Benchmarks manage to keep their heads above water in morning deals

Indian equity benchmarks managed to keep their heads above water in morning deals, led by gains in IT, Realty and Banking stocks amid positive global cues. Traders took some support with the latest data published by the Reserve Bank of India showing that India’s forex reserves surged by $4.54 billion to $648.7 billion as of May 17, marking an all-time high. However, gains remain capped as some concern came with report that India has recorded a trade deficit, the difference between imports and exports, with nine of its top 10 trading partners, including China, Russia, Singapore, and Korea, in 2023-24. The data also showed that the deficit with China, Russia, Korea, and Hong Kong increased in the last fiscal compared to 2022-23, while the trade gap with the UAE, Saudi Arabia, Russia, Indonesia, and Iraq narrowed. Traders also remained on sidelines ahead of the results of the Lok Sabha polls announcement. On the global front, Asian markets are trading mostly in green, as investors braced for a busy week of data which culminates in a key U.S. inflation report that could set the stage for a cut in interest rates there, albeit not for a few months yet.  

The BSE Sensex is currently trading at 75538.13, up by 127.74 points or 0.17% after trading in a range of 75404.82 and 75679.67. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.38%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were IT up by 0.66%, Realty up by 0.53%, Bankex up by 0.52%, TECK up by 0.49% and Healthcare up by 0.26%, while Oil & Gas down by 1.09%, Energy down by 1.00%, Power down by 0.70%, Utilities down by 0.55% and Auto down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.22%, TCS up by 1.20%, Indusind Bank up by 1.14%, Hindustan Unilever up by 1.05% and Tech Mahindra up by 0.89%. On the flip side, Wipro down by 1.51%, Maruti Suzuki down by 1.44%, NTPC down by 1.19%, Mahindra & Mahindra down by 0.77% and Power Grid Corporation down by 0.71% were the top losers.

Meanwhile, the income tax department has notified the Cost Inflation Index (CII) for the current fiscal beginning April 2024, for calculating long-term capital gains arising from sale of immovable property, securities and jewellery. The CII is used by taxpayers to compute gains arising out of sale of capital assets after adjusting inflation. The CII for financial year 2024-25, relevant to assessment year 2025-26, stood at 363, as per a notification of the Central Board of Direct Taxes (CBDT). The CII number for last fiscal was 348 and for 2022-23 financial year it was 331. 

The index for the following financial year, 2024-25, made an increase of 15 points, over the financial year 2023-24, which corresponds to an annual inflation rate of around 4.3 per cent. CII is notified under the Income-tax Act, 1961 every year. It is popularly used to calculate ‘indexed cost of acquisition’, while calculating capital gains at the time of sale of any capital asset. 

Normally, an asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares, 12 months for listed securities) to qualify as ‘long-term capital gains’. Since prices of goods increase over time resulting in a fall in the purchasing power, the CII is used to arrive at the inflation adjusted purchasing price of assets so as to compute taxable long-term capital gains (LTCG).

The CNX Nifty is currently trading at 22984.40, up by 27.30 points or 0.12% after trading in a range of 22932.00 and 23043.20. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 3.20%, Adani Ports &SEZ up by 1.39%, TCS up by 1.26%, HDFC Bank up by 1.17% and Hindalco up by 1.15%. On the flip side, Adani Enterprises down by 2.85%, ONGC down by 2.22%, Eicher Motors down by 1.79%, Coal India down by 1.73% and Wipro down by 1.59% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 56.85 points or 0.3% to 18,665.79, Shanghai Composite strengthened 11.35 points or 0.37% to 3,100.22, Straits Times rose 4.35 points or 0.13% to 3,320.91, KOSPI increased 15.02 points or 0.56% to 2,702.62, Nikkei 225 surged 136.28 points or 0.35% to 38,782.39 and Taiwan Weighted added 214.39 points or 0.99% to 21,779.73.

On the flip side, Jakarta Composite was down by 8.74 points or 0.12% to 7,213.64.