Benchmarks make soft start of F&O expiry session

Indian equity benchmarks have started the F&O expiry session on soft note with frontline gauges trading with a cut of around quarter a percent, breaching their crucial 30,100 (Sensex) and 9,350 (Nifty) levels. Sentiments remained dampened after Finance Minister Arun Jaitley expressed concern over the worrying signs of economic protectionism and has said the continued unpredictability in ties between major powers has brought new uncertainties to the fore. However, losses remained capped with Finance Minister Arun Jaitley asserting that the government was giving top priority to addressing the issue of bad loans while acknowledging that the problem of non-performing assets was ‘adversely impacting’ the Indian banking system.

Global cues too dampened sentiments with all the Asian counters trading in red at this point of time, as investors assessed a plan to overhaul U.S. taxes, while awaiting policy decisions from the Bank of Japan and the European Central Bank. The US markets made a marginally lower closing in the last session, the major averages pulled back going into the close, ending the session just below the unchanged line.

Back home, banking stocks remained under pressure, with Axis Bank’s numbers, the third-largest private sector lender, on Wednesday after the market hours reported a 43% year-on-year (y-o-y) decline in its net profit for the quarter ended March to Rs 1,225.1 crore, as provisions jumped 121% over the previous year to Rs 2,581.25 crore. The market breadth indicating the overall health of the market was weak, with 992 shares gaining and 1,092 shares declining, while a total of 91 shares were unchanged.

The BSE Sensex is currently trading at 30061.56, down by 71.79 points or 0.24% after trading in a range of 30060.79 and 30184.22. There were 11 stocks advancing against 19 stocks declining on the index.

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

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.80%, IT up by 0.52%, TECK up by 0.41%, Auto up by 0.28% and Industrials up by 0.15%, while Metal down by 0.51%, Telecom down by 0.45%, Realty down by 0.33%, Energy down by 0.31% and Basic Materials was down by 0.28% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.39%, Hero MotoCorp up by 0.95%, Infosys up by 0.76%, Cipla up by 0.75% and Power Grid up by 0.63%. On the flip side, Lupin down by 1.69%, Axis Bank down by 1.41%, ICICI Bank down by 1.05%, Asian Paints down by 0.91% and Bharti Airtel down by 0.91% were the top losers.

Meanwhile, dismissing the suggestion of NITI Aayog member Bibek Debroy, the Finance Minister Arun Jaitley has said that the government does not plan to impose any tax on agricultural income. He clarified that according to the constitutional allocation of powers, the central government has no jurisdiction to impose tax on agricultural income.

Jaitley said, ‘I have read the paragraph in Niti Ayog Report entitled 'Income tax on agriculture income'. To obviate any confusion on the subject, I categorically state that the Central Government has no plan to impose any tax on agriculture income. As per the Constitutional Allocation of Powers, the Central Government has no jurisdiction to impose tax on agricultural income.’

The NITI Aayog member Bibek Debroy had said that taxes should be imposed on agricultural income above a certain threshold in order to expand the tax base. He also added that on expanding the base on the personal income tax side, other than elimination of exemptions, is to also tax rural sector, including agriculture income above certain threshold.

Meanwhile, the NITI Aayog has said that Debroy’s suggestion is neither the view of the Aayog nor is such a recommendation made anywhere in the Draft Action Agenda document as circulated to the Governing Council at the meeting on April 23, 2017. NITI Aayog noted that the views on taxing farm income expressed by Member Bibek Debroy were personal and not those of the Aayog.

The CNX Nifty is currently trading at 9335.00, down by 16.85 points or 0.18% after trading in a range of 9334.80 and 9363.40. There were 20 stocks advancing against 30 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Motors up by 1.30%, Tata Motors - DVR up by 1.20%, Kotak Mahindra Bank up by 1.18%, HCL Tech up by 1.02% and Hero MotoCorp up by 0.97%. On the flip side, Lupin down by 1.68%, Axis Bank down by 1.38%, Hindalco down by 1.37%, Grasim Industries down by 1.10% and ICICI Bank down by 1.07% were the top losers.

All Asian markets were trading in red; Nikkei 225 slipped 27.56 points or 0.14% to 19,261.87, Jakarta Composite dropped 25.14 points or 0.44% to 5,701.39, Taiwan Weighted shed 18.14 points or 0.18% to 9,838.31, Shanghai Composite fell 12.43 points or 0.4% to 3,128.42, Hang Seng dipped 3.42 points or 0.01% to 24,575.01, KOSPI Index decreased 2.12 points or 0.1% to 2,205.72 and FTSE Bursa Malaysia KLCI was down by 1.48 points or 0.08% to 1,767.44.