Sensex, Nifty witness further fall in early noon deals

Indian equity benchmarks witnessed further fall in early afternoon deals, with both Sensex and Nifty trading near their intraday low points, impacted by weak cues from other Asian markets along with selling at Banking and Auto stocks. Traders got cautious, after Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal said that though the Union Budget proposed to review the customs levies over the next six months for inverted duty correction, it will be a difficult task in many cases because of nil rate on some items under free trade agreements (FTAs). The street paid no heed towards a report stating that private sector activity rose to a three-month high of 61.4 in July compared with 60.9 in the previous month. The HSBC Flash India Composite Output Index remained above the 50-mark, which separates expansion from contraction for 36th consecutive month.

On the global front, Asian markets were trading lower, as the manufacturing sector in Japan slipped into contraction territory in July, with a manufacturing PMI score of 49.2. That's down from 50.0, and it falls beneath that mark that separates expansion from contraction. The survey also showed that the services PMI improved to 53.9 from 49.4 in June, and the composite index likewise improved to 52.6 from 49.7 a month earlier.

The BSE Sensex is currently trading at 79842.45, down by 586.59 points or 0.73% after trading in a range of 79750.51 and 80519.58. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.34%, while Small cap index was up by 1.39%.

The top gaining sectoral indices on the BSE were Energy up by 1.42%, Oil & Gas up by 1.38%, Utilities up by 1.20%, Power up by 0.85% and Telecom up by 0.75%, while Bankex down by 1.73%, Auto down by 0.45%, FMCG down by 0.30% and TECK down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.30%, Tech Mahindra up by 1.88%, NTPC up by 1.52%, Power Grid up by 1.08% and Sun Pharma up by 0.81%. On the flip side, Bajaj Finance down by 2.18%, Axis Bank down by 2.08%, Bajaj Finserv down by 2.02%, Mahindra & Mahindra down by 1.70% and Nestle down by 1.52% were the top losers.

Meanwhile, the Income Tax (IT) department has said that 'substantial tax savings' are expected for a vast majority of taxpayers due to reduction in the long term capital gains tax (LTCG) rate in the real estate sector. The Budget has reduced tax rates on capital gains earned from sale of house properties held for long term, but has removed the indexation benefit available to taxpayers. 

The I-T department noted that the LTCG has been reduced from 20 per cent with indexation benefit to 12.5 per cent without indexation for the real estate sector. The indexation benefit allowed taxpayers to compute gains arising out of sale of capital assets after adjusting inflation. It said the indexation for inflation is in the region of 4-5 per cent, depending on the period of holding. Therefore, substantial tax savings are expected to a vast majority of such taxpayers. 

Giving a comparison of benefits based on the holding period of the real estate property, it said the new tax rate without indexation is beneficial in most cases. For property held for five years, the new regime is beneficial when property has appreciated 1.7 times or more, while for a property held for 10 years, it is beneficial when the value has increased 2.4 times or more. For a property purchased in 2009-10, if value has increased to 4.9 times or more, it is beneficial.

The CNX Nifty is currently trading at 24338.65, down by 140.40 points or 0.57% after trading in a range of 24307.25 and 24504.25. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 3.13%, ONGC up by 2.48%, Coal India up by 2.18%, Tata Motors up by 2.10% and BPCL up by 2.01%. On the flip side, Axis Bank down by 2.56%, Tata Consumer Products down by 2.24%, Bajaj Finance down by 2.23%, Bajaj Finserv down by 2.15% and Mahindra & Mahindra down by 1.82% were the top losers.

Asian markets were trading lower; Hang Seng declined 196.78 points or 1.13% to 17,272.58, Jakarta Composite plunged 28.94 points or 0.4% to 7,284.92, Shanghai Composite weakened 9.97 points or 0.34% to 2,905.40, Straits Times fell 4.75 points or 0.14% to 3,456.41, KOSPI dropped 15.58 points or 0.56% to 2,758.71 and Nikkei 225 slipped 439.54 points or 1.12% to 39,154.85.