Benchmarks extend losses; HC, Metal drags

Indian equities continued to trade weak in the late morning session. On the regional front, most of the Asian markets were trading in the red at this point of time as concern of China’s economic slowdown and its territorial dispute with Japan were weighing on corporate earnings of both the nations. Back home, traders were seen piling up position in HC, Metal and FMCG sector while selling was witnessed in Realty, Power and CG sector. Sun Pharma, Cipla, Ranbaxy Laboratories, Glaxosmithkline Pharmaceutical and Cadila Healthcare from HC pack were seen trading in green edging the markets higher. ITC, Nestle India, United Spirits, Godrej Consumer Products and Dabur India from FMCG pack were seen trading firm in green. Realty majors - DLF, Unitech, HDIL, Oberoi Realty and Indiabulls Real Estate were capping the markets’ gains. While, Power majors NTPC, BHEL, Power Grid Corp, Tata Power and Reliance Infra too were pressurizing the markets. In the scrip specific development, Peninsula Land jumped on entering into an agreement to develop property in Central Mumbai. Jyoti edged higher on bagging multiple orders worth Rs 69.75 crore. Dhunseri Petrochem gained on inaugurating second PET plant at Haldia. McNally Bharat soared on bagging order worth Rs 107.53 crore.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5,650 and 18600 levels respectively. The market breadth on BSE was negative, in the ratio of 891:1249.

The BSE Sensex is currently trading at 18695.87 down by 97.49 points or 0.52% after trading in a range of 18740.63 and 18659.77. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.61% and Small cap index was down by 0.59%.

On the BSE sectoral space, HC up by 0.19%, Metal up by 0.18% and FMCG up by 0.07%, were the top gainers. While, Realty down by 3.46%, Power up by 1.43%, CG down by 0.95%, Bankex down by 0.95% and PSU down by 0.80% was only the losers.

The top gainers on the Sensex were Tata Steel up by 1.23%, Cipla up by 0.92%, Hero MotoCorp up by 0.58%, Tata Motors up by 0.30% and Jindal Steel up by 0.26%. On the other hand, BHEL down by 1.74%, Gail India down by 1.33%, Tata Power down by 1.32%, NTPC down by 1.32% and SBI down by 1.23% was only the loser on the Sensex. 

Meanwhile, in what can be said as an extension to the reform measures, the government has said that it will not wait for the Budget, due in February, to address the issues concerning retrospective amendment to Income Tax laws. Finance Minister P Chidambaram stated that ‘once we take a view on Shome Committee report, I see no reason why we should wait for the Budget session. We should move whatever changes have to be brought about in Parliament as early as possible.’

The Committee, headed by tax expert Parthasarathi Shome, had last week submitted its report on retrospective tax amendment to the Finance Minister and has opined that ideally taxes should not be levied retrospectively and if indeed the government does choose to impose them retrospectively, it should not claim either interest or penalty.

The panel’s recommendation has not only provided relief to the domestic investors but has also given major reprieve to foreign institutional investors (FIIs) and private equity (PE) investors. The panel has recommended that in cases where FIIs and PE investors have a less than controlling stake through indirect investment, they should not be hit by the indirect transfer rule. Above all it has recommendation that the government should use its constitutional powers to amend tax laws retrospectively only in the rarest of rare cases.

Finance Minister has said that ‘resolution of the tax disputes, both pending and anticipated, is good for the country, good for the economy and investments. So we must find ways to resolve the issue.’ 

The S&P CNX Nifty is currently trading at 5,676.75, down by 27.85 points or 0.49% after trading in a range of 5,686.50 and 5,660.10. There were 17 stocks advancing against 31 declines while 2 scrips remained unchanged on the index.

The top gainers of the Nifty were HCL Tech up by 2.26%, JP Associates up by 1.52%, Tata Steel up by 1.08%, PNB up by 1.04% and Grasim was up by 0.90%. While, DLF down by 3.79%, Siemens down by 2.38%, Reliance Infra down by 2.01%, IDFC down by 1.83% and BHEL  down by 1.82% were the losers on the index

Most of the Asian equity indices were trading in the red; Straits Times was down by 0.83%, Kospi Composite was down by 1.26%, Nikkei 225 was down by 1.78%, Jakarta Composite down by 0.03%, Hang Seng was down by 0.12% and KLSE Composite was down by 0.19% while Shanghai Composite was up by 2.04% was the lone gainers.

Taiwan Weighted is closed for trading on account of National Day.