Benchmarks trade flat in early deals

Indian equity indices have made a flat start in the absence of any major global or domestic cues. Some cautiousness crept in on persisting threat of Standard & Poor’s downgrade. However, Finance Minister P Chidambaram has said that India deserves a rating upgrade in view of improvement in macro-economic situation. Meanwhile, oil and gas companies reacted positively to the Oil Ministry’s Cabinet note to raise the price of natural gas produced by state-owned as well as private firms to $6.7, less than $8-8.5 hike previously expected.

Global cues too remained choppy as US markets ended on a lower note and all the major indices made a close marginally in red ahead of the crucial testimony of Federal Reserve Chairman Ben Bernanke before the Joint Economic Committee of Congress, while most of the Asian equity indices were trading in red at this point of time with Japanese market trading lower despite the yen dropping against other major currencies ahead of the Bank of Japan’s two days policy meeting, which will conclude on May 22, 2013.

Back home, on the sectoral front, software witnessed the maximum gain in trade followed by technology and oil and gas while, realty, auto and power remained the top losers on the BSE sectoral space. The broader indices, however, were mixed, while the market breadth on the BSE was positive; there were 647 shares on the gaining side against 619 shares on the losing side while 73 shares remain unchanged.

The BSE Sensex opened at 20,227.17; about 3 points higher compared to its previous closing of 20,223.98, and has touched a high and a low of 20,288.76 and 20,195.74 respectively.

The index is currently trading at 20,199.64, down by 24.34 points or 0.12%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a strong start with 48.32% stocks advancing against 46.23% declines. The broader indices were trading mixed; the BSE Mid cap indices up by 0.16% and Small cap indices down 0.03%. 

The top gaining sectoral indices on the BSE were, IT up by 0.86%, Teck up by 0.75%, Oil & Gas up by 0.36%, Consumer Durables up by 0.16% and PSU up by 0.15% while, Realty down by 0.92%, Auto down by 0.89%, Power down by 0.56%, Bankex down by 0.53% and Capital Goods down by 0.44% were the only losers on the sectoral index.

The top gainers on the Sensex were Coal India up by 2.16%, BHEL up by 1.44%, TCS up by 1.41%, Wipro up by 1.15% and HDFC up by 0.96%.

On the flip side, Tata Motors was down by 1.46%, Maruti Suzuki was down by 1.14%, NTPC was down by 1.10%, Mahindra & Mahindra was down by 1.05% and Dr Reddys Lab was down by 1.00% were the top losers on the Sensex.

Meanwhile, in order to garner more revenue from indirect tax, the finance ministry has implemented one-time amnesty scheme, Voluntary Compliance Encouragement Scheme (VCES), for service tax defaulters to pay their due without any penalty or late payment charges. As per the scheme, a defaulter may declare his due tax liabilities, including the cess charges, for a period between October 1, 2007 and December 31, 2012 and pay it to the government after making a truthful declaration and can avoid penalty, interest or any other penal proceedings.

The VCES scheme came into force after passage of Finance Bill on May 10 and can be availed by a service tax defaulter by this year end. The scheme was introduced by Finance Minister while presenting budget for 2013-14. The Finance Ministry has also decided to reject any enquiry or investigation against an evader, if he comes forward to make truthful declaration under this. A person may make a declaration to the designated authority on or before the December 31, 2013 and have to pay not less than 50 percent of the tax dues on or before December 31, this year and the rest by June 30, 2014.

According to the government estimates, service tax evaders have deprived the exchequer of over Rs 9,872 crore during April-December, 2012. However, it has detected 4,133 cases of service tax in the same period and has realized over Rs 1,969 crore from the defaulters. Further the financial bill noted that if any person who has furnished return and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, will not be eligible to make declaration for the period covered by the said return.

The CNX Nifty opened at 6,152.35; about 4 points lower as compared to its previous closing of 6,156.90, and has touched a high and a low of 6,173.10 and 6,146.25 respectively.

The index is currently trading at 6,151.85, down by 5.05 points or 0.08%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Coal India up by 2.04%, HCL Tech up by 1.77%, TCS up by 1.60%, Lupin up by 1.48% and BHEL up by 1.14%.

On the flip side, Ranbaxy Laboratories down by 2.22%, Reliance Infrastructure down by 2.11%, NTPC down by 2.10%, UltraTech Cement down by 2.06% and JP Associate down by 2.05%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite slipped 3.38 points or 0.15% to 2,296.60, Hang Seng declined 117.49 points or 0.50% to 23,375.54, Jakarta Composite dropped 23.56 points or 0.45% to 5,191.41, Nikkei 225 dipped 19.57 points or 0.13% to 15,341.24, Straits Times contracted 15.11 points or 0.44% to 3,439.12, KOSPI Composite decreased 3.91 points or 0.20% to 1,978.52 and Taiwan Weighted was down by 8.68 points or 0.10% to 8,368.37.

On the flip side, KLSE Composite was up by 8.41 points or 0.47% to 1,785.56.