Sensex, Nifty trade flat with positive bias

Indian equity benchmarks staged recovery to trade in green with marginal gains on the back of positive cues from other Asian markets. Traders were getting support, as Finance Minister Nirmala Sitharaman said that while the necessary stimulus for growth would continue, her ministry and the Reserve Bank of India (RBI) would work on a pathway to maintain the growth momentum for the next 25 years in order to make India an advanced economy. Some relief also came after Governor Shaktikanta Das said that the Reserve Bank of India’s (RBI’s) interventions in the foreign exchange market are not just aimed at preventing excessive volatility in the rupee but also to anchor expectations around the depreciation of the domestic currency.

On the global front, Asian markets were trading mostly in green, after China's services companies continued to recover in August from the recent wave of the pandemic underpinned by strong sales. The survey results from S&P Global showed that the Caixin services Purchasing Managers' Index came in at 55.0, down from 55.5 in July. A score above 50.0 indicates expansion. Moreover, the rate of expansion was the second-quickest recorded since May 2021.

The BSE Sensex is currently trading at 59276.14, up by 30.16 points or 0.05% after trading in a range of 58974.26 and 59566.67. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Power up by 1.37%, Utilities up by 1.28%, Energy up by 0.75%, Oil & Gas up by 0.75% and Industrials up by 0.46%, while IT down by 0.47%, FMCG down by 0.30%, TECK down by 0.11% and Basic Materials down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.72%, NTPC up by 1.83%, Reliance Industries up by 0.76%, ICICI Bank up by 0.64% and Power Grid up by 0.58%. On the flip side, Bajaj Finserv down by 1.22%, Nestle down by 0.90%, Asian Paints down by 0.87%, Hindustan Unilever down by 0.72% and Tech Mahindra down by 0.69% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has defended the windfall tax on domestically produced crude oil and additional tax on exports of refined petroleum products, saying the levy has been imposed in full consultation with the industry. From July 1, the government has imposed a windfall tax on domestically produced crude and additional tax on refined products like petrol, diesel and aviation fuel. The move was expected to garner an additional tax of Rs 66,000 crore this fiscal, though the amount would vary depending on the price of crude and export prices of refined products.

The minister stated that from July, the tax on per litre of petrol and ATF export was Rs 6 each and on diesel it was Rs 13. Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically. Accordingly, when crude prices fell later in July, government reduced the tax rates. At the fourth fortnightly review on August 31, government raised windfall profit tax on diesel export to Rs 13.5 a litre from Rs 7 and that on aviation turbine fuel (ATF) to Rs 9 from Rs 2 from September 1. Alongside, tax on domestically-produced crude too was hiked to Rs 13,300 per tonne from Rs 13,000.

Talking on whether the government is planning to increase the tax-GDP ratio, which is only about 10 per cent now, she said widening the tax base is an issue that needs lot of consultation and analysis, though increasing number of income tax filings gives some clue on the possibility of widening it. But, she said the government wants to ensure that as and when it is done, it looks reasonable and is tech-driven. The minister also credited the massive increase in tax collection to the introduction of technology for assessment and refunds. She added that increase in tax collection is not due to raising any tax rates, but because of introduction of technology, including the faceless assessment system.

The CNX Nifty is currently trading at 17668.75, up by 2.95 points or 0.02% after trading in a range of 17587.65 and 17764.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.62%, Apollo Hospital Ent. up by 1.75%, NTPC up by 1.70%, Cipla up by 1.36% and Reliance Industries up by 0.75%. On the flip side, Bajaj Finserv down by 1.27%, Britannia down by 1.23%, Tata Consumer Products down by 0.99%, Asian Paints down by 0.89% and Nestle down by 0.86% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 16.10 points or 0.11% to 14,677.20, Straits Times advanced 3.25 points or 0.10% to 3,218.73, Nikkei 225 surged 3.57 points or 0.01% to 27,623.18, KOSPI rose 1.90 points or 0.08% to 2,405.58, Shanghai Composite gained 31.29 points or 0.98% to 3,231.20 and Jakarta Composite soared 8.24 points or 0.11% to 7,240.12, while Hang Seng decreased 79.85 points or 0.42% to 19,145.85.