Sensex, Nifty remains under selling pressure

Indian equity markets continued their downward journey after a modest recovery and currently trading notably lower amid alternate bouts of buying and selling. Investors were trading cautiously on the back of weak Asian markets and likely drop in quarterly earnings. In currency markets, rupee erased early losses and currently trading with moderate gains against American currency on dollar selling by banks. On sectoral front consumer durables, information technology and banking sectors remained higher, while automobile, realty, FMCG and oil stocks were mostly trading lower. On the global front, Asian shares were trading mixed, while European markets are expected to open lower as lackluster updates from several US companies cast a shadow on the upcoming earnings season. Back home, the market breadth favoring positive trend; there were 1,226 shares on the gaining side against 1,158 shares on the losing side while 126 shares remained unchanged.

The BSE Sensex is currently trading at 17,547.27 down by 71.08 points or 0.40% after trading as high as 17,582.99 and as low as 17,516.12. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index up 0.34% while Small cap index was up 0.17%.

The top gainers on the BSE sectoral space were, CD up by 0.70%, IT up by 0.45%, TECk up by 0.19% HC up by 0.11% and Bankex up by 0.06%. While Realty down by 1.14%, Auto down by 0.94%, FMCG down by 0.81, Oil & Gas down by 0.76 and Metal down by 0.58% were the top losers on the index.

Infosys up by 1.08%, SBI up by 0.62%, HDFC Bank up by 0.61%, L&T up by 0.40% and TCS up by 0.36% were the major gainers on the Sensex, while Wipro down by 2.48%, Hindalco Industries down by 1.76%, Tata Motors down by 1.58%, ITC down by 1.28% and Bharti Airtel down by 1.18% were the major losers in the index.

Meanwhile, clearing the air on service tax on remittances, the Central Board of Excise and Customs (CBEC) in a notification has said that ‘there is no service tax per se on the amount of foreign currency remitted to India from overseas.’ The clarification will benefit exporters, families of students studying abroad and people receiving remittances from abroad and the exporter community has expressed satisfaction at this explanation.

Further clarifying, the CBEC stated that in the negative list regime, the term ‘service’ excludes transactions in money. As the remittance comprises money, the activity does not comprise a ‘service’ and is thus not subjected to service tax. And that in terms of the Place of Provision of Services Rules, 2012, such services are deemed to be provided outside India and thus not liable to service tax. Also, that even the Indian counterpart bank or financial institution, which charges the foreign bank or any other entity for the services provided at the receiving end, is not liable to service tax as the place of provision of such service shall be the location of the recipient of the service.

The chief ministers of Punjab, Kerala along with Tamil Nadu and Andhra Pradesh, who are among the largest beneficiaries of such foreign currency transfer from emigrants employed in the Gulf countries, Canada and the US had taken up the issue of service tax on remittances and raised concerns in view of new tax norms.

The S&P CNX Nifty is currently trading at 5,324.20, down by 21.15 points or 0.40% after trading as high as 5,336.45 and as low as 5,314.25. There were 16 stocks advancing against 34 declines on the index.

The top gainers on the Nifty were BPCL up by 1.66%, Kotak Bank up by 1.54%, Infosys up by 1.08%, Power Grid by 0.93% and HDFC Bank up by 0.65%. Wipro down by 2.60%, Hindalco down by 2.23%, Tata Motors down by 1.87%, Reliance Infra down by 1.62% and ITC down by 1.43% was the major losers on the index.

Asian equity indices were trading mixed; Hang Seng index down by 0.30%, Nikkei 225 down 0.08% and Kospi Composite Index down 0.17%, while Shanghai Composite was up 0.15%, Strait Times up 0.33%, Jakarta Composite up 0.11%, KLSE Composite up 0.33% and Taiwan Weighted up 0.09%.