Benchmarks trade marginally in red

Indian equity benchmarks made a cautious start and are trading marginally lower in early deals on Tuesday as traders remained wary ahead of macro-economic data and new round of Sino-US trade talks. Market-men are eyeing the macro economic data of industrial production and consumer price inflation to be released after the market hours. Some cautiousness also crept in with the Agricultural & Processed Food Products Export Development Authority’s (Apeda) data showing that India’s exports of agricultural commodities nosedived by up to a staggering 46 per cent in volume terms due to supply glut in the international market which prompted stockists to defer their purchase plans amid expectations of further price fall. However, losses remain capped with Electronics and IT Secretary Ajay Prakash Sawhney’s statement that new schemes introduced by the government will focus not only on manufacturing of electronics in India, but also positioning the country as an export hub.

On the global front, Asian markets are trading mostly in green at this point of time with investors looking to a new round of Sino-US trade talks as the world’s two largest economies try to resolve a tariff dispute that has put a dent on global growth and corporate earnings. The US markets ended mostly higher on Monday, led by industrial companies.

Back home, banking sector stocks remained buzzing with report that the government is not considering any other merger proposal in public sector banks at the moment as it would wait for completion of the amalgamation of Dena Bank and Vijaya Bank with Bank of Baroda (BoB). In scrip specific developments, Eicher Motors gained on reporting marginal rise in Q3 consolidated net profit and L&T edged higher with its  arm bagging order from Sonatrach-Algeria.

The BSE Sensex is currently trading at 36326.06, down by 68.97 points or 0.19% after trading in a range of 36323.64 and 36465.40. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.18%, while Small cap index was down by 0.40%.

The top gaining sectoral indices on the BSE were Energy up by 0.93%, Power up by 0.29%, PSU up by 0.27%, Oil & Gas up by 0.25% and Metal was up by 0.19%, while IT down by 1.87%, TECK down by 1.73%, Telecom down by 1.00%, Realty down by 0.53% and Consumer Durables was down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 1.56%, Coal India up by 1.53%, Mahindra & Mahindra up by 1.17%, Yes Bank up by 0.98% and Reliance Industries up by 0.95%. On the flip side, Infosys down by 2.53%, TCS down by 1.94%, Hero MotoCorp down by 1.46%, HCL Tech. down by 1.33% and Bajaj Auto down by 1.19% were the top losers.

Meanwhile, with an aim to help budding entrepreneurs, the government is considering giving complete exemption to startups from angel tax once they are certified by the Commerce and Industry Ministry. The consideration assumes significance as several startups have claimed to receive angel tax notices, impacting their businesses. Various startups have raised concerns on notices sent to them under the Section 56(2)(viib) of Income Tax Act to pay taxes on angel funds received by them. Besides, in order to address the angel tax issue, officials of the department for promotion of industry and internal trade (DPIIT) and Central Board of Direct Taxes (CBDT) are holding series of meetings.

This move may be gelled with capping the investment to a much higher level of angel funds so that a good number of startups do not face the taxmen. A notification in this regard is expected to be issued by the department and board soon. Giving relief to budding entrepreneurs last year, the government allowed startups to avail tax concession only if total investment, including funding from angel investors, does not exceed Rs 10 crore.  Though startups are demanding complete exemption from this tax, the government may increase investment limit for tax exemption to Rs 25-40 crore.

Section 56(2)(viib) of the Income Tax Act provides that the amount raised by a startup in excess of its fair market value would be deemed as income from other sources and would be taxed at 30 per cent. Touted as an anti-abuse measure, this section was introduced in 2012. It is dubbed as angel tax due to its impact on investments made by angel investors in startup ventures.

Recently, the government eased the procedure for seeking income tax exemption by startups on investments from angel funds and prescribed a 45-day deadline for a decision on such applications of budding entrepreneurs. The new procedure says that to seek exemption, a startup should apply, with all documents, to DPIIT. The application of the recognised startup shall then be moved to the CBDT. Startups will have to provide account details and return of income for last three years. Similarly, investors would also have to give their net worth details and return of income.

The CNX Nifty is currently trading at 10868.50, down by 20.30 points or 0.19% after trading in a range of 10865.70 and 10910.90. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.03%, Zee Entertainment up by 1.56%, Coal India up by 1.53%, BPCL up by 1.51% and Power Grid Corporation up by 1.43%. On the flip side, Infosys down by 2.67%, Bharti Infratel down by 2.47%, TCS down by 2.07%, GAIL India down by 1.78% and HCL Tech. down by 1.61% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 soared 528.00 points or 2.60% to 20,861.17, Straits Times rose 0.21 points or 0.01% to 3,206.48, Hang Seng increased 44.30 points or 0.16% to 28,188.14, Taiwan Weighted jumped 73.60 points or 0.74% to 10,077.85, KOSPI added 10.37 points or 0.48% to 2,191.10 and Shanghai Composite was up by 19.23 points or 0.72% to 2,673.13. On the flip side, Jakarta Composite was down by 54.17 points or 0.83% to 6,440.83.