Markets slip into negative territory; Nifty trading in narrow range

After a fairly positive start, Indian equity markets slipped into red territory and currently trading marginally down amid volatile trades. The BSE benchmark was down 29 points, while 50-share NSE Nifty was hovering in a narrow range of 5,550-5,580 level due to lack of global and local cues. Investors were trading cautiously ahead of winter parliament session, which will begin on November 22, 2012. In currency markets, rupee recovered from early session’s losses and trading higher against dollar on Monday, as all Asian units got stronger compared to the American currency. On sectoral front, metal, healthcare, bank and capital goods stocks were trading weak. Oil and realty stocks too were quite subdued at present, while only automobile stocks were finding good support. In global markets, Asian markets trading mixed taking cues from a positive tone in US equities last week and yen’s depreciation against the dollar on expectations a new government after next month's election in Japan may deliver more stimulus. Back home, the market breadth favoring negative trend; there were 858 shares on the gaining side against 1,489 shares on the losing side while 112 shares remain unchanged.

The BSE Sensex is currently trading at 18,279.64, down by 29.73 points or 0.16% after trading in a range of 18,386.78 and 18,269.56. There were 12 stocks advancing against 18 declines on the index.

The broader indices too were under pressure; the BSE Mid cap and Small cap indices were trading lower by 0.70% and 0.58% respectively.

The only gaining sectoral index on the BSE was Auto up by 0.75%, while, Metal down by 0.80%, CD down by 0.79%, HC down by 0.72%, Bankex down 0.49% and Oil & Gas down by 0.47% were top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 2.98%, Bharti Airtel up by 2.59%, Mahindra & Mahindra up by 1.18%, NTPC up by 0.96% and ITC up by 0.89%.

On the flip side, Hindalco down by 1.52%, Hindustan Unilever down by 1.52%, Tata Power down by 1.51%, Sterlite Industries down by 1.34% and HDFC down by 1.32% were the top losers on the Sensex.

Meanwhile, keenly eyed amendments to the controversial law against tax avoidance through foreign investments, ‘GAAR’, have been finalized, Finance Minister P Chidambaram disclosed. Amendments to the Chapter 10A of the Income Tax Act have been finalized (Chapter 10A of the Income Tax Act deals with taxation of investments). These amendments in the GAAR rules after going through the Prime Minister Office (PMO) will be reflected in the amended Chapter 10A, the investor’s friendly Finance Minister added.

GAAR (General Anti-Avoidance Rules), which was proposed in 2012-13 budget with a view to prevent tax evasion, drew flak from foreign as well as domestic investors who feared that unbridled powers to taxmen would result in harassment of investors. Post to which, the government appointed a committee headed by tax expert Parthasarthi Shome to look into their concerns.

Expert panel recommended that the rules be deferred by three years. It also called for treaty nations such as Mauritius and Singapore to be kept out of GAAR’s purview. In a major positive for the markets and investors, it also suggested the abolition of tax on gains from transfer of listed securities.

Further, Chidambaram also exuded his optimism on meeting disinvestment and spectrum sales target, confidence on pushing through with reforms measures and the relationship with RBI which he said was not antagonistic. Chidambaram underscored that government was keen to get the investment engine going and measures were being taken by the government to create a ‘better climate.’

The S&P CNX Nifty is currently trading at 5,557.05, down by 17.00 points or 0.30% after trading in a range of 5,592.75 and 5,552.25. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were Maruti up by 3.04%, Bharti Airtel up by 2.54%, M&M up by 1.35%, Cipla up by 1.01%, and ITC up by 0.98%.

On the other hand, Ambuja Cements down by 2.69%, Lupin down by 2.44%, IDFC down by 1.95%, Tata Power down 1.61% and BPCL down by 1.53% were the major losers on the index.

Asian markets were trading mixed; Hang Seng up by 0.15%, Straits Times was up by 0.05%, Kospi Composite up by 0.94%, Nikkei 225 surged 1.34% were the gainer amongst Asian pack.

On the flip side, Taiwan Weighted down by 0.01%, Shanghai Composite declined 0.86%, KLSE Composite down by 0.31%, Jakarta Composite down by 0.74% were trading in red.