Bourses continue to trade in fine fettle in noon deals

Indian equity benchmarks are trading in fine fettle with a gain of around quarter a percent in noon deals, as sustained foreign funds inflows, better than expected quarterly result in index heavyweight Reliance Industries sustaining the stock momentum. Some support also came with report that foreign portfolio investors (FPIs) bought shares worth Rs 988.25 crore on net basis while domestic institutional investors (DIIs) also bought equities to the tune of Rs 209.86 crore last Friday. Turnaround in Asian counterparts too aided sentiments. However, gains remained capped, as traders remained cautious ahead of quarterly result to be released later in the day, which include key names like Axis Bank and Asian Paints. Moreover, profit-booking witnessed in telecom, metal, utilities and power segments restricted the index gains.

On the global front, most of the Asian regional markets, after a weak start, turned into green, as investors kept an eye on political developments in the US after a government shutdown began last week. Back home in scrip specific development, Oil and Natural Gas Corporation (ONGC) shined after the company received an approval for acquisition of entire 51.11% shareholding (778,845,375 equity shares) of the President of India in Hindustan Petroleum Corporation (HPCL) at a cash purchase consideration of Rs 473.97 per share with a total acquisition cost of Rs 36,915 crore.

The BSE Sensex is currently trading at 35639.87, up by 128.29 points or 0.36% after trading in a range of 35544.68 and 35700.72. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.09%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were Energy up by 2.41%, Realty up by 0.96%, IT up by 0.61%, Oil & Gas up by 0.46% and Industrials was up by 0.44%, while Telecom down by 1.45%, Metal down by 0.82%, Utilities down by 0.63%, PSU down by 0.28% and Power was down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.40%, ONGC up by 3.46%, TCS up by 2.17%, Bajaj Auto up by 1.61% and Kotak Mahindra Bank up by 1.28%. On the flip side, ICICI Bank down by 1.85%, Asian Paints down by 1.61%, Bharti Airtel down by 1.41%, Tata Motors - DVR down by 1.37% and HDFC down by 1.19% were the top losers.

Meanwhile, with a view to boost shipments and job creation, the Commerce Ministry has urged for continuation of tax incentives being enjoyed by units in special economic zones (SEZs) and also asked for removal of minimum alternate tax on SEZs. In the Budget 2016-17, Finance Minister Arun Jaitley had stated that income-tax benefits to new SEZ units would be available to only those units which commence activity before March 31, 2020. The Ministry wants the removal of this sunset clause as it would negatively impact the growth of these zones.

According to industry experts, the clause that indicates the date in advance on which tax incentives will cease to exist is a retrograde step and would impact investments and job creation in these zones. Export Promotion Council for EOUs and SEZs (EPCES) former Chairman Rahul Gupta has said that the sunset clause will impact investments. Projects, which would not be able to get completed by March 2020, may become unviable. So, the government should consider removing this.

Units in SEZs enjoy 100 percent income-tax exemption on export income for the first five years, 50 percent for the next five years thereafter and 50 per cent of the ploughed back export profit for another five years. SEZs, which emerged as major export hubs in the country, started losing their sheen after the imposition of minimum alternate tax and introduction of sunset clause. Besides, during April-September 2017-18, exports from these zones grew 13 percent to about Rs 2.67 lakh crore.

The CNX Nifty is currently trading at 10917.15, up by 22.45 points or 0.21% after trading in a range of 10881.40 and 10929.85. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 4.26%, ONGC up by 3.43%, Indiabulls Housing Finance up by 2.27%, TCS up by 2.05% and UPL up by 1.91%. On the flip side, HPCL down by 3.11%, GAIL India down by 3.10%, BPCL down by 1.84%, ICICI Bank down by 1.84% and Vedanta down by 1.52% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 rose 8.27 points or 0.03% to 23,816.33, Shanghai Composite gained 13.5 points or 0.39% to 3,501.36, Jakarta Composite increased 22.93 points or 0.35% to 6,513.83, Taiwan Weighted gained 80.61 points or 0.72% to 11,231.46 and Hang Seng was up by 144.02 points or 0.45% to 32,398.91. On the flip side, KOSPI Index decreased 18.15 points or 0.72% to 2,502.11 and FTSE Bursa Malaysia KLCI was down by 0.1 points or 0.01% to 1,828.73.