Markets end another session in red but snaps September series higher by 6%

Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday and after a positive start could not hold up the gains and closed with a cut of about a quarter percent; however September series proved a strong one for the markets with benchmark indices gaining over 6% each for the series. There was across the board strength in the market during the series with broader indices gaining around 10% and the sectoral indices adding 6-23%.

The positive cues from the regional markets led the domestic market to start in green, though choppiness was expectedowing to F&O series expiry but in early trade markets started strengthening and by noon touched their highs of the day, there was lots of support from the auto, capital goods, realty and defensive FMCG sector, however the strengthening rupee pressurized the IT and technology stocks. Meanwhile, the finance minister P. Chidambaram said that Prime Minister Manmohan Singh wants measures to avoid volatility in the rupee. Indian currency appreciated further during the day to touch 53.20 mark against the dollar, though it has been one of the worst performing currencies this year in Asian region. Markets started witnessing profit booking from the noon trade tracking the European markets, though the indices remained range bound afterwards but selling intensified in the final hours after the Supreme Court, delivering its opinion on the Presidential Reference moved by the Centre said that auction order must be restricted for the telecom spectrum only and opined that auction cannot be the only method for allocating natural resources.

Sectorally, the day was of FMCG which vaulted by over 1.5%, closely followed by Consumer Durables and Capital Goods who gathered gains of about a percent. However, Oil & Gas sector languished in red with cut of over 1.5% and IT and Technology sectors that were down by about a percent. The UB group stocks remained in limelight, gaining 7-10% for the day as United Spirits resumed talks with British drinks giant Diageo for a possible stake sale and ahead of a presentation of group chief Vijay Mallya to the SBI led consortium of banks on the Kingfisher Airlines’ fund raising plans.

The F&O September series expired with strong gains, supported by lots of policy reforms on the domestic front and announcement of stimulus measures by different countries on global front. Realty and banking stocks were sectors that garnered maximum gains of over 20%, late spurt came in power sector too that gained over 7% for the series. 51 stocks that were to be excluded from the F&O segment witnessed selling pressure, as once excluded these stocks will attract the circuit filter, which means their share price movement will be limited by the exchanges. Out of the shares to be excluded MTNL and Ruchi Soya witnessed cut of over 20% each. Market registered rollovers of 62.66%, lower than the three month average of 64.47%, while Nifty rollovers were at 52.73%. Sectorally, power, capital goods and cement stocks witnessed high rollover while the technology, telecom and oil & gas observed relatively low rollovers into the October series. CNX Mid Cap gained 9.6% during the series, while BSE Small Cap index was up by 12%, BSE Realty index gained 21% and CNX PSU index was up by huge 23% for the series, while BSE Power and Consumer Durables gained 7% and 9% respectively.

The BSE Sensex lost 52.67 points or 0.28% to settle at 18,579.50, while the S&P CNX Nifty declined by 13.95 points or 0.25% to close at 5,649.50.

The BSE Sensex touched a high and a low of 18,735.95 and 18,552.68 respectively. The BSE Mid cap index was up by 0.49% and Small cap index gained 0.15%. 

L&T up by 2.21%, Tata Power up by 1.85%, Hindustan Unilever up by 1.59%, ITC up by 1.25% and Bajaj Auto up by 1.06% were top gainers on the Sensex, while Sterlite Industries down 2.93%, Hero MotoCorp down 2.37%, ONGC down 1.97%, BHEL down 1.92% and Reliance Inds down 1.65% were top losers on the index.

The major gainers on the BSE sectoral space were, FMCG up 1.51%, Consumer Durable (CD) up 1.36%, Capital Goods (CG) up 0.91%, Realty up 0.42% and Health Care (HC) up 0.22%, while Oil & Gas down 1.60%, IT down 1.10%, TECk down 0.89%, Metal down 0.52% and PSU down 0.42% were top losers on the BSE sectoral space.  

Meanwhile, with an aim to make the claim for tax benefit easier, Central Board of Direct Taxes (CBDT) has made it compulsory for all foreign investors, whomever claiming tax benefit  under the double taxation avoidance agreements (DTAAs)  to furnish a Tax Residency Certificate (TRC) from their home country. The amendments will be in force with effect from April 1, 2013, and will be applied in relation to assessment year 2013-14 and subsequent years. TRC for availing tax benefits was proposed in the 2012-13 budget. Apart from foreign investors in India, Indian companies having overseas operations would also get benefited by this move. The prescribed format will also enable foreign residents to know the essentials required to claim tax credits, well in advance.

The TRC to be obtained by the assessee for claiming tax benefits is mandatory to have the name of the assessee along with status, that whether it is an individual or a company and the nationality, in case of individual and incase of company or firm, the country wherein it is registered or incorporated. Besides, the certificate should be incorporated with the tax identification number (TIN) of the assessee, its residential status for the purposes of tax, the period for which the TRC is applicable and the address of the assessee for that period.

Apart from that, assessee has to assure that the certificate is duly verified by the government of the country or the specified territory of which the assessee claims to be a resident for the purposes of tax. The main purpose of TRC is to ensure that the taxpayer, who is resident of one of the contracting countries to the treaty, can claim applicability of beneficial provisions of either of treaty or of the domestic law.

The S&P CNX Nifty touched a high and low of 5,693.70 and 5,639.70 respectively.  The top gainers on the Nifty were Tata Power up by 2.63%, L&T up by 2.09%, HCL Tech up by 1.96%, HUL up by 1.72% and DLF up by 1.35%. On the flip side, SAIL down by 3.81%, Sesa Goa down 3.38%, Sterlite Industries down 3.13%, Cairn down 2.20% and ONGC down by 2.13% were top losers.

The European markets were trading in green, France's CAC 40 up by 0.95%, Germany's DAX up by 0.50% and United Kingdom’s FTSE 100 up by 0.40%.

Asian markets ended mostly in red on Wednesday after US Federal Reserve's head stated that the central bank's huge stimulus plan unveiled this month might not boost the economy as much as hoped. Fall in Japan and Hong Kong’s stocks amid continued worries over territorial dispute between China and Japan also added pressure on the markets. Nikkei ended lower, on the back of speculation about yen-weakening intervention by Japanese authorities. Meanwhile, Seoul closed with red mark on growth worries.