Bourses continue to trade in high spirit

Indian equity benchmarks continued to trade in high spirit in noon session, on account of broad based buying in blue chip counters amid softening consumer inflation. Retail inflation dropped to a five-month low of 6.71% in July, offering respite to fiscal and monetary authorities as they strive hard to break the back of inflation. A fall in global commodity prices and the resultant taming of imported inflation, contributed to the easing of price pressures. In another positive development, July WPI Inflation eased to 13.93% against 15.18% month-on-month basis. The market breadth remained optimistic, as there were 1859 shares on the gaining side against 1564 shares on the losing side, while 179 shares remained unchanged.

On the global front, Asian markets were trading mostly lower weighed by worries over global growth following weak China data that knocked oil prices and commodity-linked currencies. Back home, on IPO front -- Syrma Retail’s IPO was fully subscribed. The IPO got subscribed 0.53 times on day 2. NII portion subscribed 0.18 times and Retail 1.00 times. The Rs 840-crore public issue is still open for subscription for investors till August 18.

The BSE Sensex is currently trading at 59765.41, up by 302.63 points or 0.51% after trading in a range of 59673.96 and 59923.03. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Auto up by 1.70%, FMCG up by 1.25%, Consumer Discretionary up by 1.25%, Realty up by 1.19% and Industrials was up by 0.93%, while Metal down by 0.61%, Telecom down by 0.27%, TECK down by 0.05% and PSU was down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.54%, Asian Paints up by 2.03%, Hindustan Unilever up by 1.88%, Mahindra & Mahindra up by 1.60% and HDFC Bank was up by 1.27%. On the flip side, Bharti Airtel down by 0.82%, SBI down by 0.76%, Tech Mahindra down by 0.52%, NTPC down by 0.41% and HCL Tech was down by 0.21% were the top losers.

Meanwhile, commerce ministry is proposing a host of direct and indirect incentives such as deferral of import duties and exemption from export taxes to revamp Special Economic Zones (SEZs) through a new legislation. In the Union Budget this year, the government proposed to replace the existing law governing SEZs with a new legislation to enable states to become partners in 'Development of Enterprise and Service Hubs' (DESH). The commerce ministry has sought views of different ministries, including finance, on the new bill. After collating the feedback, the ministry would seek approval of the Cabinet and then introduce the new bill in Parliament.

The proposals seek to provide incentives such as retention of zero-rating of IGST (integrated goods and services tax) on domestic procurement by a unit in an SEZ; continuation of indirect tax benefits to developers of these zones; and allowing depreciation on sale of used capital goods cleared to domestic tariff areas. There is also a plan to extend the corporate tax rate to 15 per cent without any exemptions for units undertaking authorised operations in these development hubs. States can also provide support measures to these zones to boost manufacturing and job creation.

The existing SEZ Act was enacted in 2006 with an aim to create export hubs and boost manufacturing in the country. However, these zones started losing their sheen after imposition of minimum alternate tax and introduction of sunset clause for removal of tax incentives. These zones are treated as foreign entities in terms of provisions related to customs. Industry has time and again demanded continuation of tax benefits provided under the law. Units in SEZs used to enjoy 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five years and 50 per cent of the ploughed back export profit for another five years.

The CNX Nifty is currently trading at 17797.70, up by 99.55 points or 0.56% after trading in a range of 17764.05 and 17839.10. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 4.30%, Adani Ports up by 3.68%, Eicher Motors up by 3.50%, Maruti Suzuki up by 2.60% and SBI Life Insurance was up by 2.25%. On the flip side, Grasim Industries down by 2.06%, Hindalco down by 1.54%, ONGC down by 1.19%, Bharti Airtel down by 0.80% and SBI was down by 0.78% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 313.71 points or 1.57% to 19,727.15, Shanghai Composite declined 1.73 points or 0.05% to 3,274.36, Jakarta Composite lost 5.22 points or 0.07% to 7,088.06, Nikkei 225 slipped 2.87 points or 0.01% to 28,868.91 and Straits Times was down by 9.38 points or 0.29% to 3,247.44.

On the other hand; KOSPI rose 5.58 points or 0.22% to 2,533.52 and Taiwan Weighted was up by 3.22 points or 0.02% to 15,420.57.