1.61%, Capital Goods up by 0.42%, Bankex up by 0.24% and Power up by 0.12%, while Oil & Gas down by 0.69%, FMCG down by 0.62%, Auto down by 0.47%, PSU down by 0.35% and Metal down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.12%, Adani Ports & Special economic zone up by 2.23%, Infosys up by 2.10%, Tata Steel up by 1.71% and NTPC up by 1.22%. On the flip side, Lupin down by 2.06%, ITC down by 1.57%, GAIL India down by 1.53%, Dr. Reddy’s Lab down by 1.50% and Cipla down by 1.30% were the top losers.

Meanwhile, Economic Affairs Secretary Shaktikanta Das has clarified that the government has not taken any decision on levying a Banking Cash Transaction Tax (BCTT) on cash deals of Rs 50,000 and above, as suggested by the high-powered Chief Ministers’ panel recently. He said that government will examine the report very carefully and take appropriate decision.

The Andhra Pradesh Chief Minister Chandrababu Naidu-headed committee on digitisation had in its report last month recommended a cap on cash in all types of big-ticket transactions and a levy on cash deals beyond Rs 50,000 as it sought to discourage the use of physical currency. Apart from taxing cash transactions, the panel had said the government should abolish banks' interest on credit card transactions, give tax refund to consumers on digital payments and extend Rs 1,000 subsidy on smartphones to income-tax non-payees to promote a less-cash digital economy.

Talking on tax rates, Das stated that the government has certain fiscal constraints and reduction in corporate tax rates overnight will be difficult for the government because fiscal cost will be very high and government will not be able to do justice to various other sectors of the economy. Noting corporate tax reduction can be done in phrases he also said that it is dependent on the financial affordability of the government without compromising the spending requirements in various critical sectors like infrastructure.

The CNX Nifty traded in a range of 8,822.10 and 8,771.20. There were 26 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were Grasim Industries up by 4.13%, Tech Mahindra up by 3.06%, TCS up by 2.83%, Infosys up by 2.22% and Adani Ports and Special Economic Zone up by 2.20%. On the flip side, Aurobindo Pharma down by 4.06%, BPCL down by 1.77%, Lupin down by 1.67%, Dr. Reddy’s Lab down by 1.56% and Gail down by 1.50% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 23.87 points or 0.33% to 7,253.37, Germany’s DAX increased 36.63 points or 0.31% to 11,679.49 and France’s CAC increased 2.95 points or 0.06% to 4,829.19.

Asian equity markets ended mostly higher on Friday, supported by Wall Street's gains overnight after US President Donald Trump promised a ‘phenomenal’ tax plan to lower the burden on American businesses. Trump also issued belated well-wishes to China for the Lunar New Year and sought to work with President Xi Jinping to ‘develop a constructive relationship’ that benefits both countries, the White House said in a statement, potentially alleviating concerns about a major shift in Washington's relations with Beijing. While Trump's promise to announce ‘something phenomenal on taxes in the next 2 to 3 weeks’ lifted the dollar to a 1-1/2-week high versus the Japanese yen, gold extended overnight losses and Treasuries retreated for a second day. Japanese shares rallied as the yen weakened against the dollar ahead of Prime Minister Shinzo Abe's meeting with Trump. Reports suggest that Abe will put forward an economic co-operation package including a $150 billion five-part investment package in US infrastructure when they meet later today. Further, Chinese shares ended higher as investors cheered trade data and Russian President Vladimir Putin confirmed his readiness to take part in the 'One Belt, One Road' summit in Beijing in May this year. China's January exports rose an annual 7.9 percent in dollar terms on stronger global demand, rebounding from the previous month's contraction, while imports rose by 16.7 percent, preliminary data showed.