Benchmarks continue its firm trade; Nifty surpass 5,100 mark

Indian equity indices are trading in green on a firm note hovering around the highest point of the day overlooking the gloomy European market as investors continue to pile up hefty positions almost across the counters. Market participants were seen piling up positions in IT, TECk and Consumer Durables while selling was witnessed in Capital Goods sector. Stocks like Alfa Laval, Eros International, Tilak Finance, Residency Projects, Hindoostan Mills, Surana Industries, Esaar India and Aanjaneya Lifecare hit new high while stocks like Nitesh Estate, Tanla Solutions, Omkar Overseas and Brooks Laboratories hit new low. Natco Pharma rose after Litha Healthcare Group, a Johannesburg Stock Exchange listed integrated healthcare company, announced a strategic tie-up with the Hyderabad-based firm. Servalakshmi Paper is in green after its power plant and paper plant resumed production from September 19, 2011.

In other scrip specific development, Everonn Education was locked at its upper circuit limit after the company's board at its meeting held September 19, 2011, approved issuing 26.18 lakh equity shares to Varkey Group on preferential basis at premium. Shares of Information Technology stocks like Infosys, TCS, Wipro, HCL Technologies, Oracle Financial Services, Mahindra Satyam, Mphasis, Tech Mahindra, Rolta India and iGate Patni were up after the Indian rupee fell to its weakest level in two years. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a major share of revenue from exports. Bharti Airtel is trading firm in green on reports that Bharti Telecom has raised stake in Bharti Airtel to 45.5%. Engineers India was up after a block deal of 50.09 lakh shares.

Hectic activity was noticed along with heavy volumes in counters of India Securities, Hexaware Technologies and Goenka Diamond and Jewels due to fund based activity as of yesterday. Essar Capital bought 47,500,000 shares of India Securities while Essar Teleholdings sold 47,500,000 shares. Elder Hides and Leather sold 5,200,000 shares of Hexaware Technologies while Elder Venture LLP bought 5,200,000 shares. Vikabh Securities sold 225,000 shares of Goenka Diamond and Jewels. California Software Company is in green on reports that it is considering sale of its business unit enterprise solution that comprises of Inatech Infosolutions and its subsidiaries.

EID Parry inched up on inking a share purchase agreement to buy additional stake in US Nutraceuticals LLC. ARSS Infrastructure is firm on diluting 50% stake in Rs 400 crore Bhubaneshwar transport infrastructure project. On the global front, Asian markets were trading in mix while the European markets were trading in green on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,100 and 16,900 levels, respectively. The market breadth on the BSE was positive in the ratio of 1731:910 while, 110 scrips remained unchanged.

The BSE Sensex is currently trading at 16,998.46 up by 253.11 points or 1.51% after trading as high as 17,024.14 and as low as 16,758.69. There were 26 stocks advancing against 4 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index gained 0.67% while Small cap advanced 0.92%.

On the BSE sectoral space, IT up 2.81%, TECk up 2.39%, Consumer Durables up 2.25%, Bankex up 1.72%, and Metal up 1.64% were the major gainers while Capital Goods down 0.10% was the only losers on the index.

Hindalco up 3.51%, Wipro up 3.48%, TCS up 3.07%, Infosys up 2.79% and SBI up 2.79% were the major gainers on the Sensex, while ONGC down by 3.38%, BHEL down 1.17%, Maruti down 0.40% and L&T down 0.12% were the only losers on the index.

Meanwhile, the Finance Ministry is hopeful of meeting the indirect tax collections target of Rs 3.98 lakh crore this fiscal, despite industrial growth slowing down to 5.8% in the first four months against 9.7% in the corresponding period of last fiscal. Central Board of Excise and Customs (CBEC) Chairman S Dutt Majumder said, ‘our revenue collection is robust right now. Total indirect tax collection is 23.9 percent up till August. I don’t think there is any reason for concern (on meeting target). We are confident of achieving the target.’

By adding further he said, central excise and service tax collections were good and so was customs duty collections. Followed by the robust service tax collections, the indirect tax mop-up in the April-August period rose by 23.9% to Rs 1,57,725 crore. The government, on the contrary has pegged indirect taxes collections at Rs 3.98 lakh crore for this fiscal, representing a growth of 18% over Rs 3.38 lakh crore last fiscal.

Uncertainties were expressed whether indirect tax collections target would be met, as industrial growth plunged to a 21-month low of 3.3% in July. Besides, the government has cut customs and excise duties on petroleum products, which contribute Rs 49,000 crore annually to the Centre kitty. On this the CBEC chairman, however, maintained that the cut in duties on petroleum products would not impact indirect tax mop up.

Given that fiscal deficit has already reached 7.88% of GDP in the first quarter, the government cannot afford to overlook the tax collection at this point in time. On taxation of services based on a negative list, the CBEC chairman said the discussion is on whether to have a negative list or a positive one. ‘That call (on negative list) will be taken later, as the Finance Minister Pranab Mukherjee has announced that he wants to have an informed debate on the subject, whether we should go for a positive list or negative list. So we have thrown that debate open,’ he added.

The CBEC chairman, however, said that service tax collection would increase if the negative list approach is pursued. The draft negative list of services was recently released by the finance ministry.

The S&P CNX Nifty is currently trading at 5,115.05, higher by 83.10 points or 1.65% after trading as high as 5,116.85 and as low as 5,035.25. There were 44 stocks advancing against 6 declines on the index.

The top gainers of the Nifty were Reliance Capital up 3.71%, Wipro up by 3.70%, RCOM up 3.58%, Hindalco up 3.54% and Reliance Power up 3.26%.

ONGC down 3.28%, BHEL down 1.15%, Maruti down 0.40%, L&T down 0.33% and BPCL down 0.18% were the major losers on the index.

Asian markets traded on a mixed note, Hang Seng added 0.51%, Shanghai Composite added 0.41%, Straits Times rose 0.73%, Seoul Composite surged 0.94% and Taiwan Weighted gained 0.16%. On the other hand, Jakarta Composite sank 0.41%, KLSE Composite shaved off 0.18% and Nikkei 225 plunged 1.61%.

The European markets were trading in green with, France’s CAC 40 advanced 0.32%, Germany's DAX gained 1.27% and Britain’s FTSE 100 added 0.63%.