Benchmarks continue firm trade in late afternoon session

Indian equity markets added gains to continue firm trade in the late afternoon session on account of buying in front line counters and taking cues from European counterparts. The sentiments on the street were on optimistic mood on expectation that the Reserve Bank of India (RBI) may cut interest rates in March policy to boost growth. The market also cheered after HSBC survey showed that the country expanded at a faster rate than China in February even as emerging market economies witnessed a moderation in economic growth. During February, the HSBC composite index for India, which maps both manufacturing and services sectors, stood at 54.8, whereas for China it was 51.4. Traders were seen piling some position in Realty, Capital Goods and Metal sector while selling was witnessed in FMCG sector. Hectic activity was noticed in sugar stocks on reports that the sugar decontrol will be introduced very soon by the Government. In the scrip specific development, Larsen & Toubro (L&T), an engineering and construction conglomerate, was trading firm after global firm Goldman Sachs upgraded the stock to ‘buy’ from ‘neutral’.

On the global front, all the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,800 and 19,200 levels respectively. The market breadth on BSE was positive in the ratio of 1708:972 while 122 scrips remain unchanged.

The BSE Sensex is currently trading at 19,265.62, up by 122.45 points or 0.64% after trading in a range of 19,293.39 and 19,195.47. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.32% and Small cap index was up by 1.65%.

The top gaining sectoral indices on the BSE were, Realty up by 4.66%, Capital Goods up by 2.48%, Metal up by 2.36%, IT up by 1.12% and Oil & Gas up by 1.02% while, FMCG down by 0.49% were the sole losers on the BSE.

The top gainers on the Sensex were Sterlite Industries up by 4.60%, Hindalco Industries up by 3.35%, L&T up by 2.89%, Tata Steel up by 2.86% and BHEL up by 2.16%.

On the flip side, Mahindra & Mahindra down by 1.69%, Hindustan Unilever down by 1.47%, ITC down by 0.74%, Maruti Suzuki down by 0.68% and NTPC down by 0.30% were the top losers on the Sensex.

Meanwhile, in a move to have to have stable tax system, the finance ministry has urged public sector enterprises to ensure that service tax collected on the services availed by them are deposited to the exchequer. Several firms including telecom companies, collect service tax as part of their regular billing, but do not deposit the collected taxes to the government. 

In FY14 Budget, the government has made non-deposit of service tax of Rs 50 lakh or more a cognisable offence, which could lead to the arrest. This provision has put trade industry in a spot as they fear harassment, given that this provision could be misused and lead to their arrest.

However, to allay fears of trade, Central Board of Excise and Customs (CBEC) chairperson Praveen Mahajan said enough safeguards were in place to ensure that the provision was not misused. The basic thrust is to have stable tax system and, therefore, we resisted the temptation of hiking tax rates to 14 per cent.

By adding further she said, ‘we have ensured that the power of arrest is vested with a high ranking official at a level of commissioner. Penal provisions were already there and we have only made the offences cognisable. The number of arrests as a percentage of offences is below one per cent.’  

The CNX Nifty is currently trading at 5,819.05, up by 34.80 points or 0.60% after trading in a range of 5,828.70 and 5,795.05. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were JP Associate up by 4.82%, IDFC up by 4.44%, DLF up by 3.89%, Bank of Baroda up by 3.37% and Sesa Goa up by 3.25%.

On the flip side, M&M down by 1.65%, Hindustan Unilever down by 1.53%, BPCL down by 1.07%, ITC down by 0.89% and Ambuja Cements down by 0.85% were the major losers on the index.

All Asian equity indices were trading in the green; Shanghai Composite rose 0.90%, Hang Seng surged 0.96%, Jakarta Composite strengthened 1.58%, KLSE Composite jumped 0.64%, Nikkei 225 soared 2.13%, Straits Times increased 1.10%, KOSPI Composite added 0.20% and Taiwan Weighted was up 0.22%.

The European markets were trading in green; France’s CAC 40 added 0.40%, Germany’s DAX ascended 0.51% and United Kingdom’s FTSE 100 jumped by 0.22%.