Post session - Quick review

Indian equity markets witnessed an awe-inspiring session of trade, where barometer gauges gathering strength brick by brick, concluded in proximity to the high point of the day. Capitalizing on the global risk-on sentiment, equity markets shot near four month high, which took 30 share index, Sensex, above the 17300 level and the 50 share index, Nifty, above the 5250 level. Rock solid-gains in Oil & Gas and rate sensitive -Auto and Bankex- counters, got the markets going. However, last minute profit booking in select stocks dragged the benchmarks a little lower. Stocks belonging to the Fast Moving Consumer Goods, Technology and Information Technology counters, too capped the upside of the bourses. Nevertheless, the gains remained sparkling enough to lighten Dalal Street. Broader indices too went home with gains but in smaller proportion than the frontline indices. Both Midcap and Smallcap index, ended higher by close to half a percent.

On the global front, Asian markets rose sharply in early trading, boosted by stronger-than-expected US hiring figures for July following three months of weak job gains. A weekend statement by the People's Bank of China indicating, it would intensify policy fine-tuning also helped investment sentiment by raising hopes for more monetary easing. Meanwhile, European shares retreated from four-month highs, with investors reluctant to extend the recent gains without more clarity on the next steps in Europe's three-year long debt crisis.

Closer home, spurt of market bellwether Reliance Industries mainly took the Oil & Gas counters higher over two percent.  The stocks soared over 5% to hit its 3-month high today, after the oil giving in to the oil ministry’s demand it agreed to share KG-D6 accounts with the CAG under the terms of the production sharing contract ( PSC), ahead of a crucial meeting of the block's management committee. Moreover, Pharma stocks extended their recent uptrend, with Sun Pharmaceuticals Industries and Wockhardt hitting record highs. Pharma firm Wockhardt shot over 4% on reporting 94.87% rise in consolidated net profit at Rs 377.97 crore for the first quarter ended June 30, 2012 on account of robust performance of US and EU operations. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1661:1172 while 123 scrips remained unchanged. (Provisional)

The BSE Sensex gained 194.01 points or 1.13% and settled at 17,391.94. The index touched a high and a low of 17,451.53 and 17,313.05 respectively. 22 stocks were seen advancing against 8 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.43% while Small-cap index was up 0.75%. (Provisional)

On the BSE Sectoral front, Oil & Gas up 2.84%, Auto up 1.72%, Bankex up 1.34%, Capital Goods up 1.20% and Realty up 1.14% were the top gainers, while FMCG down 0.42%, TECk down 0.21% and IT down 0.21% were the only losers in the space.

The top gainers on the Sensex were RIL up 5.25%, Tata Motors up 3.53%, GAIL India up 2.37%, HDFC Bank up 1.68% and Sterlite Industries up 1.67% while, Wipro down 1.17%, Dr. Reddy’s Lab down 0.96%, NTPC down 0.93%, TCS down 0.63% and ITC down 0.52% were the top losers in the index. (Provisional)

Meanwhile, blaming the current guidelines being subjective and prone to misuse, the Confederation of Indian Industry (CII) has strongly resented the introduction of the controversial General Anti-Avoidance Rules (GAAR) in the current business environment. In the representation on the draft guidelines, which would be submitted to the government on August 7, the apex business chamber opines that this is not the right time to introduce GAAR in the Income Tax Act, and only after the government can assure a transparent, non-corrupt and fair tax administration should GAAR be introduced. Highlighting the need to invite foreign capital into India to bring growth back to our country, the industry body has further suggested GAAR to be deferred to April 1, 2018, if not being completely set aside.

Both foreign as well as domestic investors have been in a tizzy ever since the introduction of GAAR, in mid-March as part of the budget for fiscal 2013. However, the chamber in order to revive investor confidence in India, suggested that GAAR should avoid overriding tax treaties except in rare cases, and only after an independent, high-powered committee constituted for the purpose has given its consent. The industry body also wants adequate safeguards to ensure that GAAR is not used as a tool only for checking tax avoidance & evasion and not collecting additional tax.

In a recent development for fine tuning the controversial GAAR policy, Prime Minister-appointed expert committee initiated the consultation process with various stakeholders to usher in greater clarity and transparency in the draft norms.

Earlier this month, Prime Minister Manmohan Singh appointed a four-member committee headed by noted economist and tax expert Parthasarathi Shome to rework on GAAR. A new panel led former adviser to the finance minister during P Chidambaram’s tenure between 2004 and 2008, will prepare a road map on GAAR by September 30.  The Shome committee after reading and vetting the responses to the draft guidelines that the finance ministry has put out on June 28, will draft second GAAR guidelines by August 31, which would be submitted along with its road map for implementation by the end of September.

India VIX, a gauge for market’s short term expectation of volatility gained 0.62% at 16.22 from its previous close of 16.12 on Friday. (Provisional)

The S&P CNX Nifty gained 58.30 points or 1.12% to settle at 5,274.00. The index touched high and low of 5,293.20 and 5,260.85 respectively. 36 stocks advanced against 14 declining ones on the index. (Provisional)

The top gainers on the Nifty were Reliance Industries up 5.51%, Tata Motors up 3.67%, JP Associates up 3.07%, GAIL India up 2.74% and Kotak Bank up 2.36%. On the other hand, BPCL down 3.02%, Wipro down 0.94%, Dr. Reddy’s Lab down 0.92%, TCS down 0.88% and ITC down 0.62% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.51%, Germany's DAX up 0.56% and Britain’s FTSE 100 up 0.11%.

Supported by strong employment data from the US, Asian markets rose sharply on Monday amid positive signs from Europe improved sentiment, lifting Hong Kong's Hang Seng Index to near a three-month high. The statement from European Central Bank officials that bank could intervene and buy the bonds of struggling euro-zone countries without unanimous approval, also raised hopes that a bond buying program is still a possibility. However, investors still looking from more positive triggers ahead of China’s economic data for July, with inflation figures out on Thursday and its trade balance to be released on Friday.