Markets continue positive trade on lower December WPI

After opening on a positive note, Indian equity markets moved further up in the late morning session on the back of sustained buying in several blue chip stocks. The benchmarks witnessed fresh buying interest from investors amid persistent foreign capital inflows coupled with higher Asian advices. Meanwhile, market sentiments also boosted on hopes for a interest rates cut in this month to boost economy that is set to post its slowest growth in a decade, as the wholesale price index (WPI), India's main inflation gauge, unexpectedly eased at 7.18% for the month of December as compared to 7.24% (Provisional) for the previous month and 7.74% during the corresponding month of the previous year. In currency markets, rupee recovered against dollar on increasing US currency’s selling by exporters and banks. On sectoral front, shares from IT, realty, oil, banking and consumer durables sectors were prominent gainers, while healthcare and automobile stocks were a bit subdued. In global markets, Asian shares were mostly higher Monday, adding to recent strong gains, ahead of speeches from central bank chiefs. Back home, the market breadth favoring positive trend; there were 1307 shares on the gaining side against 1115 shares on the losing side while 122 shares remained unchanged.

The BSE Sensex is currently trading at 19815.28 up by 151.64 points or 0.77% after trading in a range of 19853.91 and 19689.09. There were 18 stocks advancing against 11 declines on the index, while one remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.42% and Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were, IT up by 2.09%, Realty up by 1.86%, TECk up by 1.80%, Bankex up by 0.83% and Consumer Durables up by 0.75% while, Auto down by 0.36% and Health Care down by 0.24%, were the only losers on the index.

The top gainers on the Sensex were Infosys up by 3.22%, ONGC up by 2.12%, TCS up by 1.68%, ICICI Bank up by 1.65%, and NTPC up by 1.12%.

On the flip side, Cipla was down by 1.26%, Maruti Suzuki was down by 1.26%, Bajaj Auto was down by 0.83%, Sun Pharma was down by 0.81% and Sterlite Industries was down by 0.77% were the top losers on the Sensex.

Meanwhile, given the sagging economic growth, Industry body CII has asked the government to take steps in the coming budget to boost investments. In its pre-budget memorandum to the Ministry of Finance, It said ‘the recent reform measures have, no doubt, rekindled business confidence but much more needs to be done to provide a fillip to the investment cycle in the present milieu of uncertain domestic and global economic environment’.

Suggesting various measures to restart the investment cycle, CII recommended allowing the accelerated depreciation rate on plant and machinery from the present level of 15 percent to 25 percent for the next 3 to 5 years period. Further, report also added that raising depreciation rate will incentivise industry to make fresh investments at a time when new investments have reduced to nearly half of the last year level.

According to CII, raising the depreciation rate on plant and machinery will permit project developers to obtain full tax advantage of depreciation in a shorter period of time, thus giving incentive for fresh investments without affecting revenue collection for the government.

The industry body also has suggested for abolition of surcharge and cess from corporate tax, exempting infrastructure and SEZ companies from the levy of minimum alternate tax, apart from reduction of Central Sales Tax rate from 2 percent to 1 percent.

CII has so far resisted from asking for stimulus package involving reduction in excise and service tax rates in view of already high level of fiscal deficit and hoped that the rates will not be increased either,' the report highlighted.

The S&P CNX Nifty is currently trading at 5,992.05 up by 40.75 points or 0.68% after trading in a range of 6,002.45 and 5,962.15. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were DLF up by 3.34%, Infosys up by 3.22%, ONGC up by 2.09%, ICICI Bank up by 1.78%, and TCS up by 1.69%.

On the flip side, Ultra Tech Cements down by 1.69%, Lupin down by 1.65%, Maruti Suzuki down by 1.29%, Cipla down by 1.26%, and ACC down by 1.25%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite soared 2.53%, Hang Seng rose 0.56%, Jakarta Composite surged 1.15%, KLSE Composite 0.12%, KOSPI Composite was up by 0.52% and Taiwan Weighted was up by 0.06%, while Straits Times dropped 0.42%. Japanese Nikkei remained shut for trade today on account of Coming of Age (Adults') Day.