Firm trade persists; Sensex gains over 200 points

Key Indian benchmarks continued to trade firm in late morning session, with the Sensex gaining more than 200 points, tracking positive cues from other Asian markets. Sentiments were upbeat as the government's direct tax kitty swelled to Rs 6.95 trillion during the April-January period of the current fiscal, a growth of 19.3 per cent over the year-ago period. Adding some optimism, Finance Minister Arun Jaitley exuded confidence that there will be no more fiscal slippages as the financial position is likely to be comfortable from the next fiscal. Some support also came with Financial Services Secretary Rajiv Kumar’s statement that a slew of recent measures, including tax concessions in the budget, for micro, small and medium enterprises (MSMEs) has been taken with an aim to transform such enterprises worth Rs 6.33 crore into a growth engine for ‘new India’. Besides, rally in the broader markets along with heavy buying in Realty, Healthcare, Industrials and Capital Goods stocks, also added to the gains. The market participants paid no heed towards the capital markets regulator, Securities and Exchange Board of India (SEBI) chief Ajay Tyagi’s statement that the volatility in the Indian equity markets may continue for some time. He explained that the global factors are mainly responsible for the volatility in the Indian markets, and outweighs the concerns related to long-term capital gains tax (LTCG). 

On the global front, Asian markets were trading in green, following the rally on Wall Street and as oil prices rebounded in Asian trades after falling on Friday. Nevertheless, investors braced for volatility amid lingering concerns about the outlook for interest rates. Back home, in scrip specific development, Steel Strips Wheels (SSWL) was trading jubilantly after the company bagged another exports order for supply of Steel wheels for EU Caravan market.

The BSE Sensex is currently trading at 34217.09, up by 211.33 points or 0.62% after trading in a range of 34115.12 and 34278.24. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.43%, while Small cap index was up by 1.66%.

The top gaining sectoral indices on the BSE were Realty up by 2.34%, Healthcare up by 1.74%, Industrials up by 1.51%, Capital Goods up by 1.46% and Basic Materials up by 1.43%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 4.00%, Sun Pharma up by 3.15%, ONGC up by 2.18%, Larsen & Toubro up by 1.58% and Axis Bank up by 1.47%. On the flip side, SBI down by 1.67%, Infosys down by 0.44%, Coal India down by 0.13% and ICICI Bank down by 0.02% were the top losers.

Meanwhile, since the Indian benchmark indices have fallen by over 1% and closed at a one-month low level, the capital markets regulator, Securities and Exchange Board of India (SEBI) chief Ajay Tyagi has said that the volatility in the Indian equity markets may continue for some time. He explained that the global factors are mainly responsible for the volatility in the Indian markets, and outweighs the concerns related to long-term capital gains tax (LTCG). He also said that there are no issues of concern for investors in terms of safety and security of the Indian marketplace.

On the matter of re-introduction of LTCG tax as proposed in the Budget, Tyagi said that SEBI has not received any representation from investors so far against this. He admitted that the tax would impact the market and also said that it will be wrong to say LTCG will have no impact at all on Indian markets, but any such impact would be small and global factors pose bigger risks. About the timing of imposing the LTCG, he said it was an opportune time as markets were booming.

SEBI chief further said that small investors need not panic since they are doing well to invest via Mutual Funds. But, he pointed out that they cannot be as risk-free as bank deposits. He added that the market regulator is also set to come out with norms on corporate bonds to encourage firms to tap this route for fund raising. Besides, Finance Minister Arun Jaitley, on February 1, proposed to tax LTCG on equities exceeding Rs 1 lakh at 10%, which is expected to bring in a revenue of Rs Rs 20,000 crore.

The CNX Nifty is currently trading at 10518.30, up by 63.35 points or 0.61% after trading in a range of 10485.40 and 10538.10. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.84%, Sun Pharma up by 3.26%, ONGC up by 2.32%, Lupin up by 2.15% and Aurobindo Pharma up by 1.98%. On the flip side, BPCL down by 1.97%, HCL Tech down by 1.74%, SBI down by 1.70%, HPCL down by 1.10% and Bharti Infratel down by 0.45% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 12.55 points or 0.69% to 1,832.37, Jakarta Composite increased 15.38 points or 0.24% to 6,520.90, Shanghai Composite increased 22.62 points or 0.72% to 3,152.47, KOSPI Index increased 26.11 points or 1.1% to 2,389.88, Taiwan Weighted increased 49.34 points or 0.48% to 10,421.09 and Hang Seng increased 209.87 points or 0.71% to 29,717.29.

Japan stock exchange is closed on account of National holiday.