Key gauges pare losses to trade flat in noon deals

Key equity indices pared almost all of their gains to trade flat as traders opted to buy beaten down but fundamentally strong stocks. Buying in healthcare, software and FMCG counters too supported sentiments, while selling was witnessed in oil and gas, energy and telecom space. Traders took some support with report that that income tax department has collected Rs 6.75 lakh crore in gross direct tax, comprising personal income tax (PIT) and corporate income tax (CIT), during the April-November period of current fiscal year (FY19), which is 15.7% higher than the gross collections for the corresponding period of last year. However, cautiousness still there as traders remain concerned about Moody’s Investors Service’s statement that the independence of a country’s central bank is an important consideration while assessing a country’s institutional strength and any attempt by the government to curtail it would be credit negative. To a query on the sovereign rating impact of the developments around RBI, Moody’s said while the motivation for the RBI Governor’s resignation is unclear, the independence of a country’s central bank is an important consideration in their assessment of a sovereign’s institutional strength.

Global cues too remained sluggish with most of the Asian counters trading in red at this point of time on doubts that U.S. and China can manage to resolve their festering trade dispute. Back home, Indian rupee recovered after falling over 1.5% or touching a low of 72.44 per dollar. In scrip specific developments, M&M strengthened with arm launching M5 Electro race car in India and Cadila Healthcare edged higher with arm receiving approval from USFDA for Ranitidine Injection.

The BSE Sensex is currently trading at 34931.07, down by 28.65 points or 0.08% after trading in a range of 34426.29 and 35072.06. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.04%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.51%, IT up by 1.06%, FMCG up by 0.95%, Consumer Durables up by 0.89% and TECK was up by 0.87%, while Oil & Gas down by 0.98%, Energy down by 0.67%, Telecom down by 0.27%, Bankex down by 0.13% and Capital Goods was down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.26%, Sun Pharma up by 4.49%, Asian Paints up by 2.76%, Axis Bank up by 2.42% and Coal India up by 1.42%. On the flip side, ICICI Bank down by 1.50%, HDFC down by 1.39%, HDFC Bank down by 1.35%, Bharti Airtel down by 0.87% and Indusind Bank down by 0.86% were the top losers.

Meanwhile, detailing on taxability of fund under National Pension Scheme (NPS), the government has said that the entire 60% of the corpus withdrawn at the time of retirement will now be tax free. Finance Minister Arun Jaitley said ‘earlier, while exiting the fund (at the time of retirement), 60% (of the corpus) was allowed to be withdrawn and the rest went to annuity. Of this 60%, 40% was tax free and 20% was taxable... Now, this entire 60% is tax free’. He said that both entry stage contribution and 60 % of the withdrawal amount is tax exempt. Currently, 40% of the total accumulated corpus utilised for purchase of annuity is already tax exempted. Out of 60%, of the accumulated corpus withdrawn by the NPS subscriber at the time of retirement, 40% is tax exempt and balance 20 %is taxable.

Besides, Cabinet Committee of Economic Affairs had approved amendments to the National Pension Scheme (NPS) and decided to increase the government's contribution, in the NPS tier-I, to 14% from 10%. The amendment will be applicable for all the employees registered under the scheme after 1st January 2004. This number is expected to be 18 lakh.

The scheme will be notified (come into effect) from next financial year, once amendment to Finance Bill is passed. According to government estimates, this will cost Centre close to Rs 2,840 crore in financial year 2019-20 (FY20). Providing further tax relief to employees under NPS Tier-II scheme, the cabinet cleared applicability of Section 80C of Income Tax Act to such employees.

The CNX Nifty is currently trading at 10485.35, down by 3.10 points or 0.03% after trading in a range of 10333.85 and 10532.40. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.10%, Sun Pharma up by 4.69%, Asian Paints up by 2.79%, Axis Bank up by 2.35% and Tech Mahindra up by 2.12%. On the flip side, HPCL down by 2.93%, Indian Oil Corporation down by 2.75%, BPCL down by 2.33%, HDFC Bank down by 1.37% and ICICI Bank down by 1.31% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 declined 71.48 points or 0.34% to 21,148.02, Straits Times shed 11.21 points or 0.36% to 3,061.23, KOSPI slipped 0.82 points or 0.04% to 2,052.97 and Jakarta Composite was down by 30.42 points or 0.50% to 6,080.94.

On the flip side, Hang Seng strengthened 61.33 points or 0.24% to 25,813.71, Taiwan Weighted surged 59.50 points or 0.62% to 9,707.04 and Shanghai Composite was up by 6.26 points or 0.24% to 2,590.84.