Benchmarks open flat in absence of any major trigger

The Indian equity markets have made a flat start as investors remained on the safer side in the absence of any positive cues. Though, The US markets, after three consecutive sessions of green closing, marginally slipped into red in Friday’s trade while, Asian counterparts were trading mixed at this point of time. Back home, markets are trading flat following mixed Asian cues and opting to consolidate after a sharp pullback on Friday. On the sectoral front software witnessed the maximum gain in trade followed by oil and gas and power while, fast moving consumer durables, realty and oil and gasbanking remained the only losers on the BSE sectoral space. Meanwhile, Software stocks viz. Infosys, TCS, Wipro and HCL Tech rose by 0.50-1.50 percent as the Telecoms and Information Technology minister Kapil Sibal has said that India will consider giving tax sops for information technology companies after the direct tax bill comes into affect. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,175 shares on the gaining side against 552 shares on the losing side while 75 shares remained unchanged.

The BSE Sensex opened at 16,270.07; about 38 points higher compared to its previous closing of 16,232.54, and has touched a high and a low of 16,310.03 and 16,230.77 respectively.

The index is currently trading at 16,277.60, up by 45.06 points or 0.28%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a strong start with 65.21% stocks advancing against 30.63% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.64% and 0.66% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.84%, Oil and Gas up by 0.81%, Power up by 0.68%, CD up by 0.66% and Metal was up by 0.59%. While, FMCG down by 0.38%, Realty down by 0.24% and Bankex down by 0.19% were the only losers on the index.

The top gainers on the Sensex were Tata Motors up by 1.86%, BHEL up by 1.64%, Sterlite Industries up by 1.63%, HDFC up by 1.53% and Coal India was up by 1.51%.

On the flip side, Maruti Suzuki was down by 3.15%, Bharti Airtel was down by 2.51%, Jindal Steel was down by 1.45%, Sun Pharma was down by 0.78% and HUL was down by 0.73% were the top losers on the Sensex.

Meanwhile, The government is considering offering tax incentives to the software exporters after the introduction of the Direct Taxes Code. The Telecom and Information Technology Minister Kapil Sibal has said that government may consider offering tax incentives to software exporters once the Direct Taxes Code (DTC) is implemented next year. The Information Technology companies and ITeS firms use to get tax incentives in the Software Technology Parks of India scheme, however, which expired in last financial year.

Meanwhile, the Draft National Policy on Information Technology-2011 was introduced, by which the government envisages the country’s software industry to generate nearly $300 billion revenue by 2020 compared to the current $89 billion.  Currently, IT firms generate around four-fifth revenue comes from the exports. The draft policy seeks to provide support growth of indigenous market.

The draft policy also seeks to generate pool of additional 10 million skilled man-powers by 2020. Currently the Indian IT and ITeS sector provide employments to around 2.5 million skilled people. The policy also suggests fiscal incentives to attract investment in this IT sector in Tier-2 and 3 cities. The National Policy on Information Technology also targets to provide fiscal incentives to the small and medium enterprises (SMEs) and start-up Venture in key industries verticals for the adoption of IT.

 “As most of the IT companies are located in big cities like Bangalore, Pune, Hyderabad and Mumbai, the policy will now look at expanding to tier 2 and tier 3 cities as well,” Sibal said. The policy aims to strengthen and enhance India’s position as a global IT hub and to use IT as an engine for rapid, inclusive and sustainable growth in the national economy, he further added.

The S&P CNX Nifty opened at 4,886.85; flat compared to its previous closing of 4,888.05, and has touched a high and a low of 4,904.25 and 4,882.05 respectively.

The index is currently trading at 4,897.20, higher by 9.15 points or 0.19%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were IDFC up by 2.02%, Tata Motors up by 1.70%, Sterlite Industries up by 1.67%, Coal India up by 1.42% and HDFC up by 1.39%.

On the flip side, Maruti Suzuki down by 3.07%, Bharti Airtel down by 2.58%, Jindal Steel down by 1.71%, RCom down by 1.58% and Sesa Goa down by 1.51%, were the major losers on the index.

Asian equity indices were trading mixed; Jakarta Composite was up 3.50 points or 0.10% to 3,429.18, Straits Times was up 16.34 points or 0.62% to 2,656.64 and Seoul Composite was up by 7.47 points or 0.42% to 1,767.24.

On the flip side, Shanghai Composite was down 5.54 points or 0.23% to 2,353.68, Hang Seng was down 88.56 points or 0.50% to 17,618.45 and KLSE Composite was down by 5.14 points or 0.37% to 1,394.91.