Key benchmark indices trade with modest gains

Key benchmark indices were trading with small gains in the afternoon trade, on emergence of buying by funds and retail investors. The benchmarks managed to hold their crucial 9,600 (Nifty) and 31,300 (Sensex) mark. The sentiments remained optimistic with India, pitching for a greater engagement with BRICS (Brazil, Russia, India, China and South Africa) nations on issues the international community addressed during BRICS Foreign Ministers meeting in Beijing. Some support also came with Fitch Ratings’ latest report indicating that India's economic growth is expected to rise by 7.4% and 7.6% in the next two fiscal years. The rating agency added that the investment in India is also expected to witness gradual rise owing to transmission of supportive monetary policy along with the government’s various structural reforms. On the sectoral front, Airline stocks such as Jet Airways and SpiceJet gained after the traffic data showed passengers carried by domestic airlines rose 17.36% to 1.01 crore in May 2017 over May 2016.

On the global front, Asian markets were trading mixed, as markets awaited MSCI's decision on the potential inclusion of mainland Chinese stocks, even as the dollar strengthened. Back home, the BSE Sensex is currently trading at 31334.58, up by 23.01 points or 0.07% after trading in a range of 31318.87 and 31392.53. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index up by 0.46%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.19%, Oil & Gas up by 0.75%, Industrials up by 0.71%, Energy up by 0.63% and IT up by 0.61% while Realty down by 0.23% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 2.93%, Tata Motors - DVR up by 1.62%, Infosys up by 1.36%, ONGC up by 0.99% and Tata Steel up by 0.73%. On the flip side, Lupin down by 1.75%, HDFC down by 1.06%, Bajaj Auto down by 0.71%, Hero MotoCorp down by 0.61% and Axis Bank down by 0.60% were the top losers.

Meanwhile, operationalising the provisions of secondary adjustment in the arena of transfer pricing for actual allocation of profits between a company and its arm, the Central Board of Direct Taxes (CBDT) has notified Rule 10CB.  In order to give effect to the secondary adjustment norms, the Finance Act 2017 has inserted Section 92CE in the I-T Act, 1961, which is based on the transfer pricing guidelines of the Organization for Economic Cooperation and Development (OECD) for multinational enterprises and tax administrations.

The tax department has notified the time-limit for repatriation of excess money and the rate of interest to be applied for computing the income in case of failure to repatriate the excess money within the prescribed time-limit. The time limit of 90 days for repatriation of excess money shall begin only when the primary adjustments exceeding Rs 1 crore made in respect of Assessment Year 2017-18 or later, attains finality. Where the transfer pricing order is appealed against by the taxpayer, the time limit for repatriation shall commence only after the appeal is finalized by the appellate authority.

Rule 10CB prescribes the time limit for repatriation of excess money and the rate of interest to be applied for computing the income in case of failure to repatriate the excess money within the prescribed time limit. Separate rates of interest have been provided for international transactions denominated in Indian currency and in foreign currency. The rates of interest are applicable on an annual basis.

The CNX Nifty is currently trading at 9666.80, up by 9.25 points or 0.10% after trading in a range of 9655.60 and 9676.50. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 3.59%, Tata Motors up by 2.91%, Tata Motors - DVR up by 1.57%, Indian Oil Corp. up by 1.52% and Infosys up by 1.29%. On the flip side, Lupin down by 1.76%, HDFC down by 1.12%, Axis Bank down by 0.65%, Eicher Motors down by 0.64% and Bank of Baroda down by 0.62% were the top losers.

Asian markets were trading mixed; Jakarta Composite increased 9.65 points or 0.17% to 5,751.56, Taiwan Weighted increased 73.86 points or 0.72% to 10,324.46 and Nikkei 225 increased 162.66 points or 0.81% to 20,230.41. On the flip side, Hang Seng decreased 73.12 points or 0.28% to 25,851.43, Shanghai Composite decreased 8.15 points or 0.26% to 3,136.23 and FTSE Bursa Malaysia KLCI decreased 6.57 points or 0.37% to 1,782.33.